##### Table of Contents



As filed with the Securities and Exchange Commission on
June 28, 2006








UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





Form 20-F


|   |   |  |  |                                                                                                   
|-- | - |  |  | --------------------------------------------------------------------------------------------------
|   | o |  |  | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g)
    OF THE SECURITIES EXCHANGE ACT OF 1934
|OR
|   | þ |  |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934          
|   |   |  |  | For the Fiscal Year Ended: December 31, 2005                                                      
|OR
|   | o |  |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934      
|OR
|   | o |  |  | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
    THE SECURITIES EXCHANGE ACT OF 1934   
|   |   |  |  | Date of event requiring this shell company report                                                 
|   |   |  |  | For the transition period
    from           to                                                   



ENEL-Società per Azioni


(Exact name of registrant as specified in its charter)


ENEL S.p.A.


(Translation of registrants name into English)


Italy


(Jurisdiction of incorporation or organization)


Viale Regina Margherita 137, Rome, Italy


(Address of principal executive offices)





Securities registered or to be registered pursuant to
Section 12(b) of the Act:


|                                                                                |  |                                                        
|------------------------------------------------------------------------------- |  | -------------------------------------------------------
|Title of Each Class                                                             |  | Name of Each Exchange on Which Registered              
|                                                                                |  |                                                        
|American Depositary Shares
     Ordinary shares with a par value of
    1 each |  | New York Stock Exchange
     New York Stock Exchange(*)




Securities registered or to be registered pursuant to
Section 12(g) of the Act:


None


(Title of Class)





Securities for which there is a reporting obligation pursuant
to Section 15(d) of the Act:


None


(Title of Class)







6,157,071,646 Ordinary Shares




þ o




o þ






þ o


12b-2


þ o o




o þ


12b-2


o þ















---



##### Table of Contents










TABLE OF CONTENTS


|                                                |  |                                                           |     |  |     | 
|----------------------------------------------- |  | --------------------------------------------------------- | --- |  | --- | 
|                                                |  |                                                           |     |  |     | 
|PRESENTATION OF FINANCIAL AND OTHER INFORMATION |  |                                                           | iii | 
|                                                |  |                                                           |     |  |     | 
|GLOSSARY                                        |  |                                                           | v   | 
|                                               
|PART I                                         
|ITEM 1.                                         |  | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT
    AND ADVISORS |     |  | 1   | 
|ITEM 2.                                         |  | OFFER STATISTICS AND EXPECTED TIMETABLE                   |     |  | 1   | 
|ITEM 3.                                         |  | KEY INFORMATION                                           |     |  | 1   | 
|                                                |  | The Enel Group                                            |     |  | 1   | 
|                                                |  | Selected Consolidated Financial Data                      |     |  | 3   | 
|                                                |  | Exchange Rates                                            |     |  | 6   | 
|                                                |  | Risk Factors                                              |     |  | 7   | 
|                                                |  | Forward-Looking Statements                                |     |  | 17  | 
|ITEM 4.                                         |  | INFORMATION ON THE COMPANY                                |     |  | 18  | 
|                                                |  | History and Development of the Company                    |     |  | 18  | 
|                                                |  | Business                                                  |     |  | 19  | 
|                                                |  | Overview                                                  |     |  | 19  | 
|                                                |  | Strategy                                                  |     |  | 23  | 
|                                                |  | The Enel Group                                            |     |  | 27  | 
|                                                |  | Italian
    Electricity Demand                            |     |  | 27  | 
|                                                |  | Generation
    and Energy Management                      |     |  | 28  | 
|                                                |  | Sales,
    Infrastructure and Networks                    |     |  | 39  | 
|                                                |  | Competition
    in the Electricity and Gas Markets        |     |  | 47  | 
|                                                |  | Seasonality
    of Electricity and Gas Consumption        |     |  | 49  | 
|                                                |  | Discontinued
    Operations                               |     |  | 49  | 
|                                                |  | Services and
    Other Activities                         |     |  | 50  | 
|                                                |  | Capital
    Investment Program                            |     |  | 52  | 
|                                                |  | Regulatory Matters                                        |     |  | 55  | 
|                                                |  | Overview of Regulation in the
    Energy Sector in Italy  |     |  | 55  | 
|                                                |  | Electricity Regulation                                    |     |  | 55  | 
|                                                |  | Gas Regulation                                            |     |  | 69  | 
|                                                |  | Environmental Matters                                     |     |  | 71  | 
|                                                |  | Property, Plants and Equipment                            |     |  | 78  | 
|ITEM 4A.                                        |  | UNRESOLVED STAFF COMMENTS                                 |     |  | 78  | 
|ITEM 5.                                         |  | OPERATING AND FINANCIAL REVIEW AND
    PROSPECTS          |     |  | 78  | 
|                                                |  | Summary of Results                                        |     |  | 78  | 
|                                                |  | The Electricity Market Regulatory
    Framework           |     |  | 79  | 
|                                                |  | Outlook                                                   |     |  | 85  | 
|                                                |  | Analysis of Operating Results                             |     |  | 87  | 
|                                                |  | 2005 compared with 2004                                   |     |  | 88  | 
|                                                |  | Inflation                                                 |     |  | 98  | 
|                                                |  | U.S. GAAP Reconciliation                                  |     |  | 98  | 
|                                                |  | Liquidity and Capital Resources                           |     |  | 102 | 
|                                                |  | Off-Balance Sheet Arrangements                            |     |  | 106 | 
|                                                |  | Contractual Obligations and Commitments                   |     |  | 107 | 
|                                                |  | Trend Information                                         |     |  | 108 | 
|ITEM 6.                                         |  | DIRECTORS, SENIOR MANAGEMENT AND
    EMPLOYEES            |     |  | 108 | 
|                                                |  | Directors                                                 |     |  | 108 | 

i



---



##### Table of Contents



TABLE OF CONTENTS  (Continued)


|             |  |                                                                                                                                     |  |  |     | 
|------------ |  | ----------------------------------------------------------------------------------------------------------------------------------- |  |  | --- | 
|             |  | Senior Management                                                                                                                   |  |  | 112 | 
|             |  | Board of Statutory Auditors                                                                                                         |  |  | 114 | 
|             |  | Executive Compensation                                                                                                              |  |  | 115 | 
|             |  | Share Ownership                                                                                                                     |  |  | 118 | 
|             |  | Employees                                                                                                                           |  |  | 119 | 
|ITEM 7.      |  | MAJOR SHAREHOLDERS AND RELATED PARTY
    TRANSACTIONS                                                                               |  |  | 120 | 
|             |  | Major Shareholders                                                                                                                  |  |  | 120 | 
|             |  | Related Party Transactions                                                                                                          |  |  | 122 | 
|ITEM 8.      |  | FINANCIAL INFORMATION                                                                                                               |  |  | 123 | 
|             |  | Consolidated Financial Statements                                                                                                   |  |  | 123 | 
|             |  | Other Financial Information                                                                                                         |  |  | 123 | 
|             |  | Legal Proceedings                                                                                                                   |  |  | 123 | 
|             |  | Dividend Policy                                                                                                                     |  |  | 128 | 
|             |  | Significant Changes                                                                                                                 |  |  | 129 | 
|ITEM 9.      |  | THE OFFER AND LISTING                                                                                                               |  |  | 130 | 
|             |  | Markets and Price Range of ADSs and
    Ordinary Shares                                                                             |  |  | 130 | 
|ITEM 10.     |  | ADDITIONAL INFORMATION                                                                                                              |  |  | 131 | 
|             |  | Stock Option Plans                                                                                                                  |  |  | 131 | 
|             |  | By-Laws                                                                                                                             |  |  | 134 | 
|             |  | Significant Differences in Corporate
    Governance Practices for Purposes of Section 303A.11 of the
    NYSE Listed Company Manual |  |  | 148 | 
|             |  | Material Contracts                                                                                                                  |  |  | 153 | 
|             |  | Exchange Controls                                                                                                                   |  |  | 153 | 
|             |  | Taxation                                                                                                                            |  |  | 154 | 
|             |  | Documents On Display                                                                                                                |  |  | 158 | 
|ITEM 11.     |  | QUANTITATIVE AND QUALITATIVE DISCLOSURE
    ABOUT MARKET RISK                                                                       |  |  | 158 | 
|             |  | Price Risk Management and Market Risk
    Information                                                                               |  |  | 158 | 
|ITEM 12.     |  | DESCRIPTION OF SECURITIES OTHER THAN EQUITY
    SECURITIES                                                                          |  |  | 163 | 
|            
|PART II     
|ITEM 13.     |  | DEFAULTS, DIVIDENDS AVERAGES AND
    DELINQUENCIES                                                                                  |  |  | 163 | 
|ITEM 14.     |  | MATERIAL MODIFICATIONS TO THE RIGHTS OF
    SECURITY HOLDERS AND PROCEEDS                                                           |  |  | 163 | 
|ITEM 15.     |  | CONTROLS AND PROCEDURES                                                                                                             |  |  | 163 | 
|ITEM 16.     |  | [RESERVED]                                                                                                                          |  |  | 163 | 
|ITEM 16A.    |  | AUDIT COMMITTEE FINANCIAL EXPERT                                                                                                    |  |  | 163 | 
|ITEM 16B.    |  | CODE OF ETHICS                                                                                                                      |  |  | 164 | 
|ITEM 16C.    |  | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                                                                              |  |  | 164 | 
|ITEM 16D.    |  | EXEMPTIONS FROM THE LISTING STANDARDS FOR
    AUDIT COMMITTEES                                                                      |  |  | 165 | 
|ITEM 16E.    |  | PURCHASES OF EQUITY SECURITIES BY THE
    ISSUER AND AFFILIATED PURCHASERS                                                          |  |  | 165 | 
|            
|PART III    
|ITEM 17.     |  | FINANCIAL STATEMENTS                                                                                                                |  |  | 165 | 
|ITEM 18.     |  | FINANCIAL STATEMENTS                                                                                                                |  |  | 166 | 
|ITEM 19.     |  | EXHIBITS                                                                                                                            |  |  | 167 | 
|Exhibit 1.1 
|Exhibit 8.1 
|Exhibit 12.1
|Exhibit 12.2
|Exhibit 12.3
|Exhibit 13.1



ii



---



##### Table of Contents






PRESENTATION OF FINANCIAL AND OTHER INFORMATION




20-F








| |   |                                                                                                                                                                                                                  
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | References to dollars, $ and
    U.S. dollars are to United States dollars;                                                                                                                                
|
| |  | References to  or euro are to the euro, the single
    currency established for participants in the third stage of the
    European Economic and Monetary Union, or EMU, commencing
    January 1, 1999; and
|
| |  | References to lire, lira or
    Lit. are to Italian lire.                                                                                                                                                  




 


iii



---



##### Table of Contents





| |                                        
| | ---------------------------------------
| | Market share information and statistics

20-F




| |            
| | -----------
| | Adjustments



iv



---



##### Table of Contents






GLOSSARY








|                                       |  |                                                                                                                                                                                                                                                                                                                                                                                
|-------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Antitrust Authority                    |  | The Italian Antitrust Authority.                                                                                                                                                                                                                                                                                                                                               
|                                      
|Average thermal efficiency             |  | A measure of the efficiency of a thermal generating plant in
    converting sources of energy such as fuel oil into electricity.
    Average thermal efficiency is expressed as the amount of
    electricity actually produced in kWh as a percentage of the kWh
    equivalent of the energy source consumed.                                                                
|                                      
|Bersani Decree                         |  | Legislative Decree No. 79 of March 16, 1999, aimed at
    liberalizing the Italian electricity market.                                                                                                                                                                                                                                                                         
|                                      
|CIP 6                                  |  | Regulation 6/92 issued by Comitato Interministeriale
    Prezzi, an Italian governmental committee, which established
    incentives for new generation plants using renewable resources
    and for the sale of electricity produced from renewable
    resources.                                                                                                            
|                                      
|CO2                                    |  | Carbon dioxide.                                                                                                                                                                                                                                                                                                                                                                
|                                      
|Combined Cycle Gas Turbine (or CCGT) |  | A type of generating plant that produces electricity through
    both gas turbines and steam turbines. Conventional boilers or
    other generators recover and use the exhaust heat exiting from
    gas turbines.                                                                                                                                                            
|                                      
|Co-generation                          |  | The simultaneous generation of steam and electricity, typically
    where the need arises for industrial purposes.                                                                                                                                                                                                                                                             
|                                      
|Communications Authority               |  | The Italian Authority for the Guarantee of Communications.                                                                                                                                                                                                                                                                                                                     
|                                      
|Decommissioning                        |  | The phase of declassification, decontamination and dismantling
    of nuclear power installations and clean up of the plant site
    with the aim of achieving: (i) the complete demolition of
    the nuclear power plant; (ii) the removal of any limitation
    due to the presence of radioactive material; and (iii) the
    restoration of the site for other activities.
|                                      
|Eligible Customer                      |  | Electricity customers in Italy who meet consumption thresholds
    that permit them to participate in the free market for
    electricity.                                                                                                                                                                                                                                     
|                                      
|Emission trading rights                |  | Tradable emission permits that give the right to produce the
    equivalent of one ton of carbon dioxide. These permits can
    either be assigned through a national allowance plan or earned
    through investments in projects in developing countries
    (Certified Emission Reductions) or in transition economies
    countries (Emission Reduction Units).            
|                                      
|Energy Authority                       |  | The Italian Authority for Electric Energy and Gas.                                                                                                                                                                                                                                                                                                                             
|                                      
|Environment Ministry                   |  | The Italian Ministry of the Environment.                                                                                                                                                                                                                                                                                                                                       
|                                      
|Gencos                                 |  | The three generating companies we disposed of in order to comply
    with the Bersani Decree, Elettrogen S.p.A. (now Endesa Italia                                                                                                                                                                                                                                             

v



---



##### Table of Contents



|                                                      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|----------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                      |  | S.p.A.), Eurogen S.p.A. (now Edipower S.p.A.) and Interpower
    S.p.A. (now Tirreno Power S.p.A.).                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                     
|Generating unit                                       |  | An electric generator together with the turbine or other device
    which drives it.                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                     
|Gigawatt (GW)                                         |  | 1,000,000,000 watts (1,000 megawatts).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                     
|Gigawatt hour (GWh)                                   |  | One gigawatt of power supplied or demanded for one hour.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                     
|GHG                                                   |  | Greenhouse gases, which are gases that contribute to
    the greenhouse effect, such as carbon dioxide, methane, nitrous
    oxide, chlorofluorocarbons and ozone.                                                                                                                                                                                                                                                                                                                                                                              
|                                                     
|Gross installed capacity                              |  | The maximum power that can be produced continuously throughout a
    prolonged period of operation with all equipment assumed to be
    fully operational.                                                                                                                                                                                                                                                                                                                                                                                        
|                                                     
|GRTN                                                  |  | Gestore del Sistema Elettrico  GRTN S.p.A. (formerly
    Gestore della Rete di Trasmissione Nazionale), a company owned
    by the MEF that until October 2005 mainly managed Italys
    national electricity transmission grid. These activities were
    transferred to Terna in November 2005. Since that time, the GRTN
    has focused on managing and promoting renewable resources (an
    activity it carried out also prior to November 2005). GRTN also
    owns the Single Buyer and the Market Operator (both as defined
    below).
|                                                     
|Independent power producers                           |  | Industrial companies that produce electricity for their own use
    and for sale to third parties.                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                     
|Italian power exchange (Borsa dellEnergia Elettrica) |  | A virtual marketplace in which producers, importers,
    wholesalers, the GRTN and Terna, other Eligible Customers and
    the Single Buyer buy and sell electricity at prices determined
    through a competitive bidding process.                                                                                                                                                                                                                                                                                                              
|                                                     
|Kilovolt (kV)                                         |  | 1,000 volts.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                     
|Kilovolt ampere (kVA)                                 |  | 1,000 volts ampere.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                     
|Kilowatt (kW)                                         |  | 1,000 watts.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                     
|Kilowatt hour (kWh)                                   |  | One kilowatt of power supplied or demanded for one hour.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                     
|Market Operator                                       |  | The entity, wholly owned by the GRTN, that manages the Italian
    power exchange.                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                     
|Marzano Law                                           |  | Law No. 239 of August 23, 2004, aimed at reorganizing
    existing energy market regulation and further liberalizing the
    energy market.                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                     
|MEF                                                   |  | The Italian Ministry of the Economy and Finance and its
    predecessor, the Ministry of the Treasury, Budget and Economic
    Planning.                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                     
|Megawatt (MW)                                         |  | 1,000,000 watts (1,000 kilowatts).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                     
|Megawatt hour (MWh)                                   |  | One megawatt of power supplied or demanded for one hour.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                     
|Megavolt ampere (MVA)                                 |  | 1,000,000 volts ampere.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                     
|Ministry of Productive Activities                     |  | The Italian Ministry of Productive Activities and its
    predecessor, the Ministry of Industry, Commerce and
    Handcrafts.                                                                                                                                                                                                                                                                                                                                                                                                                     

vi



---



##### Table of Contents





|                                |  |                                                                                                                                                                                                                                                                                                                                                                           
|------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Net Installed Capacity          |  | The maximum power that can be produced continuously throughout a
    prolonged period of operation with all equipment assumed to be
    fully operational, as measured at the point of entry to the
    transmission network (or minus the power absorbed by plant use
    and the power lost in the transformers required to raise the
    voltage to the network level).
|                               
|Non-Eligible Customers          |  | Electricity customers in Italy who do not meet consumption
    thresholds entitling them to participate in the free market.                                                                                                                                                                                                                                               
|                               
|NH3                             |  | Ammonia.                                                                                                                                                                                                                                                                                                                                                                  
|                               
|NOx                             |  | Nitrogen oxides.                                                                                                                                                                                                                                                                                                                                                          
|                               
|Orimulsion                      |  | Abbreviation of Orinoco emulsion, which is a fossil
    fuel from the Orinoco river basin in Venezuela consisting of
    very fine bitumen dispersed in water. Orimulsion emits the same
    amount of
    CO2
    as fuel oil of equivalent energy value.                                                                                                              
|                               
|Resellers                       |  | Other distribution companies to whom we transport electricity
    because their networks are attached to our network rather than
    directly to the national transmission grid.                                                                                                                                                                                          
|                               
|Single Buyer (Acquirente Unico) |  | A company wholly owned by the GRTN, responsible for ensuring the
    supply of electricity to regulated customers who do not yet have
    access to the liberalized electricity market.                                                                                                                                                                                   
|                               
|SO2                             |  | Sulfur dioxide.                                                                                                                                                                                                                                                                                                                                                           
|                               
|Substation                      |  | Equipment which switches and/or changes or regulates the voltage
    of electricity in a transmission and/or distribution network.                                                                                                                                                                                                                                        
|                               
|Terawatt (TW)                   |  | 1,000,000,000,000 watts (1,000 gigawatts).                                                                                                                                                                                                                                                                                                                                
|                               
|Terawatthour (TWh)              |  | One terawatt of power supplied or demanded for one hour.                                                                                                                                                                                                                                                                                                                  
|                               
|Thermal unit                    |  | A generating unit which uses combustible fuel as the source of
    energy to drive an electric generator.                                                                                                                                                                                                                                                                 
|                               
|Volt                            |  | The basic unit of electric force.                                                                                                                                                                                                                                                                                                                                         
|                               
|Voltampere                      |  | The basic unit of apparent electrical power.                                                                                                                                                                                                                                                                                                                              
|                               
|Watt                            |  | The basic unit of active electrical power.                                                                                                                                                                                                                                                                                                                                

vii



---



##### Table of Contents






PART I







|        |                                                      
|------- | -----------------------------------------------------
|ITEM 1. | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS








|        |                                        
|------- | ---------------------------------------
|ITEM 2. | OFFER STATISTICS AND EXPECTED TIMETABLE








|        |                
|------- | ---------------
|ITEM 3. | KEY INFORMATION




The Enel Group




| |                                          
| | -----------------------------------------
| | Energy Generation, Distribution and Sales

 








| |                 
| | ----------------
| | Other Operations



1



---



##### Table of Contents







| |                       
| | ----------------------
| | Internal organizations





| |          
| | ---------
| | Ownership





| |         
| | --------
| | Strategy



2



---



##### Table of Contents






Selected Consolidated Financial Data






|                                                                            |                                           |                    |        |             |                    |   |        |         |  |  |         |        | 
|--------------------------------------------------------------------------- | ----------------------------------------- | ------------------ | ------ | ----------- | ------------------ | - | ------ | ------- |  |  | ------- | ------ | 
|                                                                            |                                           | As of December 31, |       
|                                                                            |                                           |                    |       
|                                                                            |                                           | 2004               |        |             | 2005               |   |        | 2005(2) | 
|                                                                            |                                           |                    |        |             |                    |   |        |         | 
|                                                                            |                                           |                    |        | (Dollars in |                   
|                                                                            |                                           | (Euro in millions, |        |             | millions, except   |  
|                                                                            |                                           | except per share   |        |             | per share amounts) |  
|                                                                            |                                           | amounts)(1)        |        |             |                    |  
|CONSOLIDATED STATEMENT OF INCOME DATA                                       |                                           |                    |        |             |                    |   |        |         |  |  |         |       
|Amounts in accordance with IFRS:                                            |                                           |                    |        |             |                    |   |        |         |  |  |         |       
|Operating revenues                                                          |                                           |                   | 31,011 |             |                    |  | 34,059 |         |  |  | $40,333 |       
|Operating expenses:                                                         |                                           |                    |        |             |                    |   |        |         |  |  |         |       
|                                                                            | Depreciation, amortization and impairment |                    |        | 2,201       |                    |   |        | 2,207   |  |  |         | 2,614  | 
|                                                                            | Other                                     |                    |        | 22,940      |                    |   |        | 26,314  |  |  |         | 31,162 | 
|Total operating expenses                                                    |                                           |                    | 25,141 |             |                    |   | 28,521 |         |  |  | 33,776  |       
|Operating income                                                            |                                           |                    | 5,870  |             |                    |   | 5,538  |         |  |  | 6,557   |       
|Financial income (expense) and income (expense) from investments            |                                           |                    | (827   | )           |                    |   | (714   | )       |  |  | (846    | )     
|Income (expense) from investments accounted for using the equity
    method |                                           |                    | (25    | )           |                    |   | (30    | )       |  |  | (36     | )     
|Income before taxes                                                         |                                           |                    | 5,018  |             |                    |   | 4,794  |         |  |  | 5,675   |       
|Income taxes                                                                |                                           |                    | 2,116  |             |                    |   | 1,934  |         |  |  | 2,290   |       
|Income from continuing operations                                           |                                           |                    | 2,902  |             |                    |   | 2,860  |         |  |  | 3,385   |       
|Income from discontinued operations (net of tax)                            |                                           |                    | (155   | )           |                    |   | 1,272  |         |  |  | 1,506   |       
|Net income (before minority interest)                                       |                                           |                    | 2,747  |             |                    |   | 4,132  |         |  |  | 4,892   |       
|Earnings per share(2)                                                       |                                           |                    | 0.45   |             |                    |   | 0.67   |         |  |  | 0.79    |       
|Number of shares outstanding (in millions)                                  |                                           |                    | 6,104  |             |                    |   | 6,157  |         |  |  | 6,157   |       
|Amounts in accordance with U.S. GAAP(3)                                     |                                           |                    |        |             |                    |   |        |         |  |  |         |       
|Operating revenues                                                          |                                           |                    | 36,022 |             |                    |   | 39,635 |         |  |  | 46,936  |       
|Operating expenses                                                          |                                           |                    | 32,316 |             |                    |   | 31,627 |         |  |  | 37,453  |       
|Operating income(4)                                                         |                                           |                    | 3,706  |             |                    |   | 8,008  |         |  |  | 9,483   |       
|Income before taxes(4)                                                      |                                           |                    | 2,614  |             |                    |   | 7,031  |         |  |  | 8,326   |       
|Net income (before minority interest)                                       |                                           |                    | 1,129  |             |                    |   | 4,945  |         |  |  | 5,856   |       
|Earnings per share(2)                                                       |                                           |                    | 0.18   |             |                    |   | 0.80   |         |  |  | 0.95    |       

3



---



##### Table of Contents



|                                      |  |                               |         |     |      |  |         |      |  |  |         | 
|------------------------------------- |  | ----------------------------- | ------- | --- | ---- |  | ------- | ---- |  |  | ------- | 
|                                      |  | As of December 31,            |        
|                                      |  |                               |        
|                                      |  | 2001                          |         |     | 2002 |  |         | 2003 | 
|                                      |  |                               |         |     |      |  |         |      | 
|                                      |  | (Euro in millions, except per |        
|                                      |  | share amounts)                |        
|CONSOLIDATED STATEMENT OF INCOME DATA |  |                               |         |     |      |  |         |      |  |  |         | 
|Amounts in accordance with U.S. GAAP: |  |                               |         |     |      |  |         |      |  |  |         | 
|Operating revenues                    |  |                               | 28,781 |     |      |  | 30,604 |      |  |  | 31,237 | 
|Depreciation and amortization         |  |                               | 4,478   |     |      |  | 4,069   |      |  |  | 4,506   | 
|Operating income                      |  |                               | 5,337   | (5) |      |  | 2,617   | (6)  |  |  | 4,966   | 
|Income before taxes                   |  |                               | 3,965   |     |      |  | 1,373   |      |  |  | 3,798   | 
|Net income                            |  |                               | 3,688   |     |      |  | 1,399   |      |  |  | 2,376   | 
|Earnings per share(2)                 |  |                               | 0.61    |     |      |  | 0.23    |      |  |  | 0.39    | 

|                                         |  |                    |         |             |           |  |         |         |  |   |        | 
|---------------------------------------- |  | ------------------ | ------- | ----------- | --------- |  | ------- | ------- |  | - | ------ | 
|                                         |  | As of December 31, |        
|                                         |  |                    |        
|                                         |  | 2004               |         |             | 2005      |  |         | 2005(1) | 
|                                         |  |                    |         |             |           |  |         |         | 
|                                         |  |                    |         | (Dollars in |          
|                                         |  | (Euro in millions) |         |             | millions) | 
|                                         |  |                    |         |             |           | 
|CONSOLIDATED BALANCE SHEET DATA          |  |                    |         |             |           |  |         |         |  |   |        | 
|Amounts in accordance with IFRS:         |  |                    |         |             |           |  |         |         |  |   |        | 
|Fixed assets, net                        |  |                    | 36,702 |             |           |  | 30,188 |         |  | $ | 35,749 | 
|Current assets                           |  |                    | 13,532  |             |           |  | 12,746  |         |  |   | 15,094 | 
|Total assets                             |  |                    | 65,378  |             |           |  | 50,502  |         |  |   | 59,804 | 
|Current liabilities                      |  |                    | 18,607  |             |           |  | 13,446  |         |  |   | 15,923 | 
|Short-term debt(7)                       |  |                    | 6,589   |             |           |  | 2,296   |         |  |   | 2,719  | 
|Long-term debt(8)                        |  |                    | 20,291  |             |           |  | 10,967  |         |  |   | 12,987 | 
|Shareholders equity                     |  |                    | 17,953  |             |           |  | 19,057  |         |  |   | 22,567 | 
|Amounts in accordance with U.S. GAAP(3): |  |                    |         |             |           |  |         |         |  |   |        | 
|Fixed assets, net                        |  |                    | 37,589  |             |           |  | 30,320  |         |  |   | 35,905 | 
|Total assets                             |  |                    | 67,152  |             |           |  | 50,596  |         |  |   | 59,916 | 
|Short-term debt(7)                       |  |                    | 6,589   |             |           |  | 2,296   |         |  |   | 2,719  | 
|Long-term debt(8)                        |  |                    | 20,291  |             |           |  | 10,967  |         |  |   | 12,987 | 
|Shareholders equity                     |  |                    | 15,697  |             |           |  | 17,638  |         |  |   | 20,887 | 

|                                      |  |                    |         |  |      |  |         |      |  |  |         | 
|------------------------------------- |  | ------------------ | ------- |  | ---- |  | ------- | ---- |  |  | ------- | 
|                                      |  | As of December 31, |        
|                                      |  |                    |        
|                                      |  | 2001               |         |  | 2002 |  |         | 2003 | 
|                                      |  |                    |         |  |      |  |         |      | 
|                                      |  | (Euro in millions) |        
|CONSOLIDATED BALANCE SHEET DATA       |  |                    |         |  |      |  |         |      |  |  |         | 
|Amounts in accordance with U.S. GAAP: |  |                    |         |  |      |  |         |      |  |  |         | 
|Fixed assets, net                     |  |                    | 36,035 |  |      |  | 38,304 |      |  |  | 37,407 | 
|Total assets                          |  |                    | 63,799  |  |      |  | 66,423  |      |  |  | 68,505  | 
|Short-term debt(7)                    |  |                    | 7,107   |  |      |  | 8,371   |      |  |  | 8,643   | 
|Long-term debt(8)                     |  |                    | 16,072  |  |      |  | 17,172  |      |  |  | 18,005  | 
|Shareholders equity                  |  |                    | 19,467  |  |      |  | 18,526  |      |  |  | 18,651  | 






4



---



##### Table of Contents



|                                                    |  |                    |        |             |           |   |        |         |  |   |        |  
|--------------------------------------------------- |  | ------------------ | ------ | ----------- | --------- | - | ------ | ------- |  | - | ------ | -
|                                                    |  | As of December 31, |       
|                                                    |  |                    |       
|                                                    |  | 2004               |        |             | 2005      |   |        | 2005(1) | 
|                                                    |  |                    |        |             |           |   |        |         | 
|                                                    |  |                    |        | (Dollars in |          
|                                                    |  | (Euro in           |        |             | millions) |  
|                                                    |  | millions)(1)       |        |             |          
|CONSOLIDATED CASH FLOW DATA                         |  |                    |        |             |           |   |        |         |  |   |        |  
|Amounts in accordance with IFRS:                    |  |                    |        |             |           |   |        |         |  |   |        |  
|Net cash provided by operating activities           |  |                   | 4,835  |             |           |  | 5,693  |         |  | $ | 6,742  |  
|Net cash (used in) provided by investing activities |  |                    | (1,953 | )           |           |   | 1,092  |         |  |   | 1,293  |  
|Net cash (used in) provided by financing activities |  |                    | (2,966 | )           |           |   | (6,654 | )       |  |   | (7,880 | )
|Amounts in accordance with U.S. GAAP(3):            |  |                    |        |             |           |   |        |         |  |   |        |  
|Net cash provided by operating activities           |  |                    | 5,730  |             |           |   | 4,864  |         |  |   | 5,760  |  
|Net cash used in investing activities               |  |                    | 1,055  |             |           |   | (1,982 | )       |  |   | (2,347 | )
|Net cash (used in) provided by financing activities |  |                    | (6,654 | )           |           |   | (2,966 | )       |  |   | (3,512 | )

|                                                    |  |                    |        |   |      |   |        |      |  |   |        |  
|--------------------------------------------------- |  | ------------------ | ------ | - | ---- | - | ------ | ---- |  | - | ------ | -
|                                                    |  | As of December 31, |       
|                                                    |  |                    |       
|                                                    |  | 2001               |        |   | 2002 |   |        | 2003 | 
|                                                    |  |                    |        |   |      |   |        |      | 
|                                                    |  | (Euro in millions) |       
|CONSOLIDATED CASH FLOW DATA                         |  |                    |        |   |      |   |        |      |  |   |        |  
|Amounts in accordance with U.S. GAAP:               |  |                    |        |   |      |   |        |      |  |   |        |  
|Net cash provided by operating activities           |  |                   | 5,554  |   |      |  | 3,815  |      |  |  | 6,843  |  
|Net cash used in investing activities               |  |                    | (8,707 | ) |      |   | (4,241 | )    |  |   | (4,730 | )
|Net cash (used in) provided by financing activities |  |                    | 3,249  |   |      |   | 239    |      |  |   | (2,061 | )

|                                                         |  |                    |        |      |      |  |        |      |  |  |        |         |  |      |        |  |  |  |        | 
|-------------------------------------------------------- |  | ------------------ | ------ | ---- | ---- |  | ------ | ---- |  |  | ------ | ------- |  | ---- | ------ |  |  |  | ------ | 
|                                                         |  | As of December 31, |       
|                                                         |  |                    |       
|                                                         |  | 2001               |        |      | 2002 |  |        | 2003 |  |  | 2004   |         |  | 2005 |       
|                                                         |  |                    |        |      |      |  |        |      |  |  |        |         |  |      |       
|Operating Data (Unaudited)                               |  |                    |        |      |      |  |        |      |  |  |        |         |  |      |        |  |  |  |        | 
|Net installed capacity (GW) in Italy                     |  |                    | 50.0   |      |      |  | 43.8   | (9)  |  |  | 41.8   |         |  |      | 42.0   |  |  |  | 42.2   | 
|Net electricity production in Italy (TWh)                |  |                    | 169.1  | (10) |      |  | 145.1  | (11  |  |  |        | ) 137.8 |  |      | 125.9  |  |  |  | 112.1  | 
|Electricity sales to end users in Italy (TWh)(12)        |  |                    | 194.9  |      |      |  | 181.3  |      |  |  | 152.2  |         |  |      | 157.8  |  |  |  | 148.2  | 
|Total electricity distributed in Italy (TWh)(13)         |  |                    | 256.3  |      |      |  | 258.0  |      |  |  | 265.0  |         |  |      | 261.2  |  |  |  | 259.3  | 
|Natural gas sold to end users (billions of cubic meters) |  |                    | 1.1    |      |      |  | 4.0    |      |  |  | 4.4    |         |  |      | 5.2    |  |  |  | 5.2    | 
|Natural gas sales customers at year end (millions)       |  |                    | 0.6    |      |      |  | 1.7    |      |  |  | 1.8    |         |  |      | 2.0    |  |  |  | 2.1    | 
|Employees                                                |  |                    | 72,661 |      |      |  | 71,204 |      |  |  | 64,770 |         |  |      | 61,898 |  |  |  | 51,778 | 






| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | We have translated euro amounts into dollar amounts at the noon
    buying rate for euro on December 31, 2005, of
    1.00 = $1.1842.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
| | (2) | We calculate earnings per share by dividing our consolidated net
    income by the number of Enels ordinary shares outstanding
    during each period. Prior to Enels initial public offering
    in November 1999, all of Enels ordinary shares were owned
    by the MEF. At December 31, 2005, the MEF owned 21.4% and
    its subsidiary Cassa Depositi e Prestiti owned 10.2% of
    Enels ordinary shares. You should consider that
    Enels share capital was Lit. 12,126,150,379,000
    (corresponding to
    6,262,634,023)
    divided into 12,126,150,379 shares with a par value of each
    share of Lit. 1,000 (corresponding to
    0.52) until
    July 9, 2001, the date on which both the re-denomination of
    Enels share capital in euros and a one-for-two reverse
    stock split became effective. As a result of the re-denomination
    and the reverse stock split, Enels share capital amounted
    to
    6,063,075,189,
    divided into 6,063,075,189 shares, each with a par value of
    1. As of
    December 31, 2005 Enels share capital amounts to
    6,157,071,646
    divided into 6,157,071,646 shares with a par value of
    1.
|
| | (3) | For information concerning differences between IFRS and
    U.S. GAAP that are relevant to our consolidated financial
    statements, you should read note 21 to our consolidated
    financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|
| | (4) | You should read note 21 to our consolidated financial
    statements for a discussion of the impacts generated by the
    differences between IFRS and U.S. GAAP in calculating
    operating income.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

5



---



##### Table of Contents





| |     |                                                                                                        
| | --- | -------------------------------------------------------------------------------------------------------
| | (5) | Includes gain on sale of Elettrogen, previously classified as
    other non-operating income (expense).
|
| | (6) | Includes gain on sale of Eurogen, previously classified as other
    non-operating income (expense).   
|
| | (7) | Includes current portion of long-term debt.                                                            
|
| | (8) | Excludes current portion of long-term debt.                                                            
|
| | (9) | Including 2.6 GW of capacity of Interpower, which was divested
    in January 2003.                    



|     |                                                                                                                                                                        
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(10) | Including 12.2 TWh generated by Elettrogen and Valgen before
    they were divested during 2001, and 20.9 TWh generated by
    Eurogen, which was divested in May 2002.
|    
|(11) | Including 8.0 TWh generated by Eurogen before it was divested,
    and 5.7 TWh generated by Interpower.                                                                
|    
|(12) | Excluding sales to resellers.                                                                                                                                          
|    
|(13) | Including electricity distributed to resellers.                                                                                                                        




Exchange Rates






|                  |  |                          |        |  |         |  |         |      |  |  |        |  |  |  |        | 
|----------------- |  | ------------------------ | ------ |  | ------- |  | ------- | ---- |  |  | ------ |  |  |  | ------ | 
|                  |  | End of                   |        |  |         |  |         |      | 
|                  |  | Period                   |        |  | Average |  |         | High |  |  | Low    | 
|                  |  |                          |        |  |         |  |         |      |  |  |        | 
|                  |  | U.S. dollars per euro(1) |       
|Year:             |  |                          |        |  |         |  |         |      |  |  |        |  |  |  |        | 
|2001              |  |                          | 0.8901 |  |         |  | 0.8909  |      |  |  | 0.9535 |  |  |  | 0.8370 | 
|2002              |  |                          | 1.0485 |  |         |  | 0.9495  |      |  |  | 1.0485 |  |  |  | 0.8594 | 
|2003              |  |                          | 1.2597 |  |         |  | 1.1411  |      |  |  | 1.2597 |  |  |  | 1.0361 | 
|2004              |  |                          | 1.3538 |  |         |  | 1.2478  |      |  |  | 1.3625 |  |  |  | 1.1801 | 
|2005              |  |                          | 1.1842 |  |         |  | 1.24001 |      |  |  | 1.3476 |  |  |  | 1.6667 | 
|Month ended:      |  |                          |        |  |         |  |         |      |  |  |        |  |  |  |        | 
|December 31, 2005 |  |                          | 1.1842 |  |         |  | 1.18609 |      |  |  | 1.2041 |  |  |  | 1.1699 | 
|January 31, 2006  |  |                          | 1.2158 |  |         |  | 1.21255 |      |  |  | 1.2287 |  |  |  | 1.1980 | 
|February 28, 2006 |  |                          | 1.1925 |  |         |  | 1.19397 |      |  |  | 1.2100 |  |  |  | 1.1860 | 
|March 31, 2006    |  |                          | 1.2139 |  |         |  | 1.20284 |      |  |  | 1.2197 |  |  |  | 1.1886 | 
|April 30, 2006    |  |                          | 1.2624 |  |         |  | 1.29192 |      |  |  | 1.2624 |  |  |  | 1.2091 | 
|May 31, 2006      |  |                          | 1.2833 |  |         |  | 1.27674 |      |  |  | 1.2888 |  |  |  | 1.2606 | 






|    |                                                                          
|--- | -------------------------------------------------------------------------
|(1) | Based on the Noon Buying Rate for the euro for the periods
    indicated.

Mercato
Telematico Azionario


6



---



##### Table of Contents






Risk Factors


You should carefully consider the risks described below and
all of the other information in this document. If any of the
risks described below actually occurs, our business, economic
and financial results and the trading price of Enels
ordinary shares or ADSs could be materially adversely
affected.


Risks Relating to our Energy Business




| |                                                                                                               
| | --------------------------------------------------------------------------------------------------------------
| | Future regulation could have a significant adverse effect
    on our energy businesses and their profitability





| |                                                                                                                             
| | ----------------------------------------------------------------------------------------------------------------------------
| | Regulatory changes promoting market liberalization have
    significantly increased competition in our energy
    businesses







| |   |                                                                                                                                                                                                              
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | An increase in bilateral contracts between our competitors and
    final customers;                                                                                                                          
|
| |  | The construction of new generation facilities by our competitors
    and the development of new interconnection lines that will
    increase the volume of electricity that may be imported in
    Italy; and
|
| |  | Possible initiatives taken by the Energy Authority to further
    competition such as the imposition of virtual power plant
    contracts and of restrictions on the operation of pumping plants.            









7



---



##### Table of Contents











| |                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------
| | Our facilities are subject to operating risks outside of
    our control; certain of our activities depend on third-party
    patents and licenses







| |                                                                                                                                                                       
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We may not be able to complete our power plant conversion
    and other capital investment programs on schedule or realize the
    expected benefits of these programs







| |                                                                                                                              
| | -----------------------------------------------------------------------------------------------------------------------------
| | Significant increases in fuel prices or disruptions in our
    fuel supplies could have a negative effect on our
    business



8



---



##### Table of Contents











| |                                                                                                                                                                             
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our expansion outside of Italy subjects us to risks
    associated with local market conditions, as well as to risks
    associated with operating the businesses we acquire











9



---



##### Table of Contents









| |                                                                                                                                                                                                                                                                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We face legal proceedings and potential regulatory
    measures arising from the 2003 power outage that affected all of
    Italy that could have a material adverse effect on our financial
    condition and results of operations. Further power outages
    involving our electricity operations could also adversely affect
    our financial condition and results of operations










10



---



##### Table of Contents









| |                                                                                                                                      
| | -------------------------------------------------------------------------------------------------------------------------------------
| | We have been and are subject to regulatory investigations,
    including for possible abuse of dominant position and market
    abuse









| |                                                                                                                                                                                                              
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The European Commission has launched an investigation into
    the functioning of the European energy market that could lead to
    measures which could have a material adverse effect on our
    operations





| |                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------
| | The European Commission may decide that priority access
    rights of long-term supply contracts are contrary to EU
    law



11



---



##### Table of Contents







| |                                                                                                                                                                              
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | A European Commission challenge to Italian regulations on
    hydroelectric concessions could adversely affect our business,
    financial condition and result of operations









| |                                                                                                   
| | --------------------------------------------------------------------------------------------------
| | We are dependent on government concessions for our
    electricity and gas distribution businesses



12



---



##### Table of Contents











| |                                                                                                                                                                                                                                                                       
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our businesses are subject to numerous environmental
    regulations, and we are parties to a significant number of legal
    proceedings relating to environmental matters, that could
    significantly affect our financial condition and results of
    operations

2 2




   2






13



---



##### Table of Contents



Other Risks Relating to Our Businesses




| |                                                                                                                                                                                                                               
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We may be unable to exit the telecommunications business
    on acceptable terms or in accordance with the currently
    envisaged timetable, which would have an adverse effect on our
    managements current business plan








| |                                                                                                            
| | -----------------------------------------------------------------------------------------------------------
| | Our historical consolidated financial and operating
    results may not be indicative of future performance









| |                                                                                        
| | ---------------------------------------------------------------------------------------
| | The Italian social security fund is seeking to impose
    significant liabilities on us




14



---



##### Table of Contents





| |                                                                             
| | ----------------------------------------------------------------------------
| | Legislation enacted in 2005 could increase our local
    property tax burden











| |                                                   
| | --------------------------------------------------
| | We are defendants in a number of legal proceedings

 




Risks Relating to Enels Ordinary Shares and ADSs




| |                                                                                           
| | ------------------------------------------------------------------------------------------
| | The MEF, Enels controlling shareholder, has
    significant influence over Enels actions

de facto




| |                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------
| | The special powers of the Italian government may permit it
    to influence Enels business, regardless of the level of
    its shareholding



15



---



##### Table of Contents









| |   |                                                                                                                                                                                                                                                                                    
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The power to oppose the acquisition by persons or entities of an
    interest in the Company equal to or in excess of 3% of the
    shares with voting rights at the ordinary shareholders
    meetings;                                                                          
|
| |  | The power to oppose certain types of shareholders
    agreements entered into by holders of at least one-twentieth of
    the voting capital stock at ordinary shareholders meetings;                                                                                            
|
| |  | The power to veto any resolution to dissolve, merge or demerge
    Enel, transfer a significant part of Enels business or
    Enels registered headquarters outside of Italy, change
    Enels corporate purpose or eliminate or modify any of the
    MEFs special powers; and
|
| |  | The power to directly appoint one non-voting member of
    Enels board of directors, in addition to the voting
    members elected by Enels shareholders.                                                                                                                        







| |                                                                                                                                                                                                    
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The value of ordinary shares or ADSs may be adversely
    affected by sales of substantial amounts of shares by the MEF or
    other shareholders or the perception that such sales could
    occur







| |                                                                                                                                                                                                         
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The value, expressed in dollars, of the ordinary shares
    and ADSs and of any dividends Enel pays in respect of its
    ordinary shares and ADSs will be affected by the euro/dollar
    exchange rate





| |                                                                                                     
| | ----------------------------------------------------------------------------------------------------
| | It is possible that the price of ordinary shares and ADSs
    will experience significant volatility



16



---



##### Table of Contents





| |                                                                                                                                  
| | ---------------------------------------------------------------------------------------------------------------------------------
| | If you hold ADSs rather than ordinary shares it may be
    difficult for you to exercise some of your rights as a
    shareholder






Forward-Looking Statements






| |   |                                                                                                                                                                                       
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Anticipated trends in our businesses, including trends in demand
    for electricity;                                                                                                 
|
| |  | Changes in the regulatory environment and expectations on how
    and when new regulations will be implemented;                                                                       
|
| |  | The remuneration of our generation activities based on
    competitive electricity prices rather than tariffs following the
    introduction of trading on the Italian power exchange;
|
| |  | The impact of changes in electricity and gas tariffs;                                                                                                                                 
|
| |  | Our ability to implement our cost reduction program successfully;                                                                                                                     
|
| |  | The possibility that significant volumes of lower-cost
    electricity will become available as a result of increased
    imports and the construction of new plants in Italy;        
|
| |  | Our intention to divest our interest in Weather Investment;                                                                                                                           
|
| |  | Our intentions with respect to future dividend payments;                                                                                                                              
|
| |  | Our intention to expand our core businesses, including by
    increasing our presence in renewable energy and developing our
    gas distribution and sales business;                 
|
| |  | Our intention to expand our operations outside Italy; and                                                                                                                             
|
| |  | Future capital expenditures and investments.                                                                                                                                          



17



---



##### Table of Contents








|        |                           
|------- | --------------------------
|ITEM 4. | INFORMATION ON THE COMPANY




History and Development of the Company


(Ente Nazionale per lEnergia Elettrica)






  




18



---



##### Table of Contents














società per azioni statuto





Business





Overview


 


19



---



##### Table of Contents





|                                                                       |                                                          |      |       |       |      |  |       |       |  |  |       |       | 
|---------------------------------------------------------------------- | -------------------------------------------------------- | ---- | ----- | ----- | ---- |  | ----- | ----- |  |  | ----- | ----- | 
|                                                                       |                                                          | 2003 |       |       | 2004 |  |       | 2005  | 
|                                                                       |                                                          |      |       |       |      |  |       |       | 
|Net installed capacity (GW) in Italy at year end                       |                                                          |      | 41.8  |       |      |  | 42.0  |       |  |  | 42.2  |      
|Net electricity production in Italy (TWh)                              |                                                          |      | 137.8 |       |      |  | 125.9 |       |  |  | 112.1 |      
|Electricity sales to end users in Italy (TWh)(1)                       |                                                          |      | 152.2 |       |      |  | 157.8 |       |  |  | 148.2 |      
|                                                                       | Electricity sales on the regulated market in Italy (TWh) |      |       | 141.5 |      |  |       | 137.0 |  |  |       | 129.7 | 
|                                                                       | Electricity sales on the free market in Italy (TWh)      |      |       | 10.7  |      |  |       | 20.8  |  |  |       | 18.5  | 
|Total electricity distributed in Italy (TWh)(2)                        |                                                          |      | 265.0 |       |      |  | 261.2 |       |  |  | 259.3 |      
|Natural gas sales to end users in Italy (billions of cubic
    meters) |                                                          |      | 4.4   |       |      |  | 5.2   |       |  |  | 5.1   |      
|Natural gas sales customers in Italy at year end (millions)            |                                                          |      | 1.8   |       |      |  | 2.0   |       |  |  | 2.1   |      






|    |                                                
|--- | -----------------------------------------------
|(1) | Excluding sales to resellers.                  
|   
|(2) | Including electricity distributed to resellers.





Generation and Energy Management.




20



---



##### Table of Contents





     


Sales, Infrastructure and Networks.










       


Corporate.


21



---



##### Table of Contents



 


Services and Other Activities.   


Discontinued Operations.






22



---



##### Table of Contents











Strategy




23



---



##### Table of Contents







| |   |                                                                                                                                                                                                                                                                                                                                                          
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Reducing our Italian power generation costs to levels lower than
    those of our competitors, in particular through the conversion
    of certain generation plants to run on less expensive fuels, and
    the alignment of our other operating costs with international
    best practice through an integrated approach to quality and
    standards;
|
| |  | Increasing our presence in the market for electricity generated
    from renewable resources;                                                                                                                                                                                                                                                            
|
| |  | Increasing electricity sales volumes and the number of customers
    in the free market in order to maximize our production margin by
    matching production volumes and sales volumes;                                                                                                                                                                 
|
| |  | Consolidating our position in the natural gas distribution
    business in Italy, where we are the second-largest operator;                                                                                                                                                                                                                              
|
| |  | Extracting value from the integrated management of our
    electricity and natural gas services in Italy;                                                                                                                                                                                                                                                
|
| |  | Meeting our operating efficiency targets in the distribution and
    sale of electricity and natural gas; and                                                                                                                                                                                                                                            
|
| |  | Expanding our operations outside Italy, particularly in
    countries where we are already present or where market
    liberalization and privatization efforts are in progress, in
    which we can capitalize on the experience and technical know-how
    we have acquired in the Italian market.                                                     



  






| |                                 
| | --------------------------------
| | Generation and Energy Management









| |   |                                                                                                                                                                                                   
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Continue its program to convert certain of our thermal
    generation plants to CCGT plants capable of generating
    approximately 5,000 MW. Much of this program has already
    been completed;

24



---



##### Table of Contents





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Upgrade additional plants to run on lower-cost fuels, such as
    coal, while still respecting environmental norms;                                                                                                                                                                                                                                                                                                                                          
|
| |  | Consolidate its position in the field of renewable energy,
    including through an investment program expected to total
    approximately
    1.3 billion
    from 2006 through 2010. This program includes plans for the
    maintenance, refurbishment and construction of wind,
    hydroelectric and geothermal generation plants in Italy that we
    expect will result in 300 MW of additional net installed
    capacity;                          
|
| |  | Reduce
    CO2
    emissions through our integrated investment strategy, which
    contemplates the conversion of old oil-fired plants into CCGT
    and high efficiency coal plants and the enhancement of our
    renewable generation capacity, as well as sourcing
    CO2
    credits by participating in the Clean Development Mechanism and
    Joint Implementation Projects (emission reduction projects under
    the terms of the Kyoto Protocol);
|
| |  | Continually seek to achieve operating excellence while
    increasing the efficiency and availability of its plants and
    respecting the environment and the health and safety of its
    employees;                                                                                                                                                                                                                                                       
|
| |  | Continue its efforts to reduce its operating and maintenance
    expenses until it attains international best practice
    levels; and                                                                                                                                                                                                                                                                                                                       
|
| |  | Optimize its fuel procurement activities, through a
    diversification of suppliers and supply channels.                                                                                                                                                                                                                                                                                                                                                    



| |                            
| | ---------------------------
| | Infrastructure and Networks





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Continue our program to reduce operating costs and optimize our
    investment expenditures, by seeking constantly to improve our
    administrative processes, increasing our use of technology to
    support our activities and evaluating our investments more
    strictly from a financial perspective;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|
| |  | Continue to improve our performance with respect to the targets
    set by the Energy Authority for quality and continuity of
    service in those geographic areas where these targets have not
    yet been achieved, and maintaining the quality and continuity of
    service where they have been achieved or exceeded; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|
| |  | Complete the roll-out of our Telemanagement digital
    metering program in Italy by the end of 2006, in order to
    (i) reduce costs associated with physical measurement of
    consumption and on-site
    maintenance of meters by our personnel, as these tasks would be
    accomplished remotely; (ii) measure the electricity
    consumption of our customers more accurately; (iii) improve
    our response times in providing technical assistance to our
    customers and provide higher quality service; and
    (iv) offer our customers tailored tariff plans that promote
    the use of electricity in off-peak periods and provide customers
    with opportunities to save money. We entered into an agreement
    with IBM in March 2004 to commercialize our digital metering
    know-how for use by other utilities in Italy and abroad in an
    effort to further benefit from this program. At March 31,
    2006, we had installed approximately 27.6 million digital
    meters, of which approximately 25.5 million were connected
    to our remote network.



25



---



##### Table of Contents





| |       
| | ------
| | Market









| |                         
| | ------------------------
| | International Operations









| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Spain. The Spanish electricity market is particularly
    important for us, since the demand for electricity in Spain is
    expected to grow at a higher rate than in other European
    markets, and we are already present in Spain through our Spanish
    subsidiaries Enel Viesgo Generaciòn (electricity
    generation), Electra de Viesgo Distribuciòn (electricity
    distribution) and our affiliate EUFR (electricity generation
    from renewable resources). We intend to develop our ability to
    generate electricity from renewable resources and convert
    certain coal and gas/oil-fired units into CCGT and more
    environmentally friendly plants. Moreover, by 2009 we intend to
    implement a Telemanagement digital meter system in Spain similar
    to the system we are completing in Italy. Please see
     Sales, Infrastructure and Networks 
    Domestic Distribution and Sales Operations 
    Telemanagement Systems for a description of our
    Telemanagement digital meter system in Italy. We expect to
    invest approximately
    2,044 million
    in our Spanish operations from 2006 through 2010.
|
| | Romania. We are interested in the Romanian electricity
    market, particularly in light of Romanias scheduled
    accession to the EU in 2007. We are already present in Romania
    through Enel Electrica Banat (formerly Electrica Banat), and
    Enel Electrica Dobrogea (formerly Electrica Dobrogea), two
    distribution companies in which we acquired a 51% stake in 2005,
    and where we are introducing management know-how and standards
    that are in line with Western European best practices. Moreover,
    in June 2006 we won the auction for a 67.5% stake in the
    Romanian power distribution company Electrica Muntenia Sud. Upon
    the successful completion of this transaction, we expect to
    serve approximately 2.5 million customers in Romania,
    including customers from Enel Electrica Banat and Enel Electrica
    Dobrogea. We also intend to enter the Romanian generation
    business, once it is privatized.                                                                                                                                                                                            
|
| | Slovakia. We are interested in the Slovakian electricity
    market due to its strong interconnection with other Central
    European markets. We already have a strong presence in the
    Slovakian electricity market through SE, and we will monitor
    further opportunities that may arise. We also plan to upgrade
    SEs existing nuclear plants and to invest in renewable
    resources. We are currently committed to develop two additional
    nuclear units for SE by 2013. Finally, in April 2006 we
    submitted a binding offer for the acquisition of a                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

26



---



##### Table of Contents



| |                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 90% interest in Paroplinovy Cyklus Bratislava, a Slovakian
    electricity generation company with an installed capacity of
    220 MW. We do not expect the outcome of this offer to be
    known before August 2006.                                                                                                                                                                                                                  
|
| | Northern and Latin America. We are present in North
    America and Central and South America through Enel North America
    and Enel Latin America, respectively. We intend to grow our
    operations in these regions, particularly in the renewable
    resources market through the acquisitions and development of
    hydroelectric, wind and geothermal generation plants in North
    America and in Central and South America.




The Enel Group







| |                           
| | --------------------------
| | Italian Electricity Demand



|                                |  |      |     |   |      |  |     |      |  |  |      |                |  |      |     |   |           |  |     |   |  |  |      |  
|------------------------------- |  | ---- | --- | - | ---- |  | --- | ---- |  |  | ---- | -------------- |  | ---- | --- | - | --------- |  | --- | - |  |  | ---- | -
|                                |  |      |     |   |      |  |     |      |  |  |      | Average Annual | 
|                                |  |      |     |   |      |  |     |      |  |  |      | Growth Rate    | 
|                                |  | 2001 |     |   | 2002 |  |     | 2003 |  |  | 2004 |                |  | 2005 |     |   | 2001-2005 | 
|                                |  |      |     |   |      |  |     |      |  |  |      |                |  |      |     |   |           | 
|Growth in real GDP(1)           |  |      | 1.8 | % |      |  | 0.4 | %    |  |  | 0.3  | %              |  |      | 1.2 | % |           |  | 0.0 | % |  |  | 0.74 | %
|Growth in electricity demand(2) |  |      | 2.1 | % |      |  | 1.9 | %    |  |  | 3.2  | %              |  |      | 1.5 | % |           |  | 1.3 | % |  |  | 2.0  | %








|    |                                                                                                     
|--- | ----------------------------------------------------------------------------------------------------
|(1) | National Institute of Statistics (Istituto Nazionale di
    Statistica).                            
|   
|(2) | Terna (data for the years before 2005 were provided by the
    GRTN). Data for 2005 are provisional.





|               |  |               |       |             |             |            |             |                  |  |  |       | 
|-------------- |  | ------------- | ----- | ----------- | ----------- | ---------- | ----------- | ---------------- |  |  | ----- | 
|               |  |               |       |             |             | Per Capita |            
|               |  |               |       | Residential |             |            | Residential |                 
|               |  | Inhabitants   |       |             | Consumption |            |             | Consumption      | 
|               |  |               |       |             |             |            |             |                  | 
|               |  | (In millions) |       |             | (TWh)       |            |             | (KWh/inhabitant) | 
|France         |  |               | 59.8  |             |             |            | 141.0       |                  |  |  | 2,358 | 
|United Kingdom |  |               | 59.4  |             |             |            | 117.2       |                  |  |  | 1,973 | 
|Germany        |  |               | 82.6  |             |             |            | 135.7       |                  |  |  | 1,643 | 
|Spain          |  |               | 41.1  |             |             |            | 53.7        |                  |  |  | 1,307 | 
|Italy          |  |               | 57.7  |             |             |            | 63.7        |                  |  |  | 1,104 | 
|European Union |  |               | 380.2 |             |             |            | 685.3       |                  |  |  | 1,803 | 








27



---



##### Table of Contents










| |                                 
| | --------------------------------
| | Generation and Energy Management




















| |                    
| | -------------------
| | Domestic Generation



| |                      
| | ---------------------
| | Generating Facilities







28



---



##### Table of Contents





|                                      |                                   |          |         |         |          |  |         |          |  |  |         |         | 
|------------------------------------- | --------------------------------- | -------- | ------- | ------- | -------- |  | ------- | -------- |  |  | ------- | ------- | 
|                                      |                                   | 2003     |         |         | 2004     |  |         | 2005*    | 
|                                      |                                   |          |         |         |          |  |         |          | 
|                                      |                                   | (In GWh) |         |         | (In GWh) |  |         | (In GWh) | 
|Gross production:                     |                                   |          |         |         |          |  |         |          |  |  |         |        
|Thermal                               |                                   |          | 242,784 |         |          |  | 246,125 |          |  |  | 252,412 |        
|Hydroelectric                         |                                   |          | 44,277  |         |          |  | 49,908  |          |  |  | 42,482  |        
|Geothermal and other renewable        |                                   |          | 6,804   |         |          |  | 7,288   |          |  |  | 7,465   |        
|                                      |                                   |          |         |         |          |  |         |          | 
|                                      | Total gross production in Italy   |          |         | 293,865 |          |  |         | 303,321  |  |  |         | 302,359 | 
|Power used by auxiliary installations |                                   |          | (13,682 | )       |          |  | (13,299 | )        |  |  | (12,704 | )      
|                                      |                                   |          |         |         |          |  |         |          | 
|                                      | Total net production in Italy     |          |         | 280,183 |          |  |         | 290,022  |  |  |         | 289,655 | 
|Net electricity imports               |                                   |          | 50,968  |         |          |  | 45,635  |          |  |  | 49,155  |        
|Total pumped storage consumption      |                                   |          | (10,492 | )       |          |  | (10,300 | )        |  |  | (9,369  | )      
|                                      |                                   |          |         |         |          |  |         |          | 
|                                      | Total electricity demand in Italy |          |         | 320,659 |          |  |         | 325,357  |  |  |         | 329,441 | 
|                                      |                                   |          |         |         |          |  |         |          | 








| |   |                               
| | - | ------------------------------
| | * | Data for 2005 are provisional.





|                               |       |                      |      |      |             |  |    |            |  |            |            |         |        |        |      |       |   |  |     |   | 
|------------------------------ | ----- | -------------------- | ---- | ---- | ----------- |  | -- | ---------- |  | ---------- | ---------- | ------- | ------ | ------ | ---- | ----- | - |  | --- | - | 
|                               |       | At December 31, 2005 |      |      | 2005        | 
|                               |       |                      |      |      |             | 
|                               |       | Net                  |      |      | Weighted    |  |    |            |  | Percentage |            |         | Forced |       
|                               |       | Installed            |      |      | Average Age |  |    | Net        |  |            | of Our Net |         |        | Outage |     
|                               |       | Capacity             |      |      | of Plant    |  |    | Production |  |            | Production |         |        | Factor |     
|                               |       |                      |      |      |             |  |    |            |  |            |            |         |        |        |     
|                               |       | (GW)                 |      |      | (Years)     |  |    | (GWh)      |  |            |           
|                               |       |                      |      |      |             |  |    | (Percent)  | 
|Thermal                        |       |                      | 26.9 |      |             |  | 20 |            |  |            | 81,823     |         |        |        | 73.0 | %     |   |  | 1.5 | %
|Hydroelectric                  |       |                      | 14.4 |      |             |  | 43 |            |  |            | 24,883     |         |        |        | 22.2 | %     |   |  | 1.4 | %
|Geothermal and other renewable |       |                      | 0.9  |      |             |  | 8  |            |  |            | 5,381      |         |        |        | 4.8  | %     |   |  | 1.5 | %
|                               |       |                      |      |      |             |  |    |            |  |            |            |         |        |        |     
|                               | Total |                      |      | 42.2 |             |  |    |            |  |            |            | 112,087 |        |        |      | 100.0 | % |  |     |   | 
|                               |       |                      |      |      |             |  |    |            |  |            |            |         |        |        |     





| |                   
| | ------------------
| | Thermal Production



29



---



##### Table of Contents









  






| |   |                                                                                                                                                                                                                                                                                                       
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | completing the upgrading of the coal-burning technology of our
    existing coal plant, Sulcis, which we expect to become
    operational in the second half of 2006 (accouting for
    approximately 300 MW);                                                                                        
|
| |  | converting three units at our fuel-oil plant at Torrevaldaliga
    Nord to clean coal technology, a process which is in progress
    and which we expect complete between 2008 and 2009 (accounting
    for approximately 1,900 MW); and                                                              
|
| |  | subject to receipt of required permits, converting another three
    units to clean coal technology (accounting for approximately
    1,900 MW). Depending on whether and when we obtain the
    required permits, we estimate that the converted facilities
    would be operational by 2010 or 2011.



30



---



##### Table of Contents








| |                         
| | ------------------------
| | Hydroelectric Production



run-of


run-of









| |                                                         
| | --------------------------------------------------------
| | Production from Geothermal and Other Renewable Resources



31



---



##### Table of Contents
















| |     
| | ----
| | Fuel





32



---



##### Table of Contents






 








|                      |               |             |        |         |            |  |       |             |   |  |            |         |  |             |      |       |            |  |        |         |  |  |      |       |  
|--------------------- | ------------- | ----------- | ------ | ------- | ---------- |  | ----- | ----------- | - |  | ---------- | ------- |  | ----------- | ---- | ----- | ---------- |  | ------ | ------- |  |  | ---- | ----- | -
|                      |               | 2003        |        |         | 2004       |  |       | 2005        |  
|                      |               |             |        |         |            |  |       |             |  
|                      |               | Net         |        |         |            |  | Net   |             |   |  |            | Net     |  |             |     
|                      |               | Electricity |        |         | Percentage |  |       | Electricity |   |  | Percentage |         |  | Electricity |      |       | Percentage | 
|                      |               | Produced    |        |         | of Total   |  |       | Produced    |   |  | of Total   |         |  | Produced    |      |       | of Total   | 
|                      |               |             |        |         |            |  |       |             |   |  |            |         |  |             |      |       |            | 
|                      |               | (GWh)       |        |         |            |  | (GWh) |             |   |  |            | (GWh)   |  |             |     
|Thermal               |               |             |        |         |            |  |       |             |   |  |            |         |  |             |      |       |            |  |        |         |  |  |      |      
| Natural gas         |               |             | 48,802 |         |            |  | 35.4  |             |   |  | 40,602     |         |  |             | 32.3 |       |            |  | 37,824 |         |  |  | 33.7 |      
| Coal and orimulsion |               |             | 30,030 |         |            |  | 21.8  |             |   |  | 30,700     |         |  |             | 24.4 |       |            |  | 30,001 |         |  |  | 26.8 |      
| Oil                 |               |             | 27,838 |         |            |  | 20.2  |             |   |  | 20,552     |         |  |             | 16.3 |       |            |  | 13,998 |         |  |  | 12.5 |      
|                      | Total thermal |             |        | 106,669 |            |  |       | 77.4        |   |  |            | 91,854  |  |             |      | 73.0  |            |  |        | 81,823  |  |  |      | 73.0  |  
|Hydroelectric         |               |             | 26,012 |         |            |  | 18.9  |             |   |  | 28,659     |         |  |             | 22.8 |       |            |  | 24,883 |         |  |  | 22.2 |      
|Geothermal            |               |             | 5,036  |         |            |  | 3.6   |             |   |  | 5,120      |         |  |             | 4.1  |       |            |  | 5,012  |         |  |  | 4.5  |      
|Wind and photovoltaic |               |             | 77     |         |            |  | 0.06  |             |   |  | 235        |         |  |             | 0.2  |       |            |  | 369    |         |  |  | 0.3  |      
|                      |               |             |        |         |            |  |       |             |   |  |            |         |  |             |      |       |            | 
|                      | Total         |             |        | 137,794 |            |  |       | 100.0       | % |  |            | 125,868 |  |             |      | 100.0 | %          |  |        | 112,087 |  |  |      | 100.0 | %
|                      |               |             |        |         |            |  |       |             |   |  |            |         |  |             |      |       |            | 





| |   |                 
| | - | ----------------
| |  | 46% natural gas;
|
| |  | 37% coal; and   
|
| |  | 17% fuel oil.   





33



---



##### Table of Contents





2




| |         
| | --------
| | Fuel Oil



|                   |                          |                       |     |     |      |  |     |      |  |  |     |     | 
|------------------ | ------------------------ | --------------------- | --- | --- | ---- |  | --- | ---- |  |  | --- | --- | 
|                   |                          | Year Ended            |    
|                   |                          | December 31,          |    
|                   |                          |                       |    
|                   |                          | 2003                  |     |     | 2004 |  |     | 2005 | 
|                   |                          |                       |     |     |      |  |     |      | 
|                   |                          | (In millions of tons) |    
|Domestic suppliers |                          |                       | 1.2 |     |      |  | 1.0 |      |  |  | 0.9 |    
|Foreign suppliers  |                          |                       | 5.3 |     |      |  | 3.8 |      |  |  | 2.7 |    
|                   |                          |                       |     |     |      |  |     |      | 
|                   | Total fuel oil purchased |                       |     | 6.5 |      |  |     | 4.8  |  |  |     | 3.6 | 
|                   |                          |                       |     |     |      |  |     |      | 





|                   |       |                       |     |     |      |  |     |      |  |  |     |     | 
|------------------ | ----- | --------------------- | --- | --- | ---- |  | --- | ---- |  |  | --- | --- | 
|                   |       | Year Ended            |    
|                   |       | December 31,          |    
|                   |       |                       |    
|                   |       | 2003                  |     |     | 2004 |  |     | 2005 | 
|                   |       |                       |     |     |      |  |     |      | 
|                   |       | (In millions of tons) |    
|Fuel oil purchased |       |                       |     |     |      |  |     |      |  |  |     |    
|Low sulfur         |       |                       | 4.0 |     |      |  | 3.0 |      |  |  | 2.3 |    
|Mid sulfur         |       |                       | 2.5 |     |      |  | 1.6 |      |  |  | 1.0 |    
|High sulfur        |       |                       | 0.0 |     |      |  | 0.2 |      |  |  | 0.3 |    
|                   |       |                       |     |     |      |  |     |      | 
|                   | Total |                       |     | 6.5 |      |  |     | 4.8  |  |  |     | 3.6 | 
|                   |       |                       |     |     |      |  |     |      | 



| |            
| | -----------
| | Natural Gas



34



---



##### Table of Contents







20-year




  




| |     
| | ----
| | Coal





| |                        
| | -----------------------
| | CO2
    emission rights

2 2




2


 2


35



---



##### Table of Contents



2




| |                
| | ---------------
| | Purchased Power







|                    |               |       |      |      |      |  |      |      |  |  |      |      | 
|------------------- | ------------- | ----- | ---- | ---- | ---- |  | ---- | ---- |  |  | ---- | ---- | 
|                    |               | 2003  |      |      | 2004 |  |      | 2005 | 
|                    |               |       |      |      |      |  |      |      | 
|                    |               | (TWh) |     
|Long-term contracts |               |       | 15.5 |      |      |  | 14.4 |      |  |  | 14.4 |     
|Annual contracts    |               |       | 0.6  |      |      |  | 1.1  |      |  |  | 2.5  |     
|Spot purchases      |               |       | 0.0  |      |      |  | 0.1  |      |  |  | 0.1  |     
|                    |               |       |      |      |      |  |      |      | 
|                    | Total imports |       |      | 16.0 |      |  |      | 15.7 |  |  |      | 17.0 | 
|                    |               |       |      |      |      |  |      |      | 







| |                         
| | ------------------------
| | International Generation



   2


36



---



##### Table of Contents



 





 









37



---



##### Table of Contents



,













|                   |       |         |     |     |         |  |     |        |  |         |          |       |       |          |     |              |      |  |     |     |  |  |       |       | 
|------------------ | ----- | ------- | --- | --- | ------- |  | --- | ------ |  | ------- | -------- | ----- | ----- | -------- | --- | ------------ | ---- |  | --- | --- |  |  | ----- | ----- | 
|                   |       | Enel    |     |     | Enel    |  |     |        |  |         |          |       |       | Total at |    
|                   |       | North   |     |     | Latin   |  |     |        |  | Maritza |          |       | Uniòn |          |     | December 31, |     
|                   |       | America |     |     | America |  |     | Viesgo |  |         | East III |       |       | Fenosa   |     |              | 2005 | 
|                   |       |         |     |     |         |  |     |        |  |         |          |       |       |          |     |              |      | 
|                   |       |         |     |     |         |  |     | (MW)   |  |         |          |       |      
|Thermal            |       |         |    |     |         |  |    |        |  |         | 1,592    |       |       |          | 549 |              |      |  |    |     |  |  | 2,141 |      
|Hydroelectric      |       |         | 313 |     |         |  | 174 |        |  |         | 672      |       |       |          |    |              |      |  |    |     |  |  | 1,159 |      
|Wind               |       |         | 67  |     |         |  | 24  |        |  |         |         |       |       |          |    |              |      |  | 321 |     |  |  | 412   |      
|Biomass and Biogas |       |         | 22  |     |         |  |    |        |  |         |         |       |       |          |    |              |      |  |    |     |  |  | 22    |      
|Cogeneration       |       |         |    |     |         |  |    |        |  |         |         |       |       |          |    |              |      |  | 52  |     |  |  | 52    |      
|                   |       |         |     |     |         |  |     |        |  |         |          |       |       |          |     |              |      | 
|                   | Total |         |     | 402 |         |  |     | 198    |  |         |          | 2,264 |       |          |     | 549          |      |  |     | 373 |  |  |       | 3,786 | 
|                   |       |         |     |     |         |  |     |        |  |         |          |       |       |          |     |              |      | 



38



---



##### Table of Contents










| |                                   
| | ----------------------------------
| | Sales, Infrastructure and Networks







beyond-the




| |                                           
| | ------------------------------------------
| | Domestic Distribution and Sales Operations



| |                      
| | ---------------------
| | Electricity Companies





| |   |                                                                                                                                                                                                                                                                   
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Enel Distribuzione, which owns the electricity distribution
    network serving the free and regulated markets and sells
    electricity on the regulated market;                                                                                                 
|
| |  | Deval, a subsidiary in which we own a 51% interest, which
    engages in similar activities in the region of Valle
    dAosta ;                                                                                                                                  
|
| |  | Enel Energia, which sells electricity on the free market to
    customers with annual consumption of up to 100 GWh (while sales
    to customers with higher consumption levels are made through
    Enel Trade of our Generation and Energy Management Division);
|
| |  | Enel Sole, which provides public and art lighting
    services; and                                                                                                                                                                                               
|
| |  | Enel.si, which provides electricity systems-related services.                                                                                                                                                                                                     





| |                            
| | ---------------------------
| | Distribution of Electricity



39



---



##### Table of Contents





|                                               |       |                         |         |         |      |  |         |         |  |  |         |         | 
|---------------------------------------------- | ----- | ----------------------- | ------- | ------- | ---- |  | ------- | ------- |  |  | ------- | ------- | 
|                                               |       | Year Ended December 31, |        
|                                               |       |                         |        
|                                               |       | 2003                    |         |         | 2004 |  |         | 2005    | 
|                                               |       |                         |         |         |      |  |         |         | 
|                                               |       | (In GWh)                |        
|Distributed to free market                     |       |                         | 102,973 |         |      |  | 113,691 |         |  |  | 121,370 |        
|Distributed (and sold) on the regulated market |       |                         | 141,453 |         |      |  | 136,961 |         |  |  | 129,677 |        
|                                               |       |                         |         |         |      |  |         |         | 
|                                               | Total |                         |         | 244,426 |      |  |         | 250,652 |  |  |         | 251,047 | 
|                                               |       |                         |         |         |      |  |         |         | 





|          |  |                 |  |        |  |       
|--------- |  | --------------- |  | ------ |  | ------
|          |  | At December 31,
|          |  |                
|          |  | 2003            |  | 2004   |  | 2005  
|          |  |                 |  |        |  |       
|Employees |  | 33,106          |  | 32,595 |  | 29,299





| |                                 
| | --------------------------------
| | Electricity Distribution Network



|                               |  |              |         |  |              |  |         |              |  |  |             |  |           |             |         |             |          |  |         |  |  |  |        | 
|------------------------------ |  | ------------ | ------- |  | ------------ |  | ------- | ------------ |  |  | ----------- |  | --------- | ----------- | ------- | ----------- | -------- |  | ------- |  |  |  | ------ | 
|                               |  | Under-       |         |  | Insulated    |  |         | Bare         |  |  |             |  | Number of |             |         | Transformer |         
|Type                           |  | ground Lines |         |  | Aerial Lines |  |         | Aerial Lines |  |  | Total Lines |  |           | Substations |         |             | Capacity | 
|                               |  |              |         |  |              |  |         |              |  |  |             |  |           |             |         |             |          | 
|                               |  | (km)         |         |  | (km)         |  |         | (km)         |  |  | (km)        |  |           | (MVA)       |         |             |         
|Primary:                       |  |              |         |  |              |  |         |              |  |  |             |  |           |             |         |             |          |  |         |  |  |  |        | 
|High voltage lines (40-150 kV) |  |              | 468     |  |              |  |        |              |  |  | 18,484      |  |           |             | 18,952  |             |          |  |         |  |  |  |        | 
|Primary substations            |  |              |         |  |              |  |         |              |  |  |             |  |           |             |         |             |          |  | 2,029   |  |  |  | 94,000 | 
|Secondary:                     |  |              |         |  |              |  |         |              |  |  |             |  |           |             |         |             |          |  |         |  |  |  |        | 
|Medium voltage lines (1-30 kV) |  |              | 125,017 |  |              |  | 7,932   |              |  |  | 202,202     |  |           |             | 335,151 |             |          |  |         |  |  |  |        | 
|Low voltage lines              |  |              | 226,238 |  |              |  | 385,915 |              |  |  | 123,873     |  |           |             | 736,026 |             |          |  |         |  |  |  |        | 
|Secondary substations          |  |              |         |  |              |  |         |              |  |  |             |  |           |             |         |             |          |  | 411,404 |  |  |  | 68,600 | 

40



---



##### Table of Contents









| |                                                   
| | --------------------------------------------------
| | Consolidation of Electricity Distribution Networks

  




 







41



---



##### Table of Contents





| |                                      
| | -------------------------------------
| | Sales to Regulated Electricity Market





| |   |                                                                                                                                                              
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | All Non-Eligible Customers, or customers who do not meet the
    consumption threshold for participation in the free
    market; and                         
|
| |  | Those Eligible Customers, or customers who meet the consumption
    threshold for participation in the free market, that choose not
    to participate in it.





|                |       |             |        |             |           |  |         |          |           |             |             |         |           |          |        |         |          |  |           |         |  |  |          |         |  |  |         |         |  |  |        |         | 
|--------------- | ----- | ----------- | ------ | ----------- | --------- |  | ------- | -------- | --------- | ----------- | ----------- | ------- | --------- | -------- | ------ | ------- | -------- |  | --------- | ------- |  |  | -------- | ------- |  |  | ------- | ------- |  |  | ------ | ------- | 
|                |       | 2004        |        |             | 2005      | 
|                |       |             |        |             |           | 
|                |       |             |        | Distributed |           |  |         |          |           |             | Distributed |         |           |         
|                |       |             |        | and Sold    |           |  |         |          |           |             | and Sold    |         |           |         
|                |       | Distributed |        |             | on the    |  |         |          |           | Distributed |             |         | on the    |          |        |        
|                |       | to the Free |        |             | Regulated |  |         |          |           | to the Free |             |         | Regulated |          |        |        
|                |       | Market      |        |             | Market    |  |         | Total    |           |             | Revenues    |         |           | Market   |        |         | Market   |  |           | Total   |  |  | Revenues |        
|                |       |             |        |             |           |  |         |          |           |             |             |         |           |          |        |         |          |  |           |         |  |  |          |        
|                |       |             |        | (In GWh)    |           |  |         |          | (Millions |             |             |         |           | (In GWh) |        |         |          |  | (Millions |        
|                |       |             |        |             |           |  |         | of euro) |           |             |             |         |           |          |        |         | of euro) | 
|High voltage(1) |       |             | 45,083 |             |           |  | 4,827   |          |           |             | 49,910      |         |           |          | 529   |         |          |  | 46,212    |         |  |  | 5,319    |         |  |  | 51,131  |         |  |  | 611   |        
|Medium voltage  |       |             | 63,372 |             |           |  | 23,966  |          |           |             | 87,338      |         |           |          | 2,782  |         |          |  | 67,060    |         |  |  | 20,247   |         |  |  | 87,307  |         |  |  | 2,641  |        
|Low voltage     |       |             | 5,236  |             |           |  | 108,168 |          |           |             | 113,404     |         |           |          | 11,791 |         |          |  | 8,098     |         |  |  | 104,111  |         |  |  | 112,209 |         |  |  | 12,260 |        
|                |       |             |        |             |           |  |         |          |           |             |             |         |           |          |        |         |          |  |           |         |  |  |          |        
|                | Total |             |        | 113,691     |           |  |         | 136,961  |           |             |             | 250,652 |           |          |        | 15,102 |          |  |           | 121,370 |  |  |          | 129,677 |  |  |         | 251,047 |  |  |        | 15,512 | 
|                |       |             |        |             |           |  |         |          |           |             |             |         |           |          |        |         |          |  |           |         |  |  |          |        






|    |                                                                                                                                                                         
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | High-voltage sales on the regulated market are sales to the
    Ferrovie dello Stato, the Italian railway system. All
    high-voltage customers are Eligible Customers.







42



---



##### Table of Contents







| |                      
| | ---------------------
| | Telemanagement System

on-site








| |                 
| | ----------------
| | Customer Service



43



---



##### Table of Contents





| |                                          
| | -----------------------------------------
| | Continuity and Quality of Network Service



 






| |                                        
| | ---------------------------------------
| | Sales of Electricity to the Free Market





 








| |   |                                                                            
| | - | ---------------------------------------------------------------------------
| |  | specially tailored contract terms for different types of
    customers; and
|
| |  | value-added services such as energy monitoring and management.             



| |                                                
| | -----------------------------------------------
| | International Distribution and Sales Operations



44



---



##### Table of Contents




















|                                                              |  |      |       |  |      |  |       |      |  |  |       | 
|------------------------------------------------------------- |  | ---- | ----- |  | ---- |  | ----- | ---- |  |  | ----- | 
|                                                              |  | 2003 |       |  | 2004 |  |       | 2005 | 
|                                                              |  |      |       |  |      |  |       |      | 
|Electricity sales (TWh)(1)                                    |  |      | 3.943 |  |      |  | 4.458 |      |  |  | 8.093 | 
|Electricity sales on the regulated market (TWh)(1)            |  |      | 3.734 |  |      |  | 3.709 |      |  |  | 6.766 | 
|Electricity sales on the free market (TWh)(1)                 |  |      | 0.209 |  |      |  | 0.749 |      |  |  | 1.327 | 
|Electricity transported on our distribution networks (TWh)(2) |  |      | 4.741 |  |      |  | 4.952 |      |  |  | 9.651 | 






|    |                                               
|--- | ----------------------------------------------
|(1) | Excluding sales to resellers                  
|   
|(2) | Excluding electricity distributed to resellers



| |                        
| | -----------------------
| | Public and Art Lighting



45



---



##### Table of Contents










| |                                     
| | ------------------------------------
| | Electricity Systems-related Services









| |                           
| | --------------------------
| | Gas Distribution and Sales





| |   |                                                                                                                                                                      
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Enel Rete Gas and other minor companies, which own local
    distribution networks in specific parts of Italy and hold the
    related concessions for their use; and
|
| |  | Enel Gas and Easygas (which we acquired in October 2005), which
    sell natural gas to end users.                                                                   








46



---



##### Table of Contents



  




 






|                            |                     |      |           |           |      |  |           |           | 
|--------------------------- | ------------------- | ---- | --------- | --------- | ---- |  | --------- | --------- | 
|                            |                     | 2004 |           |           | 2005 | 
|                            |                     |      |           |           |      | 
|Retail (millions of
    m3) |                     |      | 2,783     |           |      |  | 3,021     |          
|Business                    |                     |      | 2,403     |           |      |  | 2,068     |          
|                            |                     |      |           |           |      | 
|                            | Natural gas sold    |      |           | 5,186     |      |  |           | 5,089     | 
|Retail                      |                     |      | 1,963,577 |           |      |  | 2,140,865 |          
|Business                    |                     |      | 2,038     |           |      |  | 2,129     |          
|                            |                     |      |           |           |      | 
|                            | Number of customers |      |           | 1,965,615 |      |  |           | 2,142,994 | 








| |                                               
| | ----------------------------------------------
| | Competition in the Electricity and Gas Markets



Electricity generation.


47



---



##### Table of Contents











| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | An increase in bilateral contracts between our competitors and
    final customers;                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|
| |  | Regulations limiting each operators access to
    international electricity sources to a maximum percentage of
    available interconnection capacity; and                                                                                                                                                                                                                                                                                                                                                                                         
|
| |  | The development of new interconnection lines that will increase
    the volume of electricity that may be imported in Italy. Through
    2005, other producers were authorized to build approximately 20
    GW of new generating capacity in Italy, of which approximately 6
    GW is already operational, and another 8 GW is expected to be
    operational by 2010. For imports, we expect an additional 2.1 GW
    of capacity to become available between 2006 and 2010, of which
    1.3 GW of import capacity has already become available.







|                                      |                           |                 |         |                     |                |  |               |        |   |  |    |     |  
|------------------------------------- | ------------------------- | --------------- | ------- | ------------------- | -------------- |  | ------------- | ------ | - |  | -- | --- | -
|                                      |                           |                 |         | Percentage of Total |                |  | Percentage of |       
|Producer                              |                           | 2005 Production |         |                     | Italian Output |  |               | Demand |  
|                                      |                           |                 |         |                     |                |  |               |        |  
|                                      |                           | (GWh)           |         |                     |                |  |              
|Enel                                  |                           |                 | 112,087 |                     |                |  | 39            | %      |   |  | 31 | %  
|Former Gencos                         |                           |                 | 52,162  |                     |                |  | 18            | %      |   |  | 16 | %  
|Edison*                               |                           |                 | 33,369  |                     |                |  | 11            | %      |   |  | 10 | %  
|Eni                                   |                           |                 | 25,000  |                     |                |  | 9             | %      |   |  | 8  | %  
|Main municipal electricity companies* |                           |                 | 10,596  |                     |                |  | 4             | %      |   |  | 3  | %  
|Other independent power producers     |                           |                 | 56,441  |                     |                |  | 19            | %      |   |  | 17 | %  
|                                      |                           |                 |         |                     |                |  |               |        |  
|                                      | Total production in Italy |                 |         | 289,655             |                |  |               | 100    | % |  |    |    |  
|Pumped storage consumption            |                           |                 | (9,369  | )                   |                |  |              |        |   |  |   |    
|Net imports                           |                           |                 | 49,155  |                     |                |  |              |        |   |  | 15 | %  
|                                      |                           |                 |         |                     |                |  |               |        |  
|                                      | Total demand in Italy     |                 |         | 329,441             |                |  |               |       |   |  |    | 100 | %
|                                      |                           |                 |         |                     |                |  |               |        |  

48



---



##### Table of Contents








|        |                                                                                                                            
|------- | ---------------------------------------------------------------------------------------------------------------------------
|Source: | Enel elaboration based on provisional data for Italy from Terna,
    and publicly available information of other producers.



|  |                                   
|- | ----------------------------------
|* | Excluding stakes in former Gencos.



|                                        |                                       |      |      |      |      |  |      |      | 
|--------------------------------------- | ------------------------------------- | ---- | ---- | ---- | ---- |  | ---- | ---- | 
|Net Installed Capacity (GW) by Producer |                                       | 2004 |      |      | 2005 | 
|                                        |                                       |      |      |      |      | 
|Enel                                    |                                       |      | 42.0 |      |      |  | 42.2 |     
|Former Gencos                           |                                       |      | 17.5 |      |      |  | 18.2 |     
|Eni                                     |                                       |      | 3.6  |      |      |  | 4.7  |     
|Edison*                                 |                                       |      | 5.7  |      |      |  | 6.9  |     
|Main municipal electricity companies*   |                                       |      | 2.8  |      |      |  | 4.0  |     
|Other independent power producers       |                                       |      | 9.8  |      |      |  | 10.7 |     
|                                        |                                       |      |      |      |      | 
|                                        | Total net installed capacity in Italy |      |      | 81.5 |      |  |      | 86.8 | 
|                                        |                                       |      |      |      |      | 








|  |                                   
|- | ----------------------------------
|* | Excluding stakes in former Gencos.



Electricity sales on the free market.


Gas sales.









| |                                               
| | ----------------------------------------------
| | Seasonality of Electricity and Gas Consumption








| |                        
| | -----------------------
| | Discontinued Operations



49



---



##### Table of Contents





| |                   
| | ------------------
| | Telecommunications



   




| |             
| | ------------
| | Transmission










| |                              
| | -----------------------------
| | Services and Other Activities





50



---



##### Table of Contents





| |         
| | --------
| | Services







| |   |                                                                                                                                    
| | - | -----------------------------------------------------------------------------------------------------------------------------------
| |  | supporting Enel Distribuzione in completing the roll-out of the
    Telemanagement system for remote metering; and                 
|
| |  | developing a disaster recovery system to enhance the stability
    and performance of critical information technology applications.

 




| |                             
| | ----------------------------
| | Engineering and Construction





 




| |                               
| | ------------------------------
| | Real Estate and Other Services

 







| |          
| | ---------
| | Factoring




51



---



##### Table of Contents





| |                               
| | ------------------------------
| | Professional Training Services





| |      
| | -----
| | Water









| |                           
| | --------------------------
| | Capital Investment Program



|                                   |       |                 |       |        |      |  |        |        | 
|---------------------------------- | ----- | --------------- | ----- | ------ | ---- |  | ------ | ------ | 
|                                   |       | 2004            |       |        | 2005 | 
|                                   |       |                 |       |        |      | 
|                                   |       | (In millions of |      
|                                   |       | euro)           |      
|Generation and Energy Management   |       |                 | 857  |        |      |  | 1,027 |       
|Sales, Infrastructure and Networks |       |                 | 1,711 |        |      |  | 1,692  |       
|Transmission                       |       |                 | 277   |        |      |  | 141    |       
|Telecommunications                 |       |                 | 867   |        |      |  | 287    |       
|Corporate and Others(1)            |       |                 | 122   |        |      |  | 110    |       
|                                   |       |                 |       |        |      | 
|                                   | Total |                 |       | 3,834 |      |  |        | 3,257 | 
|                                   |       |                 |       |        |      | 






|    |                                                                                                      
|--- | -----------------------------------------------------------------------------------------------------
|(1) | In 2004 we did not incur capital expenditures with respect to
    activities of our Corporate sector.

   




|                                   |       |                 |       |        |      |  |        |        | 
|---------------------------------- | ----- | --------------- | ----- | ------ | ---- |  | ------ | ------ | 
|                                   |       | 2004            |       |        | 2005 | 
|                                   |       |                 |       |        |      | 
|                                   |       | (In millions of |      
|                                   |       | euro)           |      
|Generation and Energy Management   |       |                 | 842  |        |      |  | 1,003 |       
|Sales, Infrastructure and Networks |       |                 | 1,632 |        |      |  | 1,574  |       
|Transmission                       |       |                 | 277   |        |      |  | 139    |       
|Telecommunications                 |       |                 | 680   |        |      |  | 251    |       
|Corporate and Others(1)            |       |                 | 87    |        |      |  | 70     |       
|                                   |       |                 |       |        |      | 
|                                   | Total |                 |       | 3,518 |      |  |        | 3,037 | 
|                                   |       |                 |       |        |      | 






|    |                                                                                                          
|--- | ---------------------------------------------------------------------------------------------------------
|(1) | In 2004 we have not incurred capital expenditures with respect
    to activities of our Corporate sector.

52



---



##### Table of Contents



  






| |                                 
| | --------------------------------
| | Generation and Energy Management

     




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | In Italy, the ongoing process of conversion of our approximately
    1,900 MW oil-fired plant at Torrevaldaliga North to clean
    coal technology, on which we spent approximately
    159 million
    during the year, and of construction of fluidized bed combustion
    facilities at a section of our power plant at Sulcis with
    approximately 300 MW of net installed capacity, on which we
    spent approximately
    54 million.
    We also continued implementing our strategic plan to increase
    investment in renewable generation facilities (wind,
    hydroelectric, geothermal), spending approximately
    280 million
    in 2005. Of this amount, we spent
    133 million
    on capital improvements that we expect will allow us to comply
    with regulations requiring us to provide a specified amount of
    green certificates each year; and
|
| |  | In our international operations, the development of Uniòn
    Fenosas generation facilities (approximately
    111 million),
    the improvement of Enel Viesgo Generatiòns plants
    (approximately
    51 million,
    of which we invested
    32 million
    in new projects), the Maritza East IIIs ongoing plant
    refurbishment project (approximately
    45 million),
    Enel Latin Americas new projects (approximately
    12 million),
    as well as regular maintenance and other minor expenditures to
    improve the capacity, efficiency and productivity of plants in
    North America (approximately
    5 million).                                                                                                                                                                                                                                 

 




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | For CCGT conversions, we have completed the conversion of
    approximately 4,300 MW and plan to continue the CCGT
    conversion program, with the most significant projects at our
    Santa Barbara and Termini Imerese power plants (for
    approximately 750 MW); and                                                                                                                                                                        
|
| |  | For coal conversions, we plan to continue the conversions of our
    thermal generation plants at Torrevaldaliga North, finish our
    trial phase in Sulcis, and begin similar conversions of certain
    other power generation units, expected to affect in the
    aggregate approximately 4,100 MW of net installed capacity.
    The conversion plans for approximately 1,900 MW of this
    amount are still subject to regulatory approval.




Capital Expenditures for the International Division
in the 2006-2010 period




| |                                   
| | ----------------------------------
| | Sales, Infrastructure and Networks




53



---



##### Table of Contents



    


      




 


Capital Expenditures for the International Division
in the 2006-2010 period




| |                              
| | -----------------------------
| | Services and Other Activities

 




| |                                    
| | -----------------------------------
| | Transmission and Telecommunications

   




| |                                                                                
| | -------------------------------------------------------------------------------
| | Capital Expenditures for the International Division in the
    2006-2010 period

  


International generation operations. 


54



---



##### Table of Contents



    


International distribution and sales operations.  





Regulatory Matters





Overview of Regulation in the Energy Sector in Italy










| |   |                                                                                                                                                                                             
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | setting and adjusting tariffs on the basis of general criteria
    established by law;                                                                                                      
|
| |  | advising the Ministry of Productive Activities on the
    structuring and administration of licensing and authorization
    regimes for the energy sector;                                  
|
| |  | ensuring the quality of services provided to customers;                                                                                                                                     
|
| |  | overseeing the separation of utility companies into distinct
    units for accounting and management purposes;                                                                              
|
| |  | promoting competition; and                                                                                                                                                                  
|
| |  | otherwise protecting the interests of consumers, including the
    authority to mediate disputes between utilities and consumers,
    and to impose sanctions for violations of regulations.






Electricity Regulation








| |   |                                                                                                                                                                                                                                                                                                                                
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | liberalized, as of April 1, 1999, the generation, import
    and export of electricity;                                                                                                                                                                                                                                        
|
| |  | provided that consumers, or Eligible Customers, meeting certain
    consumption thresholds, which have been progressively reduced,
    may negotiate supply agreements directly with any domestic or
    foreign producer, wholesaler or distributor of electricity,
    while other, Non-Eligible Customers must continue to

55



---



##### Table of Contents



| |   |                                                                                                                                                                                                                                                                                                          
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   | purchase electricity from the distributor serving the area in
    which they are located and pay regulated prices determined by
    the Energy Authority;                                                                                                                                                
|
| |  | provided that after January 1, 2003, no electricity company
    may produce or import more than 50% of the total of imported and
    domestically produced electricity in Italy, which limit resulted
    in our sale of the Gencos;                                                                     
|
| |  | provided for the establishment of the Single Buyer, a central
    purchaser of electricity from producers on behalf of all
    Non-Eligible Customers;                                                                                                                                                   
|
| |  | provided for the creation of the Italian power exchange, a
    virtual marketplace in which producers, importers, wholesalers,
    the GRTN, other Eligible Customers and the Single Buyer buy and
    sell electricity at prices determined through a competitive
    bidding process;                  
|
| |  | provided for the creation of a Market Operator to manage the
    Italian power exchange;                                                                                                                                                                                                                 
|
| |  | provided for the separation of management and operation of the
    national electricity transmission grid, which was to be licensed
    to an independent transmission system operator, the GRTN, from
    ownership of the grid assets, which were retained by existing
    owners, primarily Terna; and
|
| |  | established a new licensing regime for electricity distribution
    and provided incentives for the consolidation of electricity
    distribution networks within each municipality.                                                                                                                     









56



---



##### Table of Contents











| |                                    
| | -----------------------------------
| | Eligible and Non-Eligible Customers













57



---



##### Table of Contents





| |                 
| | ----------------
| | The Single Buyer

















| |                           
| | --------------------------
| | The Italian Power Exchange



58



---



##### Table of Contents

















59



---



##### Table of Contents











| |        
| | -------
| | Imports











60



---



##### Table of Contents







| |                                          
| | -----------------------------------------
| | Incentives to Provide Generation Capacity







| |                      
| | ---------------------
| | New Generation Plants







| |             
| | ------------
| | Transmission







| |                            
| | ---------------------------
| | Distribution of Electricity







61



---



##### Table of Contents











| |                     
| | --------------------
| | The Tariff Structure









| |   |                                                                                                                                                                                                                                                                                                                                                                      
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Operating costs of generation (for electricity prices on the
    regulated market), transmission and distribution activities,
    including procurement costs, and amortization and depreciation.
    In order for operators to be able to recover particular costs,
    the costs must be both actually incurred by them and recognized
    by the Energy Authority;
|
| |  | An appropriate return on invested capital, including both equity
    and debt financing; and                                                                                                                                                                                                                                                                         
|
| |  | The costs associated with system charges.                                                                                                                                                                                                                                                                                                                            









62



---



##### Table of Contents





 






| |   |                                                        
| | - | -------------------------------------------------------
| |  | low-voltage domestic consumers (residential customers);
|
| |  | low-voltage public lighting;                           
|
| |  | other low-voltage end users;                           
|
| |  | medium-voltage public lighting;                        
|
| |  | other medium-voltage end users; and                    
|
| |  | high-voltage end users.                                





| |                                            
| | -------------------------------------------
| | Generation Component of Electricity Tariffs







| |   |                                                                                                                                                                                                                                                     
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Hydroelectric or geothermal generation, since these plants do
    not incur fuel costs; and                                                                                                                                                         
|
| |  | The resale of electricity imported under long-term contracts in
    effect as of the date of the entry into force of the first
    Electricity Directive on February 19, 1997, which was
    frequently cheaper than electricity generated in Italy.





63



---



##### Table of Contents












| |                                         
| | ----------------------------------------
| | Transmission and Distribution Components











64



---



##### Table of Contents









| |                                 
| | --------------------------------
| | System Charges and Other Charges





| |   |                                                                                                                      
| | - | ---------------------------------------------------------------------------------------------------------------------
| |  | Charges concerning the electricity system, established by the
    Ministry of Productive Activities, that consist of:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                     
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | a nuclear surcharge, covering part of the costs incurred by
    So.g.i.n., the company to which we transferred our discontinued
    Italian nuclear operations, in connection with the dismantling
    of nuclear plants and decommissioning of nuclear fuels; this
    surcharge is designed to cover substantially all of such costs
    when added to the funds that we transferred to So.g.i.n.;
|
| |  | a surcharge that benefits producers from renewable resources;                                                                                                                                                                                                                                                                                                                                       
|
| |  | special surcharges covering the cost of supplying electricity at
    mandated discounts to certain customers (primarily the Italian
    state-owned railway company and Acciai Speciali Terni S.p.A.,
    both of which transferred electricity assets to us as part of
    the nationalization of the Italian electricity industry in 1962);                                                       
|
| |  | research and development surcharges, covering related
    costs; and                                                                                                                                                                                                                                                                                                                                
|
| |  | certain stranded costs that have not yet been recovered. Please
    see  Stranded Costs below for a
    discussion of these costs.                                                                                                                                                                                                                                                               



| |   |                                                                                                                                                                                                                                                                                                                
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Other general interest charges established by the Energy
    Authority to adjust or refine the operation of the tariff
    mechanism, which include adjustments to cover potential
    differences between distributors costs as recognized under
    the current tariff structure and actual tariff revenues.
|
| |  | Incentives for the enhancement of the quality of service.                                                                                                                                                                                                                                                      
|
| |  | Charges recovered through upward adjustments to the price caps,
    as established by the Energy Authority, which cover:                                                                                                                                                                                       



| |   |                                                                                                                                                                                    
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | costs deriving from unforeseeable events, changes in the
    regulatory framework or new obligations for universal service;                                                        
|
| |  | costs deriving from demand-side management initiatives intended
    to promote a more efficient use of resources by electricity
    customers, including information campaigns; and
|
| |  | additional recognized costs incurred in connection with the
    offer of value-added services on top of basic options.                                                             

65



---



##### Table of Contents



Cassa Conguaglio per il Settore Elettrico,




| |               
| | --------------
| | Stranded Costs





| |   |                                                                                                                              
| | - | -----------------------------------------------------------------------------------------------------------------------------
| |  | undertook for reasons of public policy;                                                                                      
|
| |  | undertook at a time when the electricity markets were not yet
    open to competition; and                                   
|
| |  | could have been recovered in a monopoly regime but cannot be
    recovered under a regime of competitive electricity pricing.





| |   |                                                                                                                            
| | - | ---------------------------------------------------------------------------------------------------------------------------
| |  | they minimize the impact of those costs (and, hence, the amount
    of the refund) on their future operations; and         
|
| |  | they submit an industrial plan demonstrating the long-term
    profitability of the activity related to the stranded costs.



   







| |                                             
| | --------------------------------------------
| | Continuity and Quality of Service Regulation



66



---



##### Table of Contents














| |                                 
| | --------------------------------
| | Promotion of Renewable Resources

Comitato Interministeriale Prezzi








67



---



##### Table of Contents







| |                    
| | -------------------
| | Hydroelectric Power











| |      
| | -----
| | Taxes





| |   |                                                                                                                                                               
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | A state tax for residential uses (of
    0.0047/kWh) and
    for other uses (of
    0.0031/kWh
    excluding users with consumption over 1.2 GWh per month);
|
| |  | Additional local taxes that vary from
    0.0093/kWh up to
    a maximum of
    0.0204/kWh; and                                                             
|
| |  | Value-added tax of 20% for all users with the exception of
    residential and industrial customers (who are taxed at a rate of
    10%).                     

68



---



##### Table of Contents






Gas Regulation






| |                                        
| | ---------------------------------------
| | Gas Eligible and Non-Eligible Customers





| |                      
| | ---------------------
| | Transport and Storage







| |                             
| | ----------------------------
| | Distribution and Sale of Gas







| |                                        
| | ---------------------------------------
| | Restrictions on Sale and Imports of Gas



69



---



##### Table of Contents





| |                                    
| | -----------------------------------
| | Rules Governing Distribution of Gas







| |                                                                          
| | -------------------------------------------------------------------------
| | Distribution Tariffs and Sales Tariffs for Gas Non-Eligible
    Customers











70



---



##### Table of Contents









| |              
| | -------------
| | Gas Emergency






Environmental Matters






2 x 2




| |                       
| | ----------------------
| | Electromagnetic Fields







71



---



##### Table of Contents









| |                  
| | -----------------
| | CO2
    Emissions

2


2


2


2 2


 




2


72



---



##### Table of Contents



2 2


2








| |   |                                                                                                                                                                                                                                                                                             
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Switching fuel;                                                                                                                                                                                                                                                                             
|
| |  | Converting existing oil-fired thermal power plants into
    gas-fired or high-efficiency coal-fired plants;                                                                                                                                                                                 
|
| |  | Increasing renewable energy capacity; and                                                                                                                                                                                                                                                   
|
| |  | Sourcing
    CO2
    credits through the development of Clean Development Mechanism
    (CDM) and Joint Implemetation (JI) projects in the
    energy sector (in particular geothermal), investing in carbon
    funds and purchasing emission reductions through bilateral
    contracting.



| |                                     
| | ------------------------------------
| | SO2,
    NOx
    and Other Emissions

2 2


5-year


2 3 2


73



---



##### Table of Contents









2


Reductions of
SO2 emissions against 2000 levels


|     |  |                |     |            |        |  |     |  
|---- |  | -------------- | --- | ---------- | ------ |  | --- | -
|     |  |                |     | Percentage |       
|Year |  | Metric Tons    |     |            | Change | 
|     |  |                |     |            |        | 
|     |  | (In thousands) |     |            |       
|2001 |  |                | 213 |            |        |  | (11 | )
|2002 |  |                | 187 |            |        |  | (21 | )
|2003 |  |                | 101 |            |        |  | (58 | )
|2004 |  |                | 94  |            |        |  | (61 | )
|2005 |  |                | 73  |            |        |  | (69 | )

Reductions of
NOx emissions against 2000 levels


|     |  |                |    |            |        |  |     |  
|---- |  | -------------- | -- | ---------- | ------ |  | --- | -
|     |  |                |    | Percentage |       
|Year |  | Metric Tons    |    |            | Change | 
|     |  |                |    |            |        | 
|     |  | (In thousands) |    |            |       
|2001 |  |                | 71 |            |        |  | (8  | )
|2002 |  |                | 71 |            |        |  | (9  | )
|2003 |  |                | 62 |            |        |  | (20 | )
|2004 |  |                | 56 |            |        |  | (28 | )
|2005 |  |                | 49 |            |        |  | (37 | )

2   


74



---



##### Table of Contents





| |                  
| | -----------------
| | PCBs and Asbestos





| |   |                                                                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------
| |  | electric transformers and other equipment which contains PCBs
    above 500 parts per million must be decommissioned or
    decontaminated by 2009;
|
| |  | equipment which contains PCBs below the limit set out above can
    be used until the end of its operational life; and                             
|
| |  | equipment which has been contaminated by PCBs spillage must be
    decommissioned by 2005.                                                         



clean-up




| |                           
| | --------------------------
| | Water Pollution Prevention







| |                       
| | ----------------------
| | Solid Waste Management





| |               
| | --------------
| | Site Clearance

 


75



---



##### Table of Contents





| |                     
| | --------------------
| | Landscape Safeguards





| |   |                                                                                                                                                                                  
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | re-using routes of previous power lines wherever possible;                                                                                                                       
|
| |  | using towers for high voltage lines whose design is aimed at
    reducing the environmental and aesthetic impact in non-urban
    areas of particular landscape value;           
|
| |  | acting to reduce the impact of lines in environmentally
    sensitive or protected areas;                                                                                        
|
| |  | increasing use of underground cables in urban areas where
    possible;                                                                                                          
|
| |  | for medium-voltage lines, placing underground cables in urban
    areas and aerial cables with low environmental impact in other
    areas with specific environmental value; and
|
| |  | using aerial insulated cables or underground cables in low
    voltage networks (at present, we have built approximately
    two-thirds of our network in this way).             







| |                                                                   
| | ------------------------------------------------------------------
| | Environmental Registrations, Certifications and
    Authorizations









| |                   
| | ------------------
| | Cost of Compliance



   


76



---



##### Table of Contents








| |                                
| | -------------------------------
| | Discontinued Nuclear Operations













| |                  
| | -----------------
| | Nuclear Liability






77



---



##### Table of Contents





  20-year







Property, Plants and Equipment












|         |                          
|-------- | -------------------------
|ITEM 4A. | UNRESOLVED STAFF COMMENTS








|        |                                             
|------- | --------------------------------------------
|ITEM 5. | OPERATING AND FINANCIAL REVIEW AND PROSPECTS




Summary of Results




78



---



##### Table of Contents







                    


   





The Electricity Market Regulatory Framework




| |         
| | --------
| | Overview









79



---



##### Table of Contents









| |                   
| | ------------------
| | Tariffs and Prices









| |   |                                                                                                       
| | - | ------------------------------------------------------------------------------------------------------
| |  | a generation cost component, reflecting fuel
    costs; and                                         
|
| |  | the application of global price-cap reductions to transmission
    and distribution transport charges.









| |                      
| | ---------------------
| | Macroeconomic Factors







80



---



##### Table of Contents







| |                             
| | ----------------------------
| | Critical Accounting Policies



Use of estimates.


Revenue Recognition.


Pension and other post-retirement benefits.


Recoverability of long-lived assets.


81



---



##### Table of Contents





Realization of deferred tax assets.


Litigation.


Allowance for doubtful accounts.




| |                             
| | ----------------------------
| | Comparability of Information





| |                                  
| | ---------------------------------
| | Regulatory and Other Developments





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Start of operation of the Italian power exchange and the
    Single Buyer. On April 1, 2004, the Italian power
    exchange for the spot trading of electricity started operations
    and the Single Buyer became responsible for purchasing all of
    the electricity to be supplied to the regulated market. Please
    see Item 4. Information on the Company 
    Regulatory Matters  Electricity Regulation for
    a detailed discussion of the Italian power exchange, the Single
    Buyer and related developments in the Italian electricity
    market. As a result of this development, since April 1,
    2004, our Generation and Energy Management segment sells the
    electricity it produces that is destined for the regulated
    market to the Single Buyer, and our Sales, Infrastructure and
    Networks segment purchases the electricity that it distributes
    on the regulated market from the Single Buyer. These sales and
    purchases are recorded as operating revenues and operating
    expenses, respectively. Before April 1, 2004, our
    Generation and Energy Management segment sold electricity for
    distribution on the regulated market directly to our Sales,
    Infrastructure and Networks segment, and the revenues and costs
    arising from these sales were eliminated from, and therefore not
    recorded in, our consolidated financial statements. As a result,
    both our operating revenues and operating expenses have
    increased substantially on a consolidated basis since
    April 1, 2004. Sales to the Single

82



---



##### Table of Contents



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   | Buyer are now included in the line item Sales to
    regulatory entities, sales on the free market and sales on
    foreign markets in the results presented below. For prior
    periods, this line item was referred to as Sales to
    Eligible Customers, sales to the GRTN and sales on foreign
    markets, as the Single Buyer was not fully operational.
    Purchases from the Single Buyer are recorded in the operating
    expense line item Purchased Power.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| |  | Capacity payments. In order to address a current deficit
    in Italian generation capacity relative to rising electricity
    demand, the regulatory framework provides incentives to power
    generators both to build new capacity as well as to maintain
    their existing plants in good working order and available to
    cover sudden variations in electricity demand. Effective
    March 1, 2004, the Energy Authority established a
    provisional system of payments to remunerate producers that make
    generation capacity available to the electricity system at times
    of peak demand, known as capacity payments. Capacity
    payments to a given producer comprise both an amount due for
    capacity available on critical days (set by the GRTN
    and now by Terna) and a further amount payable when pool market
    prices fall below specified thresholds, as an extra incentive.
    This provisional system has been in place from March 2004 and
    during all of 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| |  | August 2004 decree on stranded costs. Stranded costs are
    current costs deriving from contractual commitments or
    investment decisions that electricity companies undertook for
    reasons of public policy, at a time when the electricity markets
    were not yet open to competition, and could have been recovered
    in a monopoly regime but cannot be recovered under a regime of
    competitive electricity pricing. Please see Item 4.
    Information on the Company  Regulatory
    Matters  Electricity Regulation for more
    information on stranded costs. In August 2004, the MEF and the
    Ministry of Productive Activities issued a joint decree that
    determined the overall amount of stranded costs we are entitled
    to recover. On December 1, 2004, following the European
    Commissions approval of the decree, we became entitled to
    recover approximately
    513 million
    on account of stranded costs related to our generation plants
    for the period 2000-2003, as well as our stranded costs related
    to the Nigerian LNG contract, which were determined to be
    555 million
    in respect of the 2000-2003 period and approximately
    910 million
    in respect of the 2004-2009 period
    (151 million
    of which related to 2004). As a result, in 2004 we recorded as
    other revenues a total of
    1,219 million
    arising in connection with stranded costs, the amount we became
    entitled to receive in respect of 2004 and prior years under the
    August 2004 decree. Of this total, the
    513 million
    related to our generation plants and the
    151 million
    related to the Nigerian LNG contract for 2004 were recorded by
    our Generation and Energy Management segment, and the
    555 million
    related to the Nigerian LNG contract in respect of the 2000-2003
    period were recorded by our Corporate segment. In 2005, our
    Generation and Management segment recorded
    158 million
    for stranded costs related to our Nigerian LNG contract. In
    2005, we received payments amounting to
    361 million
    for stranded costs accounted in 2004. We have yet to receive any
    other amount in this regard.
|
| |  | Increased estimates of the useful lives of certain generation
    assets. Effective January 1, 2005, following an
    independent appraisal, we increased our estimates of the useful
    lives of certain assets related to power generation plants. As a
    consequence, the amount of depreciation expense we recorded in
    2005 with respect to these assets was lower than the amount
    recorded for the same assets in 2004 by
    100 million.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               



| |                                  
| | ---------------------------------
| | Changes in Scope of Consolidation





| |   |                                                                                                                                                                                                                                                             
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the disposal of a controlling stake in Terna as of
    September 15, 2005;                                                                                                                                                                                  
|
| |  | the disposal of a controlling stake in Wind as of
    August 11, 2005;                                                                                                                                                                                      
|
| |  | the acquisition of Enel Electrica Banat and Enel Electrica
    Dobrogea as of April 28, 2005;                                                                                                                                                               
|
| |  | the acquisition of Italgestioni and Italgestioni Gas (together,
    the Italgestioni Group), which are companies active
    in the distribution and sale of natural gas to end users in the
    provinces of Calabria and Naples, as of December 14, 2004;

83



---



##### Table of Contents





| |   |                                                                                                                                                                                                                                                      
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the acquisition of Ottogas Rete and Ottogas Vendita (together,
    the Ottogas Group), which are companies active in
    the distribution and sale of natural gas to end users in the
    area of Naples and Salerno, as of September 15, 2004; and
|
| |  | the disposal of NewReal (a real estate company) as of
    July 14, 2004.                                                                                                                                                                             



| |                  
| | -----------------
| | Business Segments





Generation and Energy Management.


Sales, Infrastructure and Networks.


84



---



##### Table of Contents





Corporate.


Services and Other Activities.


Discontinued Operations.





Outlook








85



---



##### Table of Contents














| |             
| | ------------
| | Sale of Wind






86



---



##### Table of Contents






Analysis of Operating Results




|                                                                            |                               |              |       |       |      |  |       |       |  
|--------------------------------------------------------------------------- | ----------------------------- | ------------ | ----- | ----- | ---- |  | ----- | ----- | -
|                                                                            |                               | Year Ended   |      
|                                                                            |                               | December 31, |      
|                                                                            |                               |              |      
|                                                                            |                               | 2004         |       |       | 2005 | 
|                                                                            |                               |              |       |       |      | 
|Operating revenues                                                          |                               |              | 100.0 | %     |      |  | 100.0 | %    
|Operating expenses                                                          |                               |              |       |       |      |  |       |      
|                                                                            | Personnel                     |              |       | (10.4 | )    |  |       | (8.1  | )
|                                                                            | Fuel for thermal generation   |              |       | (11.6 | )    |  |       | (11.5 | )
|                                                                            | Purchased power               |              |       | (33.5 | )    |  |       | (42.0 | )
|                                                                            | Depreciation and amortization |              |       | (7.1  | )    |  |       | (6.5  | )
|                                                                            | Other operating expenses      |              |       | (18.5 | )    |  |       | (15.6 | )
|                                                                            |                               |              |       |       |      | 
|Total operating expenses                                                    |                               |              | (81.1 | )     |      |  | (83.7 | )    
|                                                                            |                               |              |       |       |      | 
|Operating income                                                            |                               |              | 18.9  |       |      |  | 16.3  |      
|Financial income (expense) and income (expense) from investments            |                               |              | (2.7  | )     |      |  | (2.1  | )    
|Income (expense) from investments accounted for using the equity
    method |                               |              | (0.1  | )     |      |  | (0.1  | )    
|Income before taxes                                                         |                               |              | 16.1  |       |      |  | 14.1  |      
|                                                                            |                               |              |       |       |      | 
|Income taxes                                                                |                               |              | (6.8  | )     |      |  | (5.7  | )    
|                                                                            |                               |              |       |       |      | 
|Income from continuing operations                                           |                               |              | 9.3   |       |      |  | 8.4   |      
|Income from discontinued operations                                         |                               |              | (0.5  | )     |      |  | 3.7   |      
|Income (before minority interests)                                          |                               |              | 8.8   |       |      |  | 12.1  |      
|Net Income                                                                  |                               |              | 8.5   | %     |      |  | 11.4  | %    





|                                       |  |              |       |    |      |  |      |  
|-------------------------------------- |  | ------------ | ----- | -- | ---- |  | ---- | -
|                                       |  | Year Ended   |      
|                                       |  | December 31, |      
|                                       |  |              |      
|                                       |  | 2004         |       |    | 2005 | 
|                                       |  |              |       |    |      | 
|Operating revenues                     |  |              | 17.5  | %  |      |  | 9.6  | %
|Operating expenses                     |  |              | (21.1 | )  |      |  | (7.9 | )
|Operating income (loss)                |  |              | (3.6  | )  |      |  | 1.7  |  
|Net financial expense                  |  |              | (1.5  | )  |      |  | (0.7 | )
|Income taxes                           |  |              | 2.0   |    |      |  | 0.6  |  
|Net income (loss) before capital gains |  |              | (3.1  | )  |      |  | 0.4  |  
|Gains on disposal of assets            |  |              | 2.6   |    |      |  | 3.3  |  
|Income from discontinued operations    |  |              | (0.5  | )% |      |  | 3.7  | %



87



---



##### Table of Contents






2005 Compared with 2004






| |                   
| | ------------------
| | Operating Revenues



|                                                                          |                                                                                                                 |                 |        |        |      |  |        |        | 
|------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------- | --------------- | ------ | ------ | ---- |  | ------ | ------ | 
|                                                                          |                                                                                                                 | Year Ended      |       
|                                                                          |                                                                                                                 | December 31,    |       
|                                                                          |                                                                                                                 |                 |       
|                                                                          |                                                                                                                 | 2004            |        |        | 2005 | 
|                                                                          |                                                                                                                 |                 |        |        |      | 
|                                                                          |                                                                                                                 | (In millions of |       
|                                                                          |                                                                                                                 | euro)           |       
|Electricity sales:                                                        |                                                                                                                 |                 |        |        |      |  |        |       
|                                                                          | Tariff revenues from sales on the regulated market and transport
    of electricity on our distribution network |                 |        | 15,305 |      |  |        | 15,347 | 
|                                                                          | Sales to regulatory entities, sales on the free market and sales
    on foreign markets(1)                      |                 |        | 9,776  |      |  |        | 13,548 | 
|                                                                          | Equalization Fund contributions                                                                                 |                 |        | 17     |      |  |        | 113    | 
|                                                                          |                                                                                                                 |                 |        |        |      | 
|Total revenues from electricity sales                                     |                                                                                                                 |                 | 25,098 |        |      |  | 29,008 |       
|                                                                          |                                                                                                                 |                 |        |        |      | 
|Gas sales to end users                                                    |                                                                                                                 |                 | 1,374  |        |      |  | 1,556  |       
|Fees for customer connections, inspections and repositioning
    services |                                                                                                                 |                 | 657    |        |      |  | 656    |       
|Other revenues(2)                                                         |                                                                                                                 |                 | 3,882  |        |      |  | 2,839  |       
|                                                                          |                                                                                                                 |                 |        |        |      | 
|                                                                          | Total operating revenues                                                                                        |                 |        | 31,011 |      |  |        | 34,059 | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Sales to regulatory entities includes sales to
    Terna, the Single Buyer (since April 1, 2004) and the
    Market Operator. While sales to third-party resellers of
    electricity on the free market are included in Sales on
    the free market, this line item does not include revenues
    from sales to resellers purchasing electricity for distribution
    on the regulated market. Since April 1, 2004, these
    resellers have been required to purchase electricity directly
    from the Single Buyer. Revenues received prior to that date from
    resellers purchasing electricity for distribution on the
    regulated market were recorded in the line item Tariff
    revenues from sales on the regulated market and transport of
    electricity on our distribution network.
|   
|(2) | Other revenues mainly includes our revenues from
    sales of fuel (including natural gas) to third parties,
    engineering and contracting activities, and non-recurring items
    such as reversals of provisions, bonus payments and
    reimbursements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

   




| |                  
| | -----------------
| | Electricity sales

         


88



---



##### Table of Contents



      





 




| |                       
| | ----------------------
| | Gas sales to end users






| |                                                                          
| | -------------------------------------------------------------------------
| | Fees for customer connections, inspections and repositioning
    services






| |               
| | --------------
| | Other revenues

      




89



---



##### Table of Contents





|                                   |                                                     |                 |        |        |      |   |        |        | 
|---------------------------------- | --------------------------------------------------- | --------------- | ------ | ------ | ---- | - | ------ | ------ | 
|                                   |                                                     | Year Ended      |       
|                                   |                                                     | December 31,    |       
|                                   |                                                     |                 |       
|                                   |                                                     | 2004            |        |        | 2005 |  
|                                   |                                                     |                 |        |        |      |  
|                                   |                                                     | (In millions of |       
|                                   |                                                     | euro)           |       
|Generation and Energy Management   |                                                     |                | 13,028 |        |      |  | 14,215 |       
|Sales, Infrastructure and Networks |                                                     |                 | 19,254 |        |      |   | 20,422 |       
|Corporate                          |                                                     |                 | 1,649  |        |      |   | 1,103  |       
|Services and Other Activities      |                                                     |                 | 1,794  |        |      |   | 1,660  |       
|Eliminations                       |                                                     |                 | (4,714 | )      |      |   | (3,341 | )     
|                                   |                                                     |                 |        |        |      |  
|                                   | Total operating revenues from continuing operations |                 |       | 31,011 |      |   |       | 34,059 | 



| |                                 
| | --------------------------------
| | Generation and Energy Management

      


        


  




| |                                   
| | ----------------------------------
| | Sales, Infrastructure and Networks

       


90



---



##### Table of Contents






      


  


 




| |          
| | ---------
| | Corporate

 




| |                              
| | -----------------------------
| | Services and Other Activities

     


  




| |             
| | ------------
| | Eliminations




91



---



##### Table of Contents







| |                   
| | ------------------
| | Operating Expenses



|                          |                                                  |                 |        |        |      |   |        |        |  
|------------------------- | ------------------------------------------------ | --------------- | ------ | ------ | ---- | - | ------ | ------ | -
|                          |                                                  | Year Ended      |       
|                          |                                                  | December 31,    |       
|                          |                                                  |                 |       
|                          |                                                  | 2004            |        |        | 2005 |  
|                          |                                                  |                 |        |        |      |  
|                          |                                                  | (In millions of |       
|                          |                                                  | euro)           |       
|Operating expenses:       |                                                  |                 |        |        |      |   |        |       
|                          | Personnel                                        |                 |       | 3,224  |      |   |       | 2,762  |  
|                          | Fuel for thermal generation                      |                 |        | 3,598  |      |   |        | 3,910  |  
|                          | Fuel for trading and gas for resale to end users |                 |        | 1,795  |      |   |        | 1,604  |  
|                          | Purchased power                                  |                 |        | 10,380 |      |   |        | 14,321 |  
|Other operating expenses: |                                                  |                 |        |        |      |   |        |       
|                          | Services and rentals                             |                 |        | 3,106  |      |   |        | 3,057  |  
|                          | Materials and supplies                           |                 |        | 1,027  |      |   |        | 798    |  
|                          | Other                                            |                 |        | 783    |      |   |        | 911    |  
|                          | Capitalized expenses                             |                 |        | (973   | )    |   |        | (1,049 | )
|                          |                                                  |                 |        |        |      |  
|Total                     |                                                  |                | 22,940 |        |      |  | 26,314 |       

        




| |          
| | ---------
| | Personnel

 




| |                            
| | ---------------------------
| | Fuel for thermal generation






| |                                                 
| | ------------------------------------------------
| | Fuel for trading and gas for resale to end users

  


92



---



##### Table of Contents





| |                
| | ---------------
| | Purchased power






| |                     
| | --------------------
| | Services and rentals

     




| |                       
| | ----------------------
| | Materials and supplies

 




| |            
| | -----------
| | Other costs

  2 2 2




| |                     
| | --------------------
| | Capitalized expenses






|                                   |  |                 |        |   |      |   |        |  
|---------------------------------- |  | --------------- | ------ | - | ---- | - | ------ | -
|                                   |  | Year Ended      |       
|                                   |  | December 31,    |       
|                                   |  |                 |       
|                                   |  | 2004            |        |   | 2005 |  
|                                   |  |                 |        |   |      |  
|                                   |  | (In millions of |       
|                                   |  | euro)           |       
|Generation and Energy Management   |  |                | 9,248  |   |      |   | 10,511 |  
|Sales, Infrastructure and Networks |  |                 | 15,724 |   |      |   | 16,685 |  
|Corporate                          |  |                 | 997    |   |      |   | 1,036  |  
|Services and Other Activities      |  |                 | 1,580  |   |      |   | 1,411  |  
|Eliminations                       |  |                 | (4,609 | ) |      |   | (3,329 | )
|                                   |  |                 |        |   |      |  
|Total                              |  |                | 22,940 |   |      |  | 26,314 |  



| |                                 
| | --------------------------------
| | Generation and Energy Management




93



---



##### Table of Contents



     


  2  


   2




| |                                   
| | ----------------------------------
| | Sales, Infrastructure and Networks

        


   


  


 




| |          
| | ---------
| | Corporate

   


94



---



##### Table of Contents





| |                              
| | -----------------------------
| | Services and Other Activities

     




| |             
| | ------------
| | Eliminations






| |                                          
| | -----------------------------------------
| | Depreciation, Amortization and Impairment



|                                   |  |                 |       |  |      |  |       | 
|---------------------------------- |  | --------------- | ----- |  | ---- |  | ----- | 
|                                   |  | Year Ended      |      
|                                   |  | December 31,    |      
|                                   |  |                 |      
|                                   |  | 2004            |       |  | 2005 | 
|                                   |  |                 |       |  |      | 
|                                   |  | (In millions of |      
|                                   |  | euro)           |      
|Generation and Energy Management   |  |                | 1,249 |  |      |  | 1,139 | 
|Sales, Infrastructure and Networks |  |                 | 837   |  |      |  | 959   | 
|Corporate                          |  |                 | 5     |  |      |  | 14    | 
|Services and Other Activities      |  |                 | 108   |  |      |  | 95    | 
|Eliminations                       |  |                 | 2     |  |      |  | 0     | 
|                                   |  |                 |       |  |      | 
|Total                              |  |                | 2,201 |  |      |  | 2,207 | 

     


95



---



##### Table of Contents





| |                 
| | ----------------
| | Operating Income



|                                   |  |                 |       |   |      |   |       |  
|---------------------------------- |  | --------------- | ----- | - | ---- | - | ----- | -
|                                   |  | Year Ended      |      
|                                   |  | December 31,    |      
|                                   |  |                 |      
|                                   |  | 2004            |       |   | 2005 |  
|                                   |  |                 |       |   |      |  
|                                   |  | (In millions of |      
|                                   |  | euro)           |      
|Generation and Energy Management   |  |                | 2,531 |   |      |  | 2,565 |  
|Sales, Infrastructure and Networks |  |                 | 2,693 |   |      |   | 2,778 |  
|Corporate                          |  |                 | 647   |   |      |   | 53    |  
|Services and Other Activities      |  |                 | 106   |   |      |   | 154   |  
|Eliminations                       |  |                 | (107  | ) |      |   | (12   | )
|                                   |  |                 |       |   |      |  
|Total                              |  |                | 5,870 |   |      |  | 5,538 |  

 




| |                                 
| | --------------------------------
| | Generation and Energy Management

    


   2    


 




| |                                   
| | ----------------------------------
| | Sales, Infrastructure and Networks

   


  


96



---



##### Table of Contents








| |          
| | ---------
| | Corporate

 




| |                              
| | -----------------------------
| | Services and Other Activities

 




| |             
| | ------------
| | Eliminations





| |                                                                    
| | -------------------------------------------------------------------
| | Financial Income/ Expense and Income/ Expenses from
    Investments

   




| |                                                                           
| | --------------------------------------------------------------------------
| | Income/ Expense from Investments Accounted For Using The
    Equity Method

   




| |             
| | ------------
| | Income Taxes



|                                                    |       |                 |       |       |      |  |       |       | 
|--------------------------------------------------- | ----- | --------------- | ----- | ----- | ---- |  | ----- | ----- | 
|                                                    |       | Year Ended      |      
|                                                    |       | December 31,    |      
|                                                    |       |                 |      
|                                                    |       | 2004            |       |       | 2005 | 
|                                                    |       |                 |       |       |      | 
|                                                    |       | (In millions of |      
|                                                    |       | euro)           |      
|Current taxes                                       |       |                 | 1,328 |       |      |  | 1,398 |      
|Difference on estimated income tax from prior years |       |                 | (14   | )     |      |  | 14    |      
|Deferred tax assets                                 |       |                 | 459   |       |      |  | 277   |      
|Deferred tax liabilities                            |       |                 | 343   |       |      |  | 245   |      
|                                                    |       |                 |       |       |      | 
|                                                    | Total |                 |       | 2,116 |      |  |       | 1,934 | 

   


97



---



##### Table of Contents



    






| |                                         
| | ----------------------------------------
| | Income/loss from discontinued operations

    




| |           
| | ----------
| | Net income

         





Inflation







U.S. GAAP Reconciliation






| |   |                                               
| | - | ----------------------------------------------
| |  | Fixed assets and related depreciation;        
|
| |  | Capitalized interest and related depreciation;
|
| |  | Customers connection fees;                   
|
| |  | Pension and employee termination accounting;  
|
| |  | Other post-retirement benefits accounting;    
|
| |  | Early retirement program;                     
|
| |  | Goodwill, impairment and related amortization;
|
| |  | Intangible assets;                            

98



---



##### Table of Contents





| |   |                                        
| | - | ---------------------------------------
| |  | Asset retirement obligations;          
|
| |  | Gain on sale of real estate businesses;
|
| |  | Stock option compensation expense;     
|
| |  | Accounting for income taxes; and       
|
| |  | Investment in equity securities.       



       




| |                                             
| | --------------------------------------------
| | Critical Accounting Policies under U.S. GAAP



Recoverability of goodwill.  


Accounting for derivatives.


99



---



##### Table of Contents





Recoverability of intangible assets and other long-term
assets.




| |                                   
| | ----------------------------------
| | New U.S. GAAP Accounting Standards



Variable interest entities.


04-5,


100



---



##### Table of Contents



04-5. 04-5


Financial instruments with characteristics of both
liabilities and equity.


Other than temporary impairment of investments. 03-1, 03-1 held-to held-to 03-1 03-1 03-1


Guidance in Determining Whether to Report Discontinued
Operations. 03-13, 03-13 03-13


Share-Based Payments. Share-Based
Payment Accounting for Stock-Based Compensation. Accounting for Stock Issued to Employees Statement of Cash Flows.




101



---



##### Table of Contents



Exchanges of Nonmonetary Assets.


Determining the Amortization period for leasehold
improvements. 05-6, Determining the amortization period for leasehold
improvements. 05-6


Accounting for Accumulated Other Comprehensive Income.





Liquidity and Capital Resources




| |                   
| | ------------------
| | Cash Flow Analysis



     freeing-up 


                  


102



---



##### Table of Contents



   


      


 






| |                  
| | -----------------
| | Capital Resources



       7-year  7-year  


      


 


103



---



##### Table of Contents



    




|                                                             |                                                     |                 |        |        |      |  |       |        |  
|------------------------------------------------------------ | --------------------------------------------------- | --------------- | ------ | ------ | ---- |  | ----- | ------ | -
|                                                             |                                                     | At December 31, |       
|                                                             |                                                     |                 |       
|                                                             |                                                     | 2004            |        |        | 2005 | 
|                                                             |                                                     |                 |        |        |      | 
|                                                             |                                                     | (In millions of |       
|                                                             |                                                     | euro)           |       
|Cash at banks and marketable securities (note 2)             |                                                     |                 | (364   | )      |      |  | (508  | )     
|Factoring receivables (note 4)                               |                                                     |                 | (391   | )      |      |  | (374  | )     
|Other finance receivables                                    |                                                     |                 | (11    | )      |      |  | (3    | )     
|                                                             | Total                                               |                 |        | (766   | )    |  |       | (885   | )
|Short-term debt (note 10):                                   |                                                     |                 |        |        |      |  |       |       
|Bank loans                                                   |                                                     |                 |        |        |      |  |       |       
| Use of revolving credit lines                              |                                                     |                 | 400    |        |      |  | 0     |       
| Other short-term bank debt                                 |                                                     |                 | 2,162  |        |      |  | 970   |       
|                                                             | Total bank loans                                    |                 |        | 2,562  |      |  |       | 970    |  
|Commercial paper                                             |                                                     |                 | 2,487  |        |      |  | 276   |       
|Other short-term financial loans                             |                                                     |                 | 191    |        |      |  | 116   |       
|                                                             | Total short-term debt                               |                 |        | 5,240  |      |  |       | 1,362  |  
|                                                             | Net short-term debt                                 |                 |        | 4,474  |      |  |       | 477    |  
|Long-term debt (including current maturities)
    (note 10): |                                                     |                 |        |        |      |  |       |       
|Bank loans                                                   |                                                     |                 | 11,672 |        |      |  | 3,195 |       
|Bonds                                                        |                                                     |                 | 9,776  |        |      |  | 8,599 |       
|Other loans                                                  |                                                     |                 | 374    |        |      |  | 191   |       
|                                                             | Total Long-Term Debt (including current maturities) |                 |        | 22,822 |      |  |       | 11,985 |  
|Long-term receivables                                        |                                                     |                 | (1,598 | )      |      |  | (66   | )     
|                                                             | Net Long-Term Debt (including current maturities)   |                 |        | 20,224 |      |  |       | 11,919 |  
|                                                             | Net Financial Indebtedness                          |                 |        | 24,698 |      |  |       | 12,396 |  

    5-year    


104



---



##### Table of Contents








            


    






105



---



##### Table of Contents





|                          |  |           |     |  |            |  |     |         |  |  |          | 
|------------------------- |  | --------- | --- |  | ---------- |  | --- | ------- |  |  | -------- | 
|                          |  | Long-Term |     |  | Short-Term |  |     |        
|Rating Agency             |  | Debt      |     |  | Debt       |  |     | Outlook | 
|                          |  |           |     |  |            |  |     |         | 
|Standard & Poors         |  |           | A+  |  |            |  | A-1 |         |  |  | Negative | 
|Moodys Investors Service |  |           | Aa3 |  |            |  | P-1 |         |  |  | Stable   | 



| |                                       
| | --------------------------------------
| | Future Liquidity and Capital Resources











| |   |                                                                                                                                                                                                                                                               
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the sale on February 2006 of a 6.28% stake in Wind to Weather
    for
    328 million
    in line with the provisions of the agreements signed by the
    parties on May 26, 2005;                                                                           
|
| |  | the acquisition of a 66% interest in SE for
    840 million
    (of which we already paid
    168 million
    as a deposit in 2005);                                                                                                                        
|
| |  | the acquisition of a 67.5% interest in Electrica Muntenia Sud
    for
    820 million.
    Closing of this transaction is expected by the end of the third
    quarter of 2006; and                                                                          
|
| |  | the distribution, made on June 22, 2006, of an ordinary
    dividend equal to
    0.44 per
    share, amounting in the aggregate to approximately
    2,715 million;
    and an interim dividend on 2006 results that we expect to pay in
    November 2006.




Off-Balance Sheet Arrangements




Indemnities.    


Financial guarantees.


106



---



##### Table of Contents



 


Derivative instruments.


Nuclear liability.





Contractual Obligations and Commitments




| |                        
| | -----------------------
| | Contractual Obligations



|                                              |  |                        |        |           |        |  |       |           |           |  |           |  |  |         |       |  |  |  |        | 
|--------------------------------------------- |  | ---------------------- | ------ | --------- | ------ |  | ----- | --------- | --------- |  | --------- |  |  | ------- | ----- |  |  |  | ------ | 
|                                              |  | Payments Due by Period |       
|                                              |  |                        |       
|                                              |  |                        |        | Less Than |        |  |       |           | More Than | 
|Contractual Obligations                       |  | Total                  |        |           | 1 Year |  |       | 1-3 Years |           |  | 3-5 Years |  |  | 5 Years |      
|                                              |  |                        |        |           |        |  |       |           |           |  |           |  |  |         |      
|                                              |  | (In millions of euro)  |       
|Long-term debt (including current maturities) |  |                        | 11,902 |           |        |  | 935   |           |           |  | 1,813     |  |  |         | 1,276 |  |  |  | 7,878  | 
|Capital (Finance) Lease Obligations(*)        |  |                        |       |           |        |  |      |           |           |  |          |  |  |         |      |  |  |  |       | 
|Operating leases                              |  |                        | 1,728  |           |        |  | 240   |           |           |  | 474       |  |  |         | 468   |  |  |  | 546    | 
|Purchase obligations                          |  |                        | 55,660 |           |        |  | 6,898 |           |           |  | 8,215     |  |  |         | 7,639 |  |  |  | 32,908 | 
|Other long-term obligations                   |  |                        | 0      |           |        |  | 0     |           |           |  |           |  |  |         |       |  |  |  |        | 
|Total                                         |  |                        | 69,290 |           |        |  | 8,073 |           |           |  | 10,502    |  |  |         | 9,383 |  |  |  | 41,332 | 






Long-term debt (including current maturities). 


Operating leases. 


Purchase obligations.




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Commitments to suppliers of fuel. We have entered into
    various fuel supply contracts, primarily for the purchase of
    fuel oil and natural gas, in respect of which we will be
    required to pay a total
    51,647 million.
    Our aggregate expenditures related to these commitments are
    expected to total
    19,066 million
    for the period from January 1, 2006 through
    December 31, 2010. Please see Item 4.
    Information on the Company  Business  The
    Enel Group  Generation and Energy
    Management  Fuel for information about our
    purchases of fuel.

107



---



##### Table of Contents





| |   |                                                                                                                                                                                                                                                                                                                                                                                  
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Commitments to suppliers of electricity. We also have
    unconditional purchase obligations for electric power in respect
    of which we will be required to pay a total of
    4,013 million.
    Our aggregate expenditures related to these commitments are
    expected to total
    3,686 million
    for the period from January 1, 2006 through
    December 31, 2010.



| |            
| | -----------
| | Commitments








| |   |                                                                                                                                                                                        
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Approximately
    6,692 million
    (6,813 million
    including intangible assets) relating to our Italian generation
    businesses;                                               
|
| |  | Approximately
    1,300 million
    relating to generation development from renewable resources;                                                                                      
|
| |  | Approximately
    4,408 million
    relating to our international operations;                                                                                                         
|
| |  | Approximately
    5,859 million
    relating to our electricity distribution and sale businesses,
    including approximately
    624 million
    for our Telemanagement project; and
|
| |  | Approximately
    338 million
    relating to our gas distribution business.                                                                                                          






Trend Information









|        |                                           
|------- | ------------------------------------------
|ITEM 6. | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES




Directors










108



---



##### Table of Contents











|                    |  |                                                                             |  |                |      | 
|------------------- |  | --------------------------------------------------------------------------- |  | -------------- | ---- | 
|                    |  |                                                                             |  | Year Initially |     
|Name                |  | Position                                                                    |  | Appointed      |     
|                    |  |                                                                             |  |                |     
|Piero Gnudi         |  | Chairman                                                                    |  |                | 2002 | 
|Fulvio Conti        |  | Director, general manager (direttore generale), chief
    executive officer |  |                | 2005 | 
|Giulio Ballio       |  | Director                                                                    |  |                | 2005 | 
|Augusto Fantozzi    |  | Director                                                                    |  |                | 2005 | 
|Alessandro Luciano  |  | Director                                                                    |  |                | 2005 | 
|Fernando Napolitano |  | Director                                                                    |  |                | 2002 | 
|Francesco Taranto   |  | Director                                                                    |  |                | 2000 | 
|Gianfranco Tosi     |  | Director                                                                    |  |                | 2002 | 
|Francesco Valsecchi |  | Director                                                                    |  |                | 2005 | 



Piero Gnudi.


109



---



##### Table of Contents





Fulvio Conti. direttore generale


Giulio Ballio.


Augusto Fantozzi.


Alessandro Luciano.


Fernando Napolitano.


110



---



##### Table of Contents





Francesco Taranto.


Gianfranco Tosi.


Francesco Valsecchi.


111



---



##### Table of Contents






Senior Management




|                    |  |     |    |  |                     |                                                                           |           |                |            |          |  |  |      | 
|------------------- |  | --- | -- |  | ------------------- | ------------------------------------------------------------------------- | --------- | -------------- | ---------- | -------- |  |  | ---- | 
|                    |  |     |    |  |                     |                                                                           |           | Year Appointed |           
|                    |  |     |    |  |                     | Year Joined                                                               |           |                | to Current |         
|Name                |  | Age |    |  | Management Position |                                                                           | the Group |                |            | Position | 
|                    |  |     |    |  |                     |                                                                           |           |                |            |          | 
|Andrea Brentan      |  |     | 57 |  |                     | Business Development Unit of International Division                       |           |                | 2002       |          |  |  | 2005 | 
|Alessandro Bufacchi |  |     | 59 |  |                     | Information and Communication Technology                                  |           |                | 2000       |          |  |  | 2000 | 
|Antonio Cardani     |  |     | 56 |  |                     | Audit                                                                     |           |                | 2000       |          |  |  | 2000 | 
|Salvatore Cardillo  |  |     | 56 |  |                     | Legal Affairs                                                             |           |                | 2000       |          |  |  | 2000 | 
|Gianluca Comin      |  |     | 43 |  |                     | Communication                                                             |           |                | 2002       |          |  |  | 2002 | 
|Luigi Ferraris      |  |     | 44 |  |                     | Chief Financial Officer in charge of Accounting, Planning and
    Control |           |                | 1999       |          |  |  | 2005 | 
|Sandro Fontecedro   |  |     | 61 |  |                     | Head of Generation and Energy Management Division                         |           |                | 1970       |          |  |  | 2003 | 
|Livio Gallo         |  |     | 55 |  |                     | Head of Infrastructure and Networks Division                              |           |                | 1999       |          |  |  | 2005 | 
|Claudio Machetti    |  |     | 47 |  |                     | Chief Financial Officer in charge of Finance                              |           |                | 2000       |          |  |  | 2005 | 
|Gianfilippo Mancini |  |     | 40 |  |                     | Energy Management Unit of Generation and Energy Management
    Division   |           |                | 1997       |          |  |  | 2005 | 
|Massimo Romano      |  |     | 46 |  |                     | Institutional and Regulatory Affairs                                      |           |                | 1997       |          |  |  | 1999 | 
|Paolo Ruzzini       |  |     | 54 |  |                     | Human Resources                                                           |           |                | 2003       |          |  |  | 2003 | 
|Claudio Sartorelli  |  |     | 60 |  |                     | Corporate Affairs                                                         |           |                | 1970       |          |  |  | 1996 | 
|Francesco Starace   |  |     | 50 |  |                     | Head of Market Division                                                   |           |                | 2000       |          |  |  | 2005 | 
|Carlo Tamburi       |  |     | 47 |  |                     | Procurement and Services                                                  |           |                | 2003       |          |  |  | 2005 | 



Andrea Brentan.


Alessandro Bufacchi. e-business


Antonio Cardani.


112



---



##### Table of Contents





Salvatore Cardillo.


Gianluca Comin.


Luigi Ferraris.


Sandro Fontecedro.


Livio Gallo.


Claudio Machetti.


Gianfilippo Mancini.


113



---



##### Table of Contents



Massimo Romano.


Paolo Ruzzini.


Claudio Sartorelli.


Francesco Starace.


Carlo Tamburi. Istituto per la
Ricostruzione Industriale





Board of Statutory Auditors








114



---



##### Table of Contents





|                   |  |                   |  |                |      | 
|------------------ |  | ----------------- |  | -------------- | ---- | 
|                   |  |                   |  | Year Initially |     
|Name               |  | Position          |  | Appointed      |     
|                   |  |                   |  |                |     
|Eugenio Pinto      |  | Chairman          |  |                | 2005 | 
|Carlo Conte        |  | Auditor           |  |                | 2004 | 
|Franco Fontana     |  | Auditor           |  |                | 2001 | 
|Giancarlo Giordano |  | Alternate Auditor |  |                | 2004 | 
|Paolo Sbordoni     |  | Alternate Auditor |  |                | 2004 | 








Executive Compensation





115



---



##### Table of Contents





|                                      |                                          |                                                       |  |              |            |              |                  |  |              |              |  |  |              |           |  |  |              |              | 
|------------------------------------- | ---------------------------------------- | ----------------------------------------------------- |  | ------------ | ---------- | ------------ | ---------------- |  | ------------ | ------------ |  |  | ------------ | --------- |  |  | ------------ | ------------ | 
|                                      |                                          |                                                       |  | Base         |            |              | Bonuses and      |  |              | Non-Monetary |  |  | Other        |          
|Name                                  |                                          | Positions(s) Held                                     |  | Compensation |            |              | Other Incentives |  |              | Benefits     |  |  | Compensation |          
|                                      |                                          |                                                       |  |              |            |              |                  |  |              |              |  |  |              |          
|                                      |                                          |                                                       |  | (In euros)   |            |              |                  |  |              |              | 
|Current and former directors          |                                          |                                                       |  |              |            |              |                  |  |              |              |  |  |              |           |  |  |              |             
|Piero Gnudi                           |                                          | Chairman                                              |  |              | 700,755.14 |              |                  |  | 585,998.30   | (1)          |  |  | 11,050.68    | (2)       |  |  | 2,640,000.00 | (3)         
|Paolo Scaroni                         |                                          | Chief executive officer, general manager, director(6) |  |              | 294,507.19 |              |                  |  | 3,187,024.91 | (4)          |  |  |              |           |  |  | 5,997,675.71 | (5)         
|Fulvio Conti                          |                                          | Chief executive officer, general manager, director    |  |              | 350,000.00 |              |                  |  | 350,000.00   | (7)          |  |  |              |           |  |  | 982,959.61   | (8)         
|Mauro Miccio                          |                                          | Director(6)                                           |  |              | 47,404.21  |              |                  |  |              |              |  |  |              |           |  |  |              |             
|Franco Morganti                       |                                          | Director(6)                                           |  |              | 46,630.90  |              |                  |  |              |              |  |  |              |           |  |  | 28,506.84    | (9)         
|Giulio Ballio                         |                                          | Director                                              |  |              | 63,583.10  |              |                  |  |              |              |  |  |              |           |  |  |              |             
|Augusto Fantozzi                      |                                          | Director                                              |  |              | 62,833.10  |              |                  |  |              |              |  |  |              |           |  |  |              |             
|Alessandro Luciano                    |                                          | Director                                              |  |              | 62,833.10  |              |                  |  |              |              |  |  |              |           |  |  |              |             
|Fernando Napolitano                   |                                          | Director                                              |  |              | 110,479.99 |              |                  |  |              |              |  |  |              |           |  |  |              |             
|Francesco Taranto                     |                                          | Director                                              |  |              | 117,029.40 |              |                  |  |              |              |  |  |              |           |  |  | 18,273.97    | (10)        
|Gianfranco Tosi                       |                                          | Director                                              |  |              | 109,963.53 |              |                  |  |              |              |  |  |              |           |  |  |              |             
|Francesco Valsecchi                   |                                          | Director                                              |  |              | 62,883.10  |              |                  |  |              |              |  |  |              |           |  |  |              |             
|                                      |                                          |                                                       |  |              |            |              |                  |  |              |              |  |  |              |          
|                                      | Total compensation of Directors          |                                                       |  |              |            | 2,028,852.76 |                  |  |              | 4,123,023.21 |  |  |              | 11,050.68 |  |  |              | 9,667,416.13 | 
|Current and former statutory auditors |                                          |                                                       |  |              |            |              |                  |  |              |              |  |  |              |           |  |  |              |             
|Angelo Provasoli                      |                                          | Chairman(11)                                          |  |              | 35,860.80  |              |                  |  |              |              |  |  |              |           |  |  |              |             
|Eugenio Pinto                         |                                          | Chairman                                              |  |              | 49,416.80  |              |                  |  |              |              |  |  |              |           |  |  |              |             
|Franco Fontana                        |                                          | Statutory Auditor                                     |  |              | 74,500.00  |              |                  |  |              |              |  |  |              |           |  |  |              |             
|Carlo Conte                           |                                          | Statutory Auditor                                     |  |              | 75,000.00  | (12)         |                  |  |              |              |  |  |              |           |  |  |              |             
|                                      |                                          |                                                       |  |              |            |              |                  |  |              |              |  |  |              |          
|                                      | Total compensation of Statutory Auditors |                                                       |  |              |            | 234,777.60   |                  |  |              |              |  |  |              |           |  |  |              |              | 
|                                      |                                          |                                                       |  |              |            |              |                  |  |              |              |  |  |              |          
|                                      | Total compensation paid                  |                                                       |  |              |            | 2,263,630.36 |                  |  |              | 4,123,023.21 |  |  |              | 11,050.68 |  |  |              | 9,667,416.13 | 








| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | This amount is composed of:
    (i) 186,000.00
    as a variable part of the base compensation relating to fiscal
    year 2004, resolved upon and paid in 2005;
    (ii) 199,998.30
    as a variable part of the base compensation relating to fiscal
    year 2005, resolved upon and paid in 2005; and
    (iii) 200,000.00
    as bonus for the sale of Wind to Weather.                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| | (2) | Insurance policies.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| | (3) | This compensation was determined on the basis of a phantom
    stock option plan granted by the board of directors to
    Piero Gnudi for his role of chairman of the board of directors
    from 2002 through 2005. Under this phantom stock option
    plan the beneficiary was awarded the right to receive a
    compensation, subject to ordinary taxation, equal to the
    difference between the market value of Enels shares at the
    time of the exercise of the phantom stock options
    assigned and the exercise price of the same options determined
    at the time of the grant, such amount being multiplied by the
    number of the phantom stock options assigned. In
    phantom stock option plans, unlike conventional
    stock option plans, neither actual stock options are granted nor
    shares are issued.

116



---



##### Table of Contents





| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (4) | This amount is composed of:
    (i) 700,000.00
    as a variable part of the compensation relating to fiscal year
    2004, resolved upon and paid in 2005, (ii)
    291,666.66 as a
    variable part of the compensation relating to fiscal year 2005,
    resolved upon and paid in 2005,
    (iii) 1,695,358.25
    as a bonus entry compensation and
    (iv) 500,000.00
    as bonus for the sale of Wind to Weather.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|
| | (5) | This amount is composed of:
    (i) 312,410.07
    as base compensation for services rendered as general manager in
    2005, and
    (ii) 600,000.00
    as a variable part of the same compensation relating to fiscal
    year 2004, resolved upon and paid in 2005,
    (iii) 250,000.00
    as a variable part of the same compensation relating to fiscal
    year 2005, resolved upon and paid in 2005,
    (iv) 322,291.64
    for severance indemnity,
    (v) 1,872,000.00
    as compensation determined on the basis of a phantom stock
    option plan and subject to ordinary taxation. For a
    description of Enels phantom stock option
    plans please see note (3) above;
    (vi) 2,640,974.00
    for a bonus connected to the exercise of stock options granted
    in his capacity of general manager. This bonus is paid to all
    managers when they exercise the options granted; its amount is
    proportionate to the number of options exercised and is
    connected to dividends distributed by Enel for assets divestment.
|
| | (6) | Former member of Enels board of directors.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| | (7) | Variable part of the base compensation relating to fiscal year
    2005, resolved upon and paid in 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|
| | (8) | This amount is composed of:
    (i) 431,980.74
    as base compensation for services rendered as general manager in
    2005,
    (ii) 408,333.31
    as a variable part of the same compensation relating to fiscal
    year 2005 and paid in 2005
    (iii) 142,645.56
    as bonus connected to the exercise of stock options following
    May 30, 2005 (date of his appointment as chief executive
    officer and general manager) granted to Mr. Conti for his
    position as head of Enels Finance, Administration and
    Control department vested until June 20, 2005. This bonus
    is paid to all managers when they exercise the options granted;
    its amount is proportionate to the number of options exercised
    and is connected to dividends distributed by Enel for assets
    divestment.                                                                                                                                                                                                                                                
|
| | (9) | Compensation paid for services rendered to Wind, as director
    until August 11, 2005 (for the amount of
    18,273.97) and
    for certain non-managerial tasks delegated to him by the board
    of directors in his capacity as director (for the amount of
    10,232.87).
    Mr. Morganti ceased to perform these tasks, effective as of
    March 24, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    



|     |                                                                                                                                                                                                                  
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(10) | Compensation paid as a director of Wind until August 11,
    2005.                                                                                                                                               
|    
|(11) | Mr. Provasoli resigned on May 26, 2005.                                                                                                                                                                          
|    
|(12) | Compensation paid to the MEF (for the amount of
    55,000.00)
    pursuant to the directive of Council of Ministers 
    Public Office department (Dipartimento della Funzione Pubblica)
    of March 1, 2000.





 






| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | In April 2001, 621,280 options to purchase the same number of
    Enels ordinary shares, under the 2001 stock option plan.
    Of these options, 56% vested and, consequently, 347,916 options
    were exercisable starting in 2004. These options expired on
    December 31, 2005. The exercise price for these options was
    7.272. During
    the period between June 1, 2005, and June 16, 2005,
    Mr. Conti exercised all of the vested options and sold
    332,916 of the resulting shares on the market;

117



---



##### Table of Contents





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | In March 2002, a further 902,500 options to purchase the same
    number of Enels ordinary shares, under the 2002 stock
    option plan. All these options vested and, consequently, 30% of
    the options were exercisable starting in 2003, an additional 30%
    starting in 2004 and the remaining 40% starting in 2005. These
    options expire on December 31, 2007. The exercise price for
    these options is
    6.426. During
    the period between May 24, 2004, and June 11, 2004,
    Mr. Conti exercised 250,000 of these options and sold the
    resulting shares on the market. Subsequently, during the period
    between November 12, 2004, and December 2, 2004,
    Mr. Conti exercised a further 175,000 of these options, and
    between February 3, 2005, and February 23, 2005, a
    further 141,500 of these options and sold all of the resulting
    shares on the market. As of May 31, 2006, Mr. Conti
    has not exercised any of the remaining 336,000 options;
|
| |  | In April 2003, a further 992,800 options to purchase the same
    number of Enels ordinary shares, under the 2003 stock
    option plan. All these options vested and, consequently, 30% of
    the options are exercisable starting from 2004, an additional
    30% starting from 2005 and the remaining 40% starting from 2006.
    These options expire on December 31, 2008. The exercise
    price for these options is
    5.240. During
    the period between May 24, 2004, and June 11, 2004,
    Mr. Conti exercised 297,840 of these options and sold the
    resulting shares on the market. Subsequently, during the period
    between February 3, 2005, and February 23, 2005,
    Mr. Conti exercised a further 200,000 of these options and
    sold the resulting shares on the market. As of May 31,
    2006, Mr.Conti has not exercised any of the remaining 494,960
    options;                                                                                                
|
| |  | In March 2004, a further 600,000 options to purchase the same
    number of Enels ordinary shares, under the 2004 stock
    option plan. All these options vested and, consequently, 15% of
    the options may be exercised starting from 2005, another 15%
    starting from 2006, an additional 30% starting from 2007 and the
    remaining 40% starting from 2008. These options expire on
    December 31, 2009. The exercise price for these options is
    6.242. As of
    May 31, 2006, Mr. Conti has not exercised any of these
    options; and                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| |  | In March 2005, a further 600,000 options to purchase the same
    number of Enels ordinary shares, under the 2005 stock
    option plan. Given that the conditions precedent provided for in
    the 2005 stock option plan were not satisfied, none of these
    options vested and all automatically lapsed.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          






Share Ownership




|                                           |       |                 |        |         | 
|------------------------------------------ | ----- | --------------- | ------ | ------- | 
|                                           |       | Number of       |       
|                                           |       | Ordinary Shares |       
|                                           |       | Held as of      |       
|Name of Director or Statutory Auditor      |       | May 31, 2006    |       
|                                           |       |                 |       
|Piero Gnudi                                |       |                 | 70,524 | (1)    
|Fulvio Conti                               |       |                 | 41,324 | (2)    
|Francesco Taranto                          |       |                 | 10,000 |        
|Giulio Ballio                              |       |                 | 1,700  | (3)    
|Giancarlo Giordano                         |       |                 | 524    |        
|All other directors and statutory auditors |       |                 | 0      |        
|                                           | Total |                 |        | 124,072 | 






|    |                                                                                                  
|--- | -------------------------------------------------------------------------------------------------
|(1) | 46,000 of which are held by a company controlled by
    Mr. Gnudi and 24,262 by Mr. Gnudis wife.
|   
|(2) | 762 of which are held by Mr. Contis wife.                                                       

118



---



##### Table of Contents





|    |                                                   
|--- | --------------------------------------------------
|(3) | All of these shares are held by Mr. Ballios wife.




Employees




|                                   |                  |           |        |        |          |  |    |     |  
|---------------------------------- | ---------------- | --------- | ------ | ------ | -------- |  | -- | --- | -
|                                   |                  | Number of |        |        |         
|                                   |                  | Employees |        |        | Division | 
|                                   |                  |           |        |        |          | 
|Generation and Energy Management   |                  |           | 9,904  |        |          |  | 19 | %  
|Sales, Infrastructure and Networks |                  |           | 35,783 |        |          |  | 69 | %  
|Services and Other Activities      |                  |           | 5,522  |        |          |  | 11 | %  
|Holding Company                    |                  |           | 569    |        |          |  | 1  | %  
|Discontinued Operations            |                  |           | 0      |        |          |  | 0  | %  
|                                   | Total Enel Group |           |        | 51,778 |          |  |    | 100 | %





|     |  |                     |       | 
|---- |  | ------------------- | ----- | 
|     |  | Estimated Number of |      
|     |  | Potential Retirees  |      
|     |  |                     |      
|2006 |  |                     | 1,700 | 
|2007 |  |                     | 1,700 | 
|2008 |  |                     | 1,000 | 
|2009 |  |                     | 1,200 | 
|2010 |  |                     | 800   | 





|                                |  |                    |        |  |      |  |        |      |  |  |        |  |  |      |        |  |  |  |        | 
|------------------------------- |  | ------------------ | ------ |  | ---- |  | ------ | ---- |  |  | ------ |  |  | ---- | ------ |  |  |  | ------ | 
|                                |  | As of December 31, |       
|                                |  |                    |       
|                                |  | 2001               |        |  | 2002 |  |        | 2003 |  |  | 2004   |  |  | 2005 |       
|                                |  |                    |        |  |      |  |        |      |  |  |        |  |  |      |       
|Employees (other than managers) |  |                    | 71,802 |  |      |  | 70,313 |      |  |  | 63,985 |  |  |      | 61,193 |  |  |  | 51,216 | 
|Managers                        |  |                    | 859    |  |      |  | 891    |      |  |  | 785    |  |  |      | 705    |  |  |  | 562    | 
|                                |  |                    |        |  |      |  |        |      |  |  |        |  |  |      |       
|Total                           |  |                    | 72,661 |  |      |  | 71,204 |      |  |  | 64,770 |  |  |      | 61,898 |  |  |  | 51,778 | 
|                                |  |                    |        |  |      |  |        |      |  |  |        |  |  |      |       



119



---



##### Table of Contents
























|        |                                                  
|------- | -------------------------------------------------
|ITEM 7. | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS




Major Shareholders





120



---



##### Table of Contents

























| |   |                                                            
| | - | -----------------------------------------------------------
| |  | The material acquisition of Enels shares by third parties;
|
| |  | Material shareholders agreements;                         
|
| |  | Major corporate changes; and                               
|
| |  | The appointment of one non-voting director.                





| |   |                                                                                                                                                                                    
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Special rules concerning appointments of directors and statutory
    auditors in order to ensure that minority shareholders are
    represented; and                               
|
| |  | Limitations on the maximum number of shares that a shareholder,
    or group of shareholders, other than the MEF (or other entities
    controlled by the Italian state), may hold.





121



---



##### Table of Contents








Related Party Transactions























122



---



##### Table of Contents








|        |                      
|------- | ---------------------
|ITEM 8. | FINANCIAL INFORMATION




Consolidated Financial Statements







Other Financial Information





Legal Proceedings




 






| |                                  
| | ---------------------------------
| | Electromagnetic field proceedings







| |                    
| | -------------------
| | Blackout litigation



123



---



##### Table of Contents



 













| |                    
| | -------------------
| | Brownout litigation



124



---



##### Table of Contents



 






| |              
| | -------------
| | INPS circular

Istituto Nazionale Previdenza
Sociale











| |                                          
| | -----------------------------------------
| | Alleged abuse of market power proceedings




125



---



##### Table of Contents





| |                                                    
| | ---------------------------------------------------
| | Alleged abuse of dominant position by Enel Energia.






| |                                                                   
| | ------------------------------------------------------------------
| | Alleged abuse of dominant position by Enel and Enel
    Produzione





| |                                                                 
| | ----------------------------------------------------------------
| | Alleged abuse of dominant position by Enel Viesgo
    Generaciòn







| |                       
| | ----------------------
| | Orimulsion arbitration



126



---



##### Table of Contents





| |                    
| | -------------------
| | Echelon arbitration

 




| |                                                     
| | ----------------------------------------------------
| | Congestion fees litigation with the Energy Authority

 




| |                                                                              
| | -----------------------------------------------------------------------------
| | Suspension of the conversion works at the Torrevaldaliga Nord
    power plant









| |                                                                       
| | ----------------------------------------------------------------------
| | Criminal proceedings involving certain former Enelpower
    executives





127



---



##### Table of Contents



  


 pro rata









Dividend Policy






|                                                  |  |       |  |       |  |       |  |       |  |      
|------------------------------------------------- |  | ----- |  | ----- |  | ----- |  | ----- |  | -----
|                                                  |  | 2001  |  | 2002  |  | 2003  |  | 2004  |  | 2005 
|                                                  |  |       |  |       |  |       |  |       |  |      
|Dividends per ordinary share (in euros)(1)        |  | 0.36 |  | 0.36 |  | 0.36 |  | 0.69 |  | 0.63
|Dividends per ordinary share (in U.S. dollars)(2) |  | $0.32 |  | $0.38 |  | $0.45 |  | $0.87 |  | $0.78






|    |                                                                                                                                                                                                                                                                                                                                                                              
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The amount of the aggregate dividend for each of 2001, 2002,
    2003, 2004 and 2005 was equal to approximately 52%, 109%, 87%,
    162% and 100% of our consolidated net income for the relevant
    year, respectively (with the amounts used for 2004 and 2005
    being under IFRS).                                                                                     
|   
|(2) | We have translated the historical dividend amounts into
    U.S. dollars using the noon buying rate for euro in effect
    on the respective payment dates. The noon buying rate for euro
    may differ from the rate that may be used by the Depositary for
    the ADSs in order to convert euro into U.S. dollars for
    purposes of making payments to holders of ADSs.

 


128



---



##### Table of Contents





  








| |   |                                              
| | - | ---------------------------------------------
| |  | our financial performance;                   
|
| |  | cash and capital requirements;               
|
| |  | any restrictions in financing agreements; and
|
| |  | prevailing business conditions.              






Significant Changes


 




129



---



##### Table of Contents














|        |                      
|------- | ---------------------
|ITEM 9. | THE OFFER AND LISTING




Markets and Price Range of ADSs and Ordinary Shares






|                       |  |              |       |  |     |  |       | 
|---------------------- |  | ------------ | ----- |  | --- |  | ----- | 
|                       |  | ADSs         |      
|                       |  |              |      
|                       |  | High         |       |  | Low | 
|                       |  |              |       |  |     | 
|                       |  | (In dollars) |      
|2001                   |  |              | 38.85 |  |     |  | 25.00 | 
|2002                   |  |              | 30.31 |  |     |  | 22.60 | 
|2003                   |  |              | 35.85 |  |     |  | 26.58 | 
|2004                   |  |              |       |  |     |  |       | 
|First Quarter          |  |              | 40.89 |  |     |  | 34.35 | 
|Second Quarter         |  |              | 41.98 |  |     |  | 38.47 | 
|Third Quarter          |  |              | 41.19 |  |     |  | 37.48 | 
|Fourth Quarter         |  |              | 49.44 |  |     |  | 40.00 | 
|2005                   |  |              |       |  |     |  |       | 
|First Quarter          |  |              | 49.95 |  |     |  | 46.23 | 
|Second Quarter         |  |              | 48.76 |  |     |  | 42.24 | 
|Third Quarter          |  |              | 45.58 |  |     |  | 41.57 | 
|Fourth Quarter         |  |              | 42.81 |  |     |  | 38.42 | 
|December 2005-May 2006 |  |              |       |  |     |  |       | 
|December 2005          |  |              | 40.81 |  |     |  | 39.27 | 
|January 2006           |  |              | 42.65 |  |     |  | 40.35 | 
|February 2006          |  |              | 42.98 |  |     |  | 41.02 | 
|March 2006             |  |              | 42.83 |  |     |  | 41.01 | 
|April 2006             |  |              | 43.26 |  |     |  | 40.79 | 
|May 2006               |  |              | 44.85 |  |     |  | 43.11 | 

130



---



##### Table of Contents





|                       |  |                 |       |  |     |  |       | 
|---------------------- |  | --------------- | ----- |  | --- |  | ----- | 
|                       |  | Ordinary Shares |      
|                       |  |                 |      
|                       |  | High            |       |  | Low | 
|                       |  |                 |       |  |     | 
|                       |  | (In euros)      |      
|2001                   |  |                 | 8.051 |  |     |  | 5.650 | 
|2002                   |  |                 | 6.765 |  |     |  | 4.490 | 
|2003                   |  |                 | 6.022 |  |     |  | 5.015 | 
|2004                   |  |                 |       |  |     |  |       | 
|First Quarter          |  |                 | 6.581 |  |     |  | 5.464 | 
|Second Quarter         |  |                 | 6.920 |  |     |  | 6.454 | 
|Third Quarter          |  |                 | 6.651 |  |     |  | 6.143 | 
|Fourth Quarter         |  |                 | 7.245 |  |     |  | 6.570 | 
|2005                   |  |                 |       |  |     |  |       | 
|First Quarter          |  |                 | 7.485 |  |     |  | 6.889 | 
|Second Quarter         |  |                 | 7.53  |  |     |  | 6.977 | 
|Third Quarter          |  |                 | 7.30  |  |     |  | 6.845 | 
|Fourth Quarter         |  |                 | 7.147 |  |     |  | 6.499 | 
|December 2005-May 2006 |  |                 |       |  |     |  |       | 
|December 2005          |  |                 | 6.815 |  |     |  | 6.632 | 
|January 2006           |  |                 | 7.005 |  |     |  | 6.675 | 
|February 2006          |  |                 | 7.189 |  |     |  | 6.861 | 
|March 2006             |  |                 | 7.073 |  |     |  | 6.853 | 
|April 2006             |  |                 | 6.995 |  |     |  | 6.695 | 
|May 2006               |  |                 | 6.978 |  |     |  | 6.715 | 













|         |                       
|-------- | ----------------------
|ITEM 10. | ADDITIONAL INFORMATION




Stock Option Plans






131



---



##### Table of Contents



inter
vivos.






132



---



##### Table of Contents





|              |  |          |     |     |               |  |            |                   |  |              |            |  |  |            |       |     |  |  |                   | 
|------------- |  | -------- | --- | --- | ------------- |  | ---------- | ----------------- |  | ------------ | ---------- |  |  | ---------- | ----- | --- |  |  | ----------------- | 
|              |  | No. of   |     |     | Total Options |  |            |                   |  | Strike Price |            |  | 
|Year of Grant |  | Grantees |     |     | Granted       |  |            | Options Exercised |  |              |           |  |  | Expiration |      
|              |  |          |     |     |               |  |            |                   |  |              |            |  |  |            |      
|2002          |  |          | 383 | (1) |               |  | 41,748,500 |                   |  |              | 35,007,900 |  |  |            | 6.426 | (2) |  |  | December 31, 2007 | 
|2003          |  |          | 549 | (3) |               |  | 47,624,005 |                   |  |              | 38,337,287 |  |  |            | 5.240 |     |  |  | December 31, 2008 | 
|2004          |  |          | 640 | (3) |               |  | 38,527,550 |                   |  |              | 14,334,553 |  |  |            | 6.242 |     |  |  | December 31, 2009 | 
|2005          |  |          | 448 | (3) |               |  | 28,757,000 | (4)               |  |              |           |  |  |            | 7.273 |     |  |  | December 31, 2010 | 






|    |                                                                                                                                                                                                                                                                                                              
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Including Enels former chief executive officers,
    Mr. Tatò and Mr. Scaroni, each in his capacity as
    general managers (direttori generali), as well as
    Enels current chief executive officer, Mr. Conti, in
    his capacity as chief financial officer.                                         
|   
|(2) | The strike price for the options granted to Enels former
    chief executive officer, Mr. Scaroni, was determined with
    regard to the reference price of Enels shares on
    Telematico on the date of his appointment as general manager
    (direttore generale), and was therefore set at
    6.480.
|   
|(3) | Including Enels former chief executive officer,
    Mr. Scaroni, in his capacity as general manager
    (direttore generale) as well as Enels current chief
    executive officer, Mr. Conti, in his capacity as chief
    financial officer.                                                              
|   
|(4) | The conditions for the exercise of options under the 2005 plan
    were not satisfied, therefore none of the options granted
    thereunder became exercisable.                                                                                                                                              





| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i) under the May 2001 authorization, on April 10,
    2003, Enels board of directors resolved to increase the
    Companys share capital by an amount not to exceed
    41,748,500
    through the issuance (in one or more tranches) of a maximum of
    41,748,500 new ordinary shares to satisfy the exercise of
    options granted under the 2002 plan and to be subscribed for by
    December 31, 2007; as of May 24, 2006, 35,007,900
    ordinary shares had been issued in connection with the exercise
    of an equivalent number of options under the 2002 plan;                                                                            
|
| | (ii) under the May 2003 authorization, on April 7,
    2004, Enels board of directors resolved to increase the
    Companys share capital by an amount not to exceed
    47,624,005
    through the issuance (in one or more tranches) of a maximum of
    47,624,005 new ordinary shares to satisfy the exercise of
    options granted under the 2003 plan and to be subscribed for by
    December 31, 2008; as of May 24, 2006, 38,337,287
    ordinary shares had been issued in connection with the exercise
    of an equivalent number of options under the 2003 plan;                                                                            
|
| | (iii) under the May 2004 authorization, on March 30,
    2005, Enels board of directors resolved to increase the
    Companys share capital by an amount not to exceed
    38,527,550
    through the issuance (in one or more tranches) of a maximum of
    38,527,550 new ordinary shares to satisfy the exercise of
    options granted under the 2004 plan and to be subscribed for by
    December 31, 2009; as of May 24, 2006, 14,334,553
    ordinary shares had been issued in connection with the exercise
    of an equivalent number of options under the 2004 plan;                                                                          
|
| | (iv) at the annual meeting held on May 26, 2005,
    Enels shareholders authorized the board of directors, for
    a period of five years, to increase Enels share capital by
    a maximum total amount of
    28,757,000 in
    order to permit the issuance (in one or more tranches) of a
    maximum of 28,757,000 new ordinary shares under the terms of the
    2005 stock option plan. Given that one of the two conditions
    precedent for the exercise of the options was not satisfied, the
    options granted under the 2005 plan are not exercisable and such
    authorization to increase Enels share capital lapsed
    automatically;
|
| | (iv) at the annual meeting held on May 26, 2006,
    Enels shareholders authorized the board of directors, for
    a period of five years, to increase Enels share capital by
    a maximum total amount of
    31,790,000 in                                                                                                                                                                                                                                                                                                                                                                                                                             

133



---



##### Table of Contents



| |                                                                                                                                                                                                                                                                                                                                                                                                              
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | order to permit the issuance (in one or more tranches) of a
    maximum of 31,790,000 new ordinary shares under the terms of the
    2006 stock option plan, as approved by the same annual meeting.
    This authorization, together with those granted in previous
    years and not yet utilized or expired, would entail a maximum
    potential dilution of Enels share capital amounting to
    1.15%.







     





By-Laws


Statuto


Testo Unico
dellIntermediazione Finanziaria


134



---



##### Table of Contents







| |        
| | -------
| | General

 








| |                        
| | -----------------------
| | Authorization of Shares











| |                            
| | ---------------------------
| | Form and Transfer of Shares



135



---



##### Table of Contents







| |   |                                                                                                                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | an Italian or EU bank;                                                                                                                                                                             
|
| |  | a non-EU bank authorized by the Bank of Italy to operate in the
    Italian market;                                                                                                                
|
| |  | Società di Intermediazione Mobiliare, or SIM;                                                                                                                                                      
|
| |  | an EU investment company;                                                                                                                                                                          
|
| |  | a non-EU investment company authorized by CONSOB to provide
    investment services in Italy;                                                                                                      
|
| |  | an Italian asset management company;                                                                                                                                                               
|
| |  | a stock broker;                                                                                                                                                                                    
|
| |  | the company which has issued the shares;                                                                                                                                                           
|
| |  | the controlling shareholder of the company which has issued the
    shares;                                                                                                                        
|
| |  | the Bank of Italy;                                                                                                                                                                                 
|
| |  | an EU or non-EU entity operating a centralized clearing system;                                                                                                                                    
|
| |  | a financial intermediary operating a clearing system governed by
    art. 69 (2) and 70 of the TUF;                                                                                                
|
| |  | a financial intermediary registered on the list kept by the Bank
    of Italy under art. 107 of Legislative Decree No. 385 of
    September 1, 1993;                                               
|
| |  | Poste Italiane S.p.A. (the Italian Post Office company);                                                                                                                                           
|
| |  | Cassa Depositi e Prestiti;                                                                                                                                                                         
|
| |  | the MEF; and                                                                                                                                                                                       
|
| |  | the managers of foreign clearing, settlement and guarantee
    systems for financial instruments, provided that they are
    subject to supervision equivalent to that provided by Italian
    law.







136



---



##### Table of Contents









| |                             
| | ----------------------------
| | Limitations on shareholdings







| |   |                                                                                                                                                              
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Controlling entities and directly or indirectly controlled
    entities of the holder, as well as entities controlled by the
    same controlling entity; and
|
| |  | Affiliated personal entities of the holder, including spouses
    and other closely related personal relatives.                                              





| |                          
| | -------------------------
| | Special powers of the MEF





| |                                              
| | ---------------------------------------------
| | Opposition to material acquisitions of shares



137



---



##### Table of Contents







| |                                                
| | -----------------------------------------------
| | Opposition to material shareholders agreements





| |                                     
| | ------------------------------------
| | Members of Enels Board of Directors





| |                                 
| | --------------------------------
| | Veto power over material changes







| |                
| | ---------------
| | Dividend Rights





138



---



##### Table of Contents







| |              
| | -------------
| | Voting Rights











| |                   
| | ------------------
| | Board of Directors













139



---



##### Table of Contents













| |                   
| | ------------------
| | Statutory Auditors

Collegio Sindacale






140



---



##### Table of Contents

















| |                  
| | -----------------
| | External Auditors



141



---



##### Table of Contents









| |                         
| | ------------------------
| | Meetings of Shareholders



Gazzetta Ufficiale










142



---



##### Table of Contents









| |                  
| | -----------------
| | Preemptive Rights





| |                        
| | -----------------------
| | Reports to Shareholders

20-F






| |                   
| | ------------------
| | Liquidation Rights





| |                                          
| | -----------------------------------------
| | Purchase by the Company of its Own Shares



143



---



##### Table of Contents















| |                                                                
| | ---------------------------------------------------------------
| | Notification of the Acquisition of Shares and Voting
    Rights





144



---



##### Table of Contents



bis






| |                                                                                                                                                                        
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i) concern prior consultation for the exercise of voting
    rights in a listed company or its controlling company;                                                   
|
| | (ii) contain limitations on the transfer of shares or
    securities which grant the right to purchase or subscribe shares
    of the companies mentioned in (i) above;
|
| | (iii) provide for the purchase of shares or securities
    mentioned in (ii) above; or                                                                                 
|
| | (iv) have as their object or effect the exercise (including
    joint exercise) of a dominant influence over a listed company or
    its controlling company.          







145



---



##### Table of Contents







| |                              
| | -----------------------------
| | Minority Shareholders Rights















146



---



##### Table of Contents









| |                   
| | ------------------
| | Tender Offer Rules

12-month


inter alia,


147



---



##### Table of Contents









| |                                            
| | -------------------------------------------
| | Liability for Mismanagement of Subsidiaries






Significant Differences in Corporate Governance Practices for
Purposes of


Section 303A.11 of the NYSE Listed Company Manual




| |         
| | --------
| | Overview

società per azioni






148



---



##### Table of Contents











| |                      
| | ---------------------
| | Independent Directors

NYSE domestic company standards.


Enels practice.






149



---



##### Table of Contents











| |                   
| | ------------------
| | Executive Sessions

NYSE domestic company standards.


Enels practice.




| |                                            
| | -------------------------------------------
| | Audit Committee and Internal Audit Function

NYSE domestic company standards.


150



---



##### Table of Contents





Enels practice.






| |                       
| | ----------------------
| | Compensation Committee

NYSE domestic company standards.


Enels practice. 20-F.


151



---



##### Table of Contents





| |                     
| | --------------------
| | Nominating Committee

NYSE domestic company standards.


Enels practice.




| |                                                                         
| | ------------------------------------------------------------------------
| | Corporate Governance Guidelines/ Code of Business Conduct
    and Ethics

NYSE domestic company standards.


Enels practice.


.






| |                                                  
| | -------------------------------------------------
| | Certifications as to Violations of NYSE Standards

NYSE domestic company standards. 10-K).


152



---



##### Table of Contents



Enels practice. 20-F




| |                                                                                   
| | ----------------------------------------------------------------------------------
| | Shareholder Approval of Adoption and Modification of
    Equity Compensation Plans

NYSE domestic company standards.


Enels practice.





Material Contracts







Exchange Controls












153



---



##### Table of Contents








Taxation












| |                             
| | ----------------------------
| | Withholding Tax on Dividends





154



---



##### Table of Contents











155



---



##### Table of Contents

















| |                     
| | --------------------
| | Tax on capital gains



156



---



##### Table of Contents



12-month








non-U.S. non-U.S. non-U.S. non-U.S.




| |                                                
| | -----------------------------------------------
| | Taxation of Distributions from Capital Reserves





| |             
| | ------------
| | Transfer tax



157



---



##### Table of Contents





| |                    
| | -------------------
| | Estate and gift tax



  





Documents On Display


20-F 20-F, 1-800-SEC-0330







|         |                                                          
|-------- | ---------------------------------------------------------
|ITEM 11. | QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK




Price Risk Management and Market Risk Information






over-the


158



---



##### Table of Contents





  














| |                      
| | ---------------------
| | Foreign exchange risk




159



---



##### Table of Contents



 




| |   |                                                                                                                                                                                                                                                                        
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | contracts with a notional amount of
    1,569 million
    used to hedge the foreign exchange risk related to fuel
    purchases, electricity imports and expected cash flows in
    currencies other than the euro
    (855 million
    as of December 31, 2004); and
|
| |  | contracts with a notional amount of
    35 million
    used to hedge the foreign exchange risk related to the repayment
    of the commercial paper we issued in foreign currency
    (715 million
    as of December 31, 2004).                                     



   


   




| |                   
| | ------------------
| | Interest rate risk

  




         




 


160



---



##### Table of Contents





 




| |                     
| | --------------------
| | Commodity price risk









| |   |                                                                                                                                             
| | - | --------------------------------------------------------------------------------------------------------------------------------------------
| |  | Futures on
    commodities: 290.7 million
    or 5,971 contracts;                                                                          
|
| |  | Options on
    commodities: 0.2 million
    or 24,165 metric tons, of which
    9 million
    for options on copper and aluminium collars;
|
| |  | Swaps on petroleum and coal
    indexes: 613.2 million
    or 2,013,355 metric tons;                                                       
|
| |  | Swaps and forwards on
    power: 107.5 million;                                                                                            
|
| |  | Swaps on gas transmission
    fee: 17,6 million
    or 1 billion cubic meters per year;                                                    
|
| |  | Contracts for
    differences: 7,638 million; and                                                                                          
|
| |  | Congestion
    contracts: 0 million.                                                                                                       





| |   |                                                                                         
| | - | ----------------------------------------------------------------------------------------
| |  | Futures on commodities: no contracts;                                                   
|
| |  | Options on commodities: no contracts;                                                   
|
| |  | Swaps on petroleum and coal
    indexes: 537.56 million
    or 4,133,000 metric tons;  
|
| |  | Swaps on gas transmission
    fee: 17.9 million
    or 1 billion cubic meters per year;
|
| |  | Contracts for
    differences: 5,133 million; and                                      
|
| |  | Congestion
    contracts: 118 million.                                                 

161



---



##### Table of Contents





|                                               |             |                       |        |         |      |  |        |        |  
|---------------------------------------------- | ----------- | --------------------- | ------ | ------- | ---- |  | ------ | ------ | -
|                                               |             | As of December 31     |       
|                                               |             |                       |       
|                                               |             | 2005                  |        |         | 2004 | 
|                                               |             |                       |        |         |      | 
|                                               |             | Fair Value            |       
|                                               |             | (In millions of euro) |       
|Futures on commodities                         |             |                       | 16.30  |         |      |  | 0.00   |       
|                                               | Assets      |                       |        | 17.50   |      |  |        | 0.00   |  
|                                               | Liabilities |                       |        | (1.20   | )    |  |        | 0.00   |  
|Options on commodities                         |             |                       | 1.86   |         |      |  | 0.00   |       
|                                               | Assets      |                       |        | 1.86    |      |  |        | 0.00   |  
|                                               | Liabilities |                       |        | 0.00    |      |  |        | 0.00   |  
|Swaps on petroleum and coal indexes            |             |                       | (12.90 | )       |      |  | 12.20  |       
|                                               | Assets      |                       |        | 10.60   |      |  |        | 22.30  |  
|                                               | Liabilities |                       |        | (23.50  | )    |  |        | (10.10 | )
|Swaps and forwards on power                    |             |                       | (1.05  | )       |      |  | 2.34   |       
|                                               | Assets      |                       |        | 397.25  |      |  |        | 35.61  |  
|                                               | Liabilities |                       |        | (398.31 | )    |  |        | (33.27 | )
|Swaps on gas transmission fee                  |             |                       | (12.20 | )       |      |  | (11.70 | )     
|                                               | Assets      |                       |        | 0.00    |      |  |        | 0.00   |  
|                                               | Liabilities |                       |        | (12.20  | )    |  |        | (11.70 | )
|Contracts for difference with the Single Buyer |             |                       | 100.00 |         |      |  | 0.00   |       
|                                               | Assets      |                       |        | 100.00  |      |  |        | 0.00   |  
|                                               | Liabilities |                       |        | 0.0     |      |  |        | 0.00   |  
|Total                                          |             |                       | 92.00  |         |      |  | 2.84   |       
|                                               | Assets      |                       |        | 527.21  |      |  |        | 24.64  |  
|                                               | Liabilities |                       |        | (435.21 | )    |  |        | (21.80 | )



   






162



---



##### Table of Contents



   











|         |                                                       
|-------- | ------------------------------------------------------
|ITEM 12. | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES






PART II







|         |                                               
|-------- | ----------------------------------------------
|ITEM 13. | DEFAULTS, DIVIDENDS AVERAGES AND DELINQUENCIES








|         |                                                                          
|-------- | -------------------------------------------------------------------------
|ITEM 14. | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND
    PROCEEDS








|         |                        
|-------- | -----------------------
|ITEM 15. | CONTROLS AND PROCEDURES








|         |           
|-------- | ----------
|ITEM 16. | [RESERVED]






|          |                                 
|--------- | --------------------------------
|ITEM 16A. | AUDIT COMMITTEE FINANCIAL EXPERT



163



---



##### Table of Contents



20-F. dirigente
generale







|          |               
|--------- | --------------
|ITEM 16B. | CODE OF ETHICS

20-F 6-K.







|          |                                       
|--------- | --------------------------------------
|ITEM 16C. | PRINCIPAL ACCOUNTANT FEES AND SERVICES



| |                         
| | ------------------------
| | Audit and Non-Audit Fees



|                   |            |              |     |     |      |  |     |     | 
|------------------ | ---------- | ------------ | --- | --- | ---- |  | --- | --- | 
|                   |            | Year Ended   |    
|                   |            | December 31, |    
|                   |            |              |    
|                   |            | 2004         |     |     | 2005 | 
|                   |            |              |     |     |      | 
|                   |            | (In millions |    
|                   |            | of euro)     |    
|Audit fees         |            |              | 2.0 |     |      |  | 4.1 |    
|Audit-related fees |            |              | 1.3 |     |      |  | 2.0 |    
|Tax fees           |            |              | 0.0 |     |      |  | 0.0 |    
|Other fees         |            |              | 0.0 |     |      |  | 0.0 |    
|                   |            |              |     |     |      | 
|                   | Total fees |              |     | 3.3 |      |  |     | 6.1 | 







| |                                                         
| | --------------------------------------------------------
| | Audit Committee Pre-Approval Policies and
    Procedures





164



---



##### Table of Contents










|          |                                                           
|--------- | ----------------------------------------------------------
|ITEM 16D. | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES










|          |                                                                           
|--------- | --------------------------------------------------------------------------
|ITEM 16E. | PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
    PURCHASERS






PART III







|         |                     
|-------- | --------------------
|ITEM 17. | FINANCIAL STATEMENTS



165



---



##### Table of Contents








|         |                     
|-------- | --------------------
|ITEM 18. | FINANCIAL STATEMENTS

INDEX TO FINANCIAL STATEMENTS


|                                                                                                              |  |  |       | 
|------------------------------------------------------------------------------------------------------------- |  |  | ----- | 
|Report of Independent Registered Public Accounting Firm                                                       |  |  | F-1   | 
|Consolidated Statements of Income for the years ended
    December 31, 2005 and 2004                          |  |  | F-2   | 
|Consolidated Balance Sheets as of December 31, 2005 and 2004                                                  |  |  | F-3   | 
|Consolidated Statements of Changes in Shareholders Equity
    for the years ended December 31, 2005 and 2004 |  |  | F-5   | 
|Consolidated Statements of Cash Flows for the years ended
    December 31, 2005 and 2004                      |  |  | F-6   | 
|Notes to Consolidated Financial Statements                                                                    |  |  | F-7   | 
|Report of Independent Registered Public Accounting Firm                                                       |  |  | F-109 | 

166



---



##### Table of Contents



INDEX TO EXHIBITS FILED WITH THIS REPORT







|         |         
|-------- | --------
|ITEM 19. | EXHIBITS



333-6868) F-6 F-6 333-132014) F-6





















20-F


20-F


167



---



##### Table of Contents



Report of Independent Registered Public Accounting Firm


To the Shareholders of














KPMG S.p.A.


Rome, Italy


June 26, 2006


F-1



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES




CONSOLIDATED STATEMENTS OF INCOME


FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004


|                                                                                  |  |      |        |                    |  |          |           |   |  |      |        |    |  |  |        |  
|--------------------------------------------------------------------------------- |  | ---- | ------ | ------------------ |  | -------- | --------- | - |  | ---- | ------ | -- |  |  | ------ | -
|                                                                                  |  |      |        | 2005               |  |          | 2004      |   |  | 2005 |       
|                                                                                  |  |      |        |                    |  |          |           |   |  |      |       
|                                                                                  |  | Note |        |                    |  |          | (millions |  
|                                                                                  |  |      |        | (millions of euro) |  |          | of U.S.   |  
|                                                                                  |  |      |        |                    |  | dollars) |          
|Operating Revenues                                                                |  |      | 2, 6   |                    |  |          |           |   |  |      |        |    |  |  |        |  
|Revenues from sales and services                                                  |  |      | 6.a    |                    |  |          | 32,272    |   |  |      | 28,658 |    |  |  | 38,217 |  
|Other revenues                                                                    |  |      | 6.b    |                    |  |          | 1,787     |   |  |      | 2,353  |    |  |  | 2,116  |  
|                                                                                  |  |      |        |                    |  |          |           |   |  |      |        |   
|                                                                                  |  |      |        |                    |  |          | 34,059    |   |  |      | 31,011 |    |  |  | 40,333 |  
|Operating expenses:                                                               |  |      | 7      |                    |  |          |           |   |  |      |        |    |  |  |        |  
|Raw materials and consumables                                                     |  |      | 7.a    |                    |  |          | 20,633    |   |  |      | 16,800 |    |  |  | 24,434 |  
|Services and rentals                                                              |  |      | 7.b    |                    |  |          | 3,057     |   |  |      | 3,106  |    |  |  | 3,620  |  
|Personnel                                                                         |  |      | 7.c    |                    |  |          | 2,762     |   |  |      | 3,224  |    |  |  | 3,271  |  
|Depreciation, amortization and impairment                                         |  |      | 2, 7.d |                    |  |          | 2,207     |   |  |      | 2,201  |    |  |  | 2,614  |  
|Other operating expenses                                                          |  |      | 7.e    |                    |  |          | 911       |   |  |      | 783    |    |  |  | 1,079  |  
|Capitalized expenses                                                              |  |      | 7.f    |                    |  |          | (1,049    | ) |  |      | (973   | )  |  |  | (1,242 | )
|                                                                                  |  |      |        |                    |  |          |           |   |  |      |        |   
|                                                                                  |  |      |        |                    |  |          | 28,521    |   |  |      | 25,141 |    |  |  | 33,776 |  
|Operating income                                                                  |  |      |        |                    |  |          | 5,538     |   |  |      | 5,870  |    |  |  | 6,557  |  
|                                                                                  |  |      |        |                    |  |          |           |   |  |      |        |   
|Financial income (expense) and income (expense) from investments                  |  |      | 8      |                    |  |          | (714      | ) |  |      | (827   | )  |  |  | (846   | )
|Income (expense) from investments accounted for using the equity
    method       |  |      | 9      |                    |  |          | (30       | ) |  |      | (25    | )  |  |  | (36    | )
|                                                                                  |  |      |        |                    |  |          |           |   |  |      |        |   
|                                                                                  |  |      |        |                    |  |          | (744      | ) |  |      | (852   | )  |  |  | (882   | )
|Income before taxes                                                               |  |      |        |                    |  |          | 4,794     |   |  |      | 5,018  |    |  |  | 5,675  |  
|Income taxes                                                                      |  |      | 2, 10  |                    |  |          | 1,934     |   |  |      | 2,116  |    |  |  | 2,290  |  
|Income from continuing operations                                                 |  |      |        |                    |  |          | 2,860     |   |  |      | 2,902  |    |  |  | 3,385  |  
|Income from discontinued operations, net of tax                                   |  |      | 2, 5   |                    |  |          | 1,272     |   |  |      | (155   | )  |  |  | 1,506  |  
|Income for the period (shareholders of Parent Company and
    minority interests) |  |      |        |                    |  |          | 4,132     |   |  |      | 2,747  |    |  |  | 4,891  |  
|Attributable to minority interests                                                |  |      |        |                    |  |          | 237       |   |  |      | 116    |    |  |  | 280    |  
|Attributable to shareholders of Parent Company                                    |  |      |        |                    |  |          | 3,895     |   |  |      | 2,631  |    |  |  | 4,611  |  
|Earnings per share (euro)                                                         |  |      |        |                    |  |          | 0.67      |   |  |      | 0.45   |    |  |  | 0.79   |  
|Diluted earnings per share (euro)                                                 |  |      |        |                    |  |          | 0.67      | * |  |      | 0.45   | *  |  |  | 0.79   |  
|Earnings from continuing operations per share (euro)                              |  |      |        |                    |  |          | 0.46      |   |  |      | 0.48   |    |  |  | 0.54   |  
|Diluted earnings from continuing operations per share (euro)                      |  |      |        |                    |  |          | 0.46      | * |  |      | 0.48   | *  |  |  | 0.54   |  
|Earnings from discontinued operations per share (euro)                            |  |      |        |                    |  |          | 0.21      |   |  |      | (0.03  | )  |  |  | 0.25   |  
|Diluted earnings from discontinued operations per share (euro)                    |  |      |        |                    |  |          | 0.21      | * |  |      | (0.03  | )* |  |  | 0.25   |  






|    |                                                                                                                                                                                               
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(*) | Calculated by adjusting the average number of ordinary shares
    for the period (6,171,352,406) to take account of the diluting
    effect of stock options for the period (euro 29 million),



F-2



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES




CONSOLIDATED BALANCE SHEETS


AS OF DECEMBER 31, 2005 AND 2004


|                                                  |  |      |          |                    |  |          |           |  |  |      |        |  |  |  |        | 
|------------------------------------------------- |  | ---- | -------- | ------------------ |  | -------- | --------- |  |  | ---- | ------ |  |  |  | ------ | 
|                                                  |  |      |          | 2005               |  |          | 2004      |  |  | 2005 |       
|                                                  |  |      |          |                    |  |          |           |  |  |      |       
|                                                  |  | Note |          |                    |  |          | (millions | 
|                                                  |  |      |          | (millions of euro) |  |          | of U.S.   | 
|                                                  |  |      |          |                    |  | dollars) |          
|ASSETS                                           
|Current assets                                    |  |      | 11       |                    |  |          |           |  |  |      |        |  |  |  |        | 
|Inventories                                       |  |      | 2, 11.a  |                    |  |          | 884       |  |  |      | 1,345  |  |  |  | 1,047  | 
|Trade receivables                                 |  |      | 11.b     |                    |  |          | 8,316     |  |  |      | 8,027  |  |  |  | 9,848  | 
|Tax receivables                                   |  |      | 11.c     |                    |  |          | 789       |  |  |      | 854    |  |  |  | 934    | 
|Current financial assets                          |  |      | 11.d     |                    |  |          | 569       |  |  |      | 509    |  |  |  | 674    | 
|Cash and cash equivalents                         |  |      | 2, 11.e  |                    |  |          | 476       |  |  |      | 331    |  |  |  | 564    | 
|Other current assets                              |  |      | 11.f     |                    |  |          | 1,712     |  |  |      | 2,466  |  |  |  | 2,026  | 
|                                                  |  |      |          |                    |  |          |           |  |  |      |        | 
|                                                  |  |      |          |                    |  |          | 12,746    |  |  |      | 13,532 |  |  |  | 15,093 | 
|Non-current assets                                |  |      | 12       |                    |  |          |           |  |  |      |        |  |  |  |        | 
|Property, plant and equipment                     |  |      | 12.a     |                    |  |          | 30,188    |  |  |      | 36,702 |  |  |  | 35,749 | 
|Intangible assets                                 |  |      | 12.b     |                    |  |          | 2,182     |  |  |      | 10,071 |  |  |  | 2,584  | 
|Deferred tax assets                               |  |      | 12.c     |                    |  |          | 1,778     |  |  |      | 2,953  |  |  |  | 2,106  | 
|Investments accounted for using the equity method |  |      | 2,  12.d |                    |  |          | 1,797     |  |  |      | 190    |  |  |  | 2,128  | 
|Non-current financial assets                      |  |      | 12.e     |                    |  |          | 836       |  |  |      | 1,776  |  |  |  | 990    | 
|Other non-current assets                          |  |      | 12.f     |                    |  |          | 975       |  |  |      | 154    |  |  |  | 1154   | 
|                                                  |  |      |          |                    |  |          |           |  |  |      |        | 
|                                                  |  |      |          |                    |  |          | 37,756    |  |  |      | 51,846 |  |  |  | 44,711 | 
|                                                  |  |      |          |                    |  |          |           |  |  |      |        | 
|TOTAL ASSETS                                      |  |      |          |                    |  |          | 50,502    |  |  |      | 65,378 |  |  |  | 59,804 | 
|                                                  |  |      |          |                    |  |          |           |  |  |      |        | 
|                                                 
|LIABILITIES AND SHAREHOLDERS EQUITY             
|Current liabilities                               |  |      | 13       |                    |  |          |           |  |  |      |        |  |  |  |        | 
|Short-term loans                                  |  |      | 13.a     |                    |  |          | 1,361     |  |  |      | 5,192  |  |  |  | 1,612  | 
|Current portion of long-term loans                |  |      | 14.a     |                    |  |          | 935       |  |  |      | 1,397  |  |  |  | 1,107  | 
|Trade payables                                    |  |      | 13.b     |                    |  |          | 6,610     |  |  |      | 6,818  |  |  |  | 7,828  | 
|Income tax payable                                |  |      |          |                    |  |          | 28        |  |  |      | 99     |  |  |  | 33     | 
|Current financial liabilities                     |  |      | 13.c     |                    |  |          | 294       |  |  |      | 493    |  |  |  | 348    | 
|Other current liabilities                         |  |      | 13.d     |                    |  |          | 4,218     |  |  |      | 4,608  |  |  |  | 4,995  | 
|                                                  |  |      |          |                    |  |          |           |  |  |      |        | 
|                                                  |  |      |          |                    |  |          | 13,446    |  |  |      | 18,607 |  |  |  | 15,923 | 
|Non-current liabilities                           |  |      | 14       |                    |  |          |           |  |  |      |        |  |  |  |        | 
|Long-term loans                                   |  |      | 14.a     |                    |  |          | 10,967    |  |  |      | 20,291 |  |  |  | 12,987 | 
|Post-employment and other employee benefits       |  |      | 14.b     |                    |  |          | 2,662     |  |  |      | 2,910  |  |  |  | 3,152  | 
|Provisions for risks and charges                  |  |      | 14.c     |                    |  |          | 1,267     |  |  |      | 1,404  |  |  |  | 1,500  | 
|Deferred tax liabilities                          |  |      | 14.d     |                    |  |          | 2,464     |  |  |      | 2,512  |  |  |  | 2,918  | 
|Non-current financial liabilities                 |  |      | 14.e     |                    |  |          | 262       |  |  |      | 370    |  |  |  | 310    | 
|Other non-current liabilities                     |  |      | 14.f     |                    |  |          | 18        |  |  |      | 218    |  |  |  | 22     | 
|                                                  |  |      |          |                    |  |          |           |  |  |      |        | 
|                                                  |  |      |          |                    |  |          | 17,640    |  |  |      | 27,705 |  |  |  | 20,889 | 
|                                                  |  |      |          |                    |  |          |           |  |  |      |        | 
|TOTAL LIABILITIES                                 |  |      |          |                    |  |          | 31,086    |  |  |      | 46,312 |  |  |  | 36,812 | 
|                                                  |  |      |          |                    |  |          |           |  |  |      |        | 

F-3



---



##### Table of Contents



|                                                                  |  |      |    |                    |  |          |           |  |  |      |        |   |  |  |        | 
|----------------------------------------------------------------- |  | ---- | -- | ------------------ |  | -------- | --------- |  |  | ---- | ------ | - |  |  | ------ | 
|                                                                  |  |      |    | 2005               |  |          | 2004      |  |  | 2005 |       
|                                                                  |  |      |    |                    |  |          |           |  |  |      |       
|                                                                  |  | Note |    |                    |  |          | (millions | 
|                                                                  |  |      |    | (millions of euro) |  |          | of U.S.   | 
|                                                                  |  |      |    |                    |  | dollars) |          
|Equity attributable to the shareholders of the Parent
    Company |  |      | 15 |                    |  |          |           |  |  |      |        |   |  |  |        | 
|Share capital                                                     |  |      |    |                    |  |          | 6,157     |  |  |      | 6,104  |   |  |  | 7,291  | 
|Other reserves                                                    |  |      |    |                    |  |          | 4,219     |  |  |      | 3,878  |   |  |  | 4,996  | 
|Reserve from measurement of financial instruments                 |  |      |    |                    |  |          | 2         |  |  |      | (229   | ) |  |  | 2      | 
|Retained earnings                                                 |  |      |    |                    |  |          | 5,953     |  |  |      | 7,583  |   |  |  | 7,050  | 
|Net income for the year*                                          |  |      |    |                    |  |          | 2,726     |  |  |      | 617    |   |  |  | 3,228  | 
|                                                                  |  |      |    |                    |  |          |           |  |  |      |        |  
|                                                                  |  |      |    |                    |  |          | 19,057    |  |  |      | 17,953 |   |  |  | 22,567 | 
|                                                                  |  |      |    |                    |  |          |           |  |  |      |        |  
|Equity attributable to minority interests                         |  |      |    |                    |  |          | 359       |  |  |      | 1,113  |   |  |  | 425    | 
|                                                                  |  |      |    |                    |  |          |           |  |  |      |        |  
|TOTAL SHAREHOLDERS EQUITY                                        |  |      |    |                    |  |          | 19,416    |  |  |      | 19,066 |   |  |  | 22,992 | 
|                                                                  |  |      |    |                    |  |          |           |  |  |      |        |  
|TOTAL LIABILITIES AND SHAREHOLDERS EQUITY                        |  |      |    |                    |  |          | 50,502    |  |  |      | 65,378 |   |  |  | 59,804 | 








F-4



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES




CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS
EQUITY


FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2005


|                                                       |  |                                                                           |       |              |         |  |              |         |               |     |           |             |                 |          |        |        |            |              |        |              |              |  |         |   |  |           |      |   |             |  |        |       |  |  |        |   |  |  |       |   |  |  |        |  
|------------------------------------------------------ |  | ------------------------------------------------------------------------- | ----- | ------------ | ------- |  | ------------ | ------- | ------------- | --- | --------- | ----------- | --------------- | -------- | ------ | ------ | ---------- | ------------ | ------ | ------------ | ------------ |  | ------- | - |  | --------- | ---- | - | ----------- |  | ------ | ----- |  |  | ------ | - |  |  | ----- | - |  |  | ------ | -
|                                                       |  | Share Capital and Reserves Attributable to the Shareholders of the Parent |       |              |         |  |              |         |              
|                                                       |  | Company                                                                   |       |              |         |  |              |         |              
|                                                       |  |                                                                           |       |              |         |  |              |         |              
|                                                       |  |                                                                           |       | Translation  |         |  |              |         |               |     |           |             |                
|                                                       |  |                                                                           |       | of Financial |         |  |              |         | Equity        |     |           |             |                 |         
|                                                       |  |                                                                           |       | Statements   |         |  | Reserve from |         |               | Net |           |             | Attributable to |          |        | Equity |            |              |       
|                                                       |  |                                                                           |       | Share        |         |  |              |         | in Currencies |     |           | Measurement |                 |          | Income |        |            | Shareholders |        |              | Attributable |  |         |  
|                                                       |  | Share                                                                     |       |              | Premium |  |              | Legal   |               |     | Statutory |             |                 | Retained |        |        | Other Than |              |        | of Financial |              |  | for the |   |  | of Parent |      |   | to Minority |  |        |      
|                                                       |  | Capital                                                                   |       |              | Reserve |  |              | Reserve |               |     | Reserves  |             |                 | Earnings |        |        | Euro       |              |        | Instruments  |              |  | Year    |   |  | Company   |      |   | Interests   |  |        | Total | 
|                                                       |  |                                                                           |       |              |         |  |              |         |               |     |           |             |                 |          |        |        |            |              |        |              |              |  |         |   |  |           |      |   |             |  |        |       | 
|                                                       |  | (millions of euro)                                                        |      
|January 1, 2004                                        |  |                                                                           | 6,063 |              |         |  |             |         |               |     | 1,453     |             |                 |          | 2,215  |        |            |              | 7,382  |              |              |  | 18      |   |  |           | (200 | ) |             |  | 2,509  |       |  |  | 19,440 |   |  |  | 181   |   |  |  | 19,621 |  
|Exercise of stock options                              |  |                                                                           | 41    |              |         |  | 208          |         |               |     |          |             |                 |          |       |        |            |              | (8     | )            |              |  |        |   |  |           |     |   |             |  |       |       |  |  | 241    |   |  |  |      |   |  |  | 241    |  
|Other changes                                          |  |                                                                           |      |              |         |  |             |         |               |     |          |             |                 |          |       |        |            |              | (105   | )            |              |  |        |   |  |           |     |   |             |  |       |       |  |  | (105   | ) |  |  | 816   |   |  |  | 711    |  
|Allocation of income                                   |  |                                                                           |      |              |         |  |             |         |               |     |          |             |                 |          |       |        |            |              | 314    |              |              |  |        |   |  |           |     |   |             |  | (314   | )     |  |  |       |   |  |  |      |   |  |  |       |  
|Dividends                                              |  |                                                                           |      |              |         |  |             |         |               |     |          |             |                 |          |       |        |            |              |       |              |              |  |        |   |  |           |     |   |             |  | (2,195 | )     |  |  | (2,195 | ) |  |  |      |   |  |  | (2,195 | )
|Interim dividends                                      |  |                                                                           |      |              |         |  |             |         |               |     |          |             |                 |          |       |        |            |              |       |              |              |  |        |   |  |           |     |   |             |  | (2,014 | )     |  |  | (2,014 | ) |  |  |      |   |  |  | (2,014 | )
|Net income for the year recognized in equity           |  |                                                                           |      |              |         |  |             |         |               |     |          |             |                 |          |       |        |            |              |       |              |              |  | (16     | ) |  |           | (29  | ) |             |  |       |       |  |  | (45    | ) |  |  |      |   |  |  | (45    | )
|Net income for the year recognized in income statement |  |                                                                           |      |              |         |  |             |         |               |     |          |             |                 |          |       |        |            |              |       |              |              |  |        |   |  |           |     |   |             |  | 2,631  |       |  |  | 2,631  |   |  |  | 116   |   |  |  | 2,747  |  
|December 31, 2004                                      |  |                                                                           | 6,104 |              |         |  | 208          |         |               |     | 1,453     |             |                 |          | 2,215  |        |            |              | 7,583  |              |              |  | 2       |   |  |           | (229 | ) |             |  | 617    |       |  |  | 17,953 |   |  |  | 1,113 |   |  |  | 19,066 |  
|Exercise of stock options                              |  |                                                                           | 53    |              |         |  | 303          |         |               |     |          |             |                 |          |       |        |            |              | (17    | )            |              |  |        |   |  |           |     |   |             |  |       |       |  |  | 339    |   |  |  |       |   |  |  | 339    |  
|Change in scope of consolidation                       |  |                                                                           |      |              |         |  |             |         |               |     |          |             |                 |          |       |        |            |              |       |              |              |  |        |   |  |           |     |   |             |  |       |       |  |  |       |   |  |  | (892  | ) |  |  | (892   | )
|Other changes                                          |  |                                                                           |      |              |         |  |             |         |               |     |          |             |                 |          |       |        |            |              | (16    | )            |              |  |        |   |  |           |     |   |             |  |       |       |  |  | (16    | ) |  |  | (7    | ) |  |  | (23    | )
|Dividends                                              |  |                                                                           |      |              |         |  |             |         |               |     |          |             |                 |          |       |        |            |              | (1,597 | )            |              |  |        |   |  |           |     |   |             |  | (617   | )     |  |  | (2,214 | ) |  |  | (89   | ) |  |  | (2,303 | )
|Interim dividends                                      |  |                                                                           |      |              |         |  |             |         |               |     |          |             |                 |          |       |        |            |              |       |              |              |  |        |   |  |           |     |   |             |  | (1,169 | )     |  |  | (1,169 | ) |  |  |      |   |  |  | (1,169 | )
|Net income for the year recognized in equity           |  |                                                                           |      |              |         |  |             |         |               |     |          |             |                 |          |       |        |            |              |       |              |              |  | 38      |   |  |           | 231  |   |             |  |       |       |  |  | 269    |   |  |  | (3    | ) |  |  | 266    |  
|Net income for the year recognized in income statement |  |                                                                           |      |              |         |  |             |         |               |     |          |             |                 |          |       |        |            |              |       |              |              |  |        |   |  |           |     |   |             |  | 3,895  |       |  |  | 3,895  |   |  |  | 237   |   |  |  | 4,132  |  
|December 31, 2005                                      |  |                                                                           | 6,157 |              |         |  | 511          |         |               |     | 1,453     |             |                 |          | 2,215  |        |            |              | 5,953  |              |              |  | 40      |   |  |           | 2    |   |             |  | 2,726  |       |  |  | 19,057 |   |  |  | 359   |   |  |  | 19,416 |  
|(millions of U.S. dollars)                            
|December 31, 2005                                      |  |                                                                           | 7,291 |              |         |  | 605          |         |               |     | 1,721     |             |                 |          | 2,623  |        |            |              | 7,050  |              |              |  | 47      |   |  |           | 2    |   |             |  | 3,228  |       |  |  | 22,567 |   |  |  | 425   |   |  |  | 22,992 |  



F-5



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES CONSOLIDATED




STATEMENTS OF CASH FLOWS


FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004


|                                                                                        |  |                    |        |           |         |  |        |      |  |  |        |  
|--------------------------------------------------------------------------------------- |  | ------------------ | ------ | --------- | ------- |  | ------ | ---- |  |  | ------ | -
|                                                                                        |  | 2005               |        |           | 2004    |  |        | 2005 | 
|                                                                                        |  |                    |        |           |         |  |        |      | 
|                                                                                        |  |                    |        | (millions |        
|                                                                                        |  | (millions of euro) |        |           | of U.S. | 
|                                                                                        |  |                    |        | dollars)  |        
|Income for the period (shareholders of Parent Company and
    minority interests)       |  |                    | 4,132  |           |         |  | 2,747  |      |  |  | 4,893  |  
|Adjustments for:                                                                        |  |                    |        |           |         |  |        |      |  |  |        |  
|Amortization of intangible assets                                                       |  |                    | 308    |           |         |  | 491    |      |  |  | 365    |  
|Depreciation of property, plant and equipment                                           |  |                    | 2,561  |           |         |  | 2,994  |      |  |  | 3,033  |  
|Exchange rate gains and losses                                                          |  |                    | 22     |           |         |  | (1     | )    |  |  | 26     |  
|Provisions                                                                              |  |                    | 781    |           |         |  | 1,042  |      |  |  | 925    |  
|Financial (income)/expense                                                              |  |                    | 808    |           |         |  | 1,001  |      |  |  | 957    |  
|Income taxes                                                                            |  |                    | 2,147  |           |         |  | 1,498  |      |  |  | 2,542  |  
|(Gains)/losses and other non-monetary items                                             |  |                    | (1,295 | )         |         |  | 1,081  |      |  |  | (1,534 | )
|                                                                                        |  |                    |        |           |         |  |        |      | 
|Cash flows from operating activities before changes in net
    working capital          |  |                    | 9,464  |           |         |  | 10,853 |      |  |  | 11,207 |  
|Increase/(Decrease) in provisions including termination benefits                        |  |                    | (814   | )         |         |  | (1,078 | )    |  |  | (964   | )
|(Increase)/ Decrease in inventories                                                     |  |                    | 125    |           |         |  | (39    | )    |  |  | 148    |  
|(Increase)/ Decrease in trade receivables                                               |  |                    | (1,919 | )         |         |  | (768   | )    |  |  | (2,272 | )
|(Increase)/ Decrease in financial and non-financial
    assets/liabilities              |  |                    | 250    |           |         |  | (1,546 | )    |  |  | 296    |  
|Increase/(Decrease) in trade payables                                                   |  |                    | 1,265  |           |         |  | 819    |      |  |  | 1,498  |  
|Interest income and other financial income collected                                    |  |                    | 202    |           |         |  | 341    |      |  |  | 239    |  
|Interest expense and other financial expense paid                                       |  |                    | (1,065 | )         |         |  | (1,473 | )    |  |  | (1,261 | )
|Income taxes paid                                                                       |  |                    | (1,815 | )         |         |  | (2,274 | )    |  |  | (2,149 | )
|                                                                                        |  |                    |        |           |         |  |        |      | 
|Cash flows from operating activities(a)                                                 |  |                    | 5,693  |           |         |  | 4,835  |      |  |  | 6,742  |  
|                                                                                        |  |                    |        |           |         |  |        |      | 
|Investments in property, plant and equipment                                            |  |                    | (3,037 | )         |         |  | (3,538 | )    |  |  | (3,596 | )
|Investments in intangible assets                                                        |  |                    | (220   | )         |         |  | (296   | )    |  |  | (261   | )
|Investments in entities (or business units) less cash and cash
    equivalents acquired |  |                    | (524   | )         |         |  | (126   | )    |  |  | (621   | )
|Disposals of entities (or business units) less cash and cash
    equivalents sold       |  |                    | 4,652  |           |         |  | 1,941  |      |  |  | 5,509  |  
|(Increase)/ Decrease in other investing activities                                      |  |                    | 221    |           |         |  | 66     |      |  |  | 262    |  
|                                                                                        |  |                    |        |           |         |  |        |      | 
|Cash flows from investing/disinvesting activities(b)                                    |  |                    | 1,092  |           |         |  | (1,953 | )    |  |  | 1,293  |  
|                                                                                        |  |                    |        |           |         |  |        |      | 
|New financing                                                                           |  |                    | 1,759  |           |         |  | 3,986  |      |  |  | 2,083  |  
|Repayments and other changes                                                            |  |                    | (5,283 | )         |         |  | (2,947 | )    |  |  | (6,256 | )
|Dividends paid                                                                          |  |                    | (3,472 | )         |         |  | (4,256 | )    |  |  | (4,112 | )
|Increase in share capital and reserves due to the exercise of
    stock options         |  |                    | 339    |           |         |  | 241    |      |  |  | 401    |  
|Capital contributed by minority shareholders                                            |  |                    | 3      |           |         |  | 10     |      |  |  | 4      |  
|                                                                                        |  |                    |        |           |         |  |        |      | 
|Cash flows from financing activities(c)                                                 |  |                    | (6,654 | )         |         |  | (2,966 | )    |  |  | (7,880 | )
|                                                                                        |  |                    |        |           |         |  |        |      | 
|Impact of exchange rate fluctuations on cash and cash
    equivalents(d)                |  |                    | 14     |           |         |  | (5     | )    |  |  | 17     |  
|Increase/(Decrease) in cash and cash equivalents (a+b+c+d)                              |  |                    | 145    |           |         |  | (89    | )    |  |  | 172    |  
|Cash and cash equivalents at beginning of the period                                    |  |                    | 363    |           |         |  | 452    |      |  |  | 430    |  
|Cash and cash equivalents at end of the period(*)                                       |  |                    | 508    |           |         |  | 363    |      |  |  | 602    |  






|    |                                                                                                                                                     
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------
|(*) | Include Euro 28 million and Euro 32 million of other
    securities classified as current assets as of December 31,
    2005 and 2004, respectively.



F-6



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




|    |        
|--- | -------
|(1) | GENERAL





















F-7



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)
















|    |                                                         
|--- | --------------------------------------------------------
|(2) | SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES

Basis of Presentation








F-8



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




Use of estimates




Subsidiaries




Associated companies






Joint ventures




Special Purpose Entity




F-9



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Consolidation procedures








Translation of foreign currency items








Translation of financial statements denominated in a foreign
currency






Business combinations






Property, plant and equipment




F-10



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)














|                                              |  |             |              | 
|--------------------------------------------- |  | ----------- | ------------ | 
|                                              |  | Useful Life |             
|                                              |  |             |             
|Civil buildings                               |  |             | 40 years     | 
|Hydroelectric power plants(1)                 |  |             | 40 years     | 
|Thermoelectric power plants(1)(2)             |  |             | 40 years     | 
|Geothermal power plants(3)                    |  |             | 20 years     | 
|Alternative energy power plants(4)            |  |             | 20 years     | 
|Transport lines                               |  |             | 40 years     | 
|Transformation plant                          |  |             | 32-42 years  | 
|Medium- and low-voltage distribution networks |  |             | 30-40 years  | 
|Gas distribution networks and meters          |  |             | 25-50 years  | 
|Telecommunications systems and networks       |  |             | 5.5-20 years | 
|Industrial and commercial equipment           |  |             | 4 years      | 






| |     |                                                                                                                                                         
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | Excluding assets to be relinquished at end of concession, which
    are depreciated over the duration of the concession if shorter
    than useful life.



|      |                                                                                                                                                                        
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2-4) | Useful life as from January 1, 2005; previously it was
    equal to (2) 20 years; (3) 12.5 years;
    (4) 21.3 years. For additional details, please see
    note 12.a.







F-11



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)












| |                  
| | -----------------
| | Intangible assets







| |                  
| | -----------------
| | Impairment losses









F-12



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)










Inventories




Financial instruments




| |                
| | ---------------
| | Debt securities







| |                                                                    
| | -------------------------------------------------------------------
| | Equity investments in other entities and other financial
    assets







| |                  
| | -----------------
| | Trade receivables







| |                          
| | -------------------------
| | Cash and cash equivalents



F-13



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






| |               
| | --------------
| | Trade payables





| |                      
| | ---------------------
| | Financial liabilities





| |                                 
| | --------------------------------
| | Derivative financial instruments











Employee benefits






Share-based payments






F-14



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






Provisions for risks and charges






2 2


Grants










Revenues






| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | revenues from the sale of goods are recognized when the
    significant risks and rewards of ownership are transferred to
    the buyer;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| |  | revenues from the sale and transport of electricity and gas are
    recognized when the supply or service is provided, 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 components
    established by the Electricity and Gas Authority or the
    corresponding foreign authorities during the applicable period.
    Specifically, the Energy Authority in 2004 established a price
    equalizing mechanism intended to minimize the effects of a
    timing discrepancy in the setting of prices distributors pay to
    the

F-15



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   | Single Buyer for electricity to be distributed on the regulated
    market and the prices that distributors may charge to end users
    on the regulate market. At the closing date, the Company
    reflects in revenue its best estimate of costs incurred by the
    Single Buyer not yet reflected in the electricity sale price to
    end users;                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| |  | revenues from the rendering of services are recognized in line
    with the stage of completion of the services;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| |  | the connection fees related to the electricity distribution are
    considered as standalone transaction and all other services are
    paid for separately; based on this assumption such fees are
    recognized up-front as revenues, since no further obligation for
    the Company exists and all other service are paid for separately;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|
| |  | revenues for the telecommunications sector from traffic,
    interconnections and roaming are recorded according to the usage
    by customers and telephone operators calculated on an accrual
    basis. Such revenues include the amount relating to the access
    to and use of the Companys network by customers and other
    domestic and international telephone operators. Revenues from
    the sale of rechargeable telephone cards are recorded solely for
    the amount corresponding to prepaid traffic effectively used by
    customers during the year. The prepaid traffic not yed used as
    of balance sheet date is recognized as deferred
    income. Revenues from the sale of mobile and fixed
    telephones and related accessories are recorded at the time of
    the transfer of ownership.

Financial income and expense




Dividends






Income taxes










Discontinued operations and non-current assets held for
sale




F-16



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




Risk management












| |   |                                                                                                                                                                                                                                            
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | cash flow hedges, related to hedging the risk of changes in the
    cash flows on certain long-term floating-rate loans;                                                                                                                   
|
| |  | fair value hedges, related to hedging the risk of changes in the
    fair value of fixed-rate liabilities;                                                                                                                                 
|
| |  | trading derivatives, related to hedging interest and exchange
    rate risk and commodity risk but which do not qualify for
    recognition under IAS 39 as hedges of specific assets,
    liabilities, commitments or future transactions.





Interest rate risk








F-17



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|     |    |  |      |  |    |      |  |  |      |  |  |      |    |  |        |  |    |  |  |  |    | 
|---- | -- |  | ---- |  | -- | ---- |  |  | ---- |  |  | ---- | -- |  | ------ |  | -- |  |  |  | -- | 
|2006 |    |  | 2007 |  |    | 2008 |  |  | 2009 |  |  | 2010 |    |  | Beyond | 
|     |    |  |      |  |    |      |  |  |      |  |  |      |    |  |        | 
|     | 62 |  |      |  | 45 |      |  |  | 41   |  |  |      | 25 |  |        |  | 21 |  |  |  | 91 | 

Exchange rate risk






Commodity risk














Concentrations of Risk




F-18



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






| |                 
| | ----------------
| | Tariff Structure







F-19



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                      
| | ---------------------
| | Increased Competition









| |   |                                                                                                                                                                                                       
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | An increase in bilateral contracts between its competitors and
    final customers;                                                                                                                   
|
| |  | Regulations limiting each operators access to
    international electricity sources to a maximum percentage of
    available interconnection capacity; and                                           
|
| |  | The construction of new generation facilities by its competitors
    and the development of new interconnection lines that would
    increase the volume of electricity that may be imported in Italy.



|    |                                      
|--- | -------------------------------------
|(3) | CHANGES IN THE SCOPE OF CONSOLIDATION





| |   |                                                                                                                                                                                  
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the sale of NewReal (real estate sector) on July 14, 2004;                                                                                                                       
|
| |  | the acquisition of controlling investments in Ottogas Rete and
    Ottogas Vendita (distribution and sale of natural gas to
    end-users) on September 15, 2004;                
|
| |  | the acquisition of controlling investments in Italgestioni and
    Italgestioni Gas (distribution and sale of natural gas to
    end-users) on December 14, 2004;                
|
| |  | the acquisition of controlling investments in Electrica Banat
    and Electrica Dobrogea (electricity distribution and sales in
    Romania) on April 28, 2005;                  
|
| |  | the disposal of 62.75% of Wind on August 11, 2005 and its
    deconsolidation, with the reclassification of the remaining
    stake of 37.25% under non-current financial assets;
|
| |  | the disposal of 43.85% of Terna and its deconsolidation as from
    September 15, 2005.                                                                                          

F-20



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                                                          |  |                    |      |  
|------------------------------------------------------------------------- |  | ------------------ | ---- | -
|                                                                          |  | (Millions of euro) |     
|                                                                          |  |                    |     
|Property, plant and equipment                                             |  |                    | 305  |  
|Intangible assets                                                         |  |                    | 3    |  
|Trade receivables and inventories                                         |  |                    | 57   |  
|Cash and cash equivalents and other current assets                        |  |                    | 133  |  
|Total assets                                                              |  |                    | 498  |  
|Trade payables                                                            |  |                    | (61  | )
|Other financial liabilities and other current liabilities                 |  |                    | (91  | )
|Other provisions and other payables                                       |  |                    | (191 | )
|Total liabilities                                                         |  |                    | (343 | )
|                                                                          |  |                    |     
|Total net assets acquired                                                 |  |                    | 155  |  
|Negative goodwill                                                         |  |                    | (24  | )
|                                                                          |  |                    |     
|Total consideration paid and capital increase at the
    acquisition date |  |                    | 131  |  
|of which to current financial liabilities                                 |  |                    | (15  | )
|                                                                          |  |                    |     
|CASH FLOW AT THE ACQUISITION DATE                                         |  |                    | 116  |  





|    |                    
|--- | -------------------
|(4) | SEGMENT INFORMATION





F-21



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                                                                                               |  |                       |        |  |                         |  |        |            |  |  |           |  |              |             |       |  |       |  |        |              |  |  |            |   |  |             |     |  |       |  |       |       |  |  |      |   |  |  |       |   |  |  |        |  
|-------------------------------------------------------------------------------------------------------------- |  | --------------------- | ------ |  | ----------------------- |  | ------ | ---------- |  |  | --------- |  | ------------ | ----------- | ----- |  | ----- |  | ------ | ------------ |  |  | ---------- | - |  | ----------- | --- |  | ----- |  | ----- | ----- |  |  | ---- | - |  |  | ----- | - |  |  | ------ | -
|                                                                                                               |  | Continuing Operations |        |  | Discontinued Operations |  |        |           
|                                                                                                               |  |                       |        |  |                         |  |        |           
|                                                                                                               |  | Generation            |        |  | Sales,                  |  |        | Services   |  |  |           |  | Eliminations |             |       |  |       |  |        | Eliminations |  |  |            |   | 
|                                                                                                               |  | and Energy            |        |  | Infrastructure          |  |        | and Other  |  |  |           |  | and          |             |       |  |       |  |        | Telecomm     |  |  | and        |   |  |             |     | 
|                                                                                                               |  | Management            |        |  | and Networks            |  |        | Activities |  |  | Corporate |  |              | Adjustments |       |  | Total |  |        | Transmission |  |  | Unications |   |  | Adjustments |     |  | Total |  |       | Total | 
|                                                                                                               |  |                       |        |  |                         |  |        |            |  |  |           |  |              |             |       |  |       |  |        |              |  |  |            |   |  |             |     |  |       |  |       |       | 
|                                                                                                               |  | (millions of euro)    |       
|Revenues from third parties                                                                                    |  |                       | 12,518 |  |                         |  | 20,081 |            |  |  | 374       |  |              |             | 872   |  |       |  | 214    |              |  |  | 34,059     |   |  |             | 711 |  |       |  | 2,604 |       |  |  | (62  | ) |  |  | 3,253 |   |  |  | 37,312 |  
|Revenues from other divisions                                                                                  |  |                       | 1,697  |  |                         |  | 341    |            |  |  | 1,286     |  |              |             | 231   |  |       |  | (3,555 | )            |  |  |           |   |  |             | 29  |  |       |  | 144   |       |  |  | (173 | ) |  |  |      |   |  |  |       |  
|Total revenues                                                                                                 |  |                       | 14,215 |  |                         |  | 20,422 |            |  |  | 1,660     |  |              |             | 1,103 |  |       |  | (3,341 | )            |  |  | 34,059     |   |  |             | 740 |  |       |  | 2,748 |       |  |  | (235 | ) |  |  | 3,253 |   |  |  | 37,312 |  
|Gross operating margin                                                                                         |  |                       | 3,704  |  |                         |  | 3,737  |            |  |  | 249       |  |              |             | 67    |  |       |  | (12    | )            |  |  | 7,745      |   |  |             | 524 |  |       |  | 903   |       |  |  | (1   | ) |  |  | 1,426 |   |  |  | 9,171  |  
|Amortization, depreciation and impairment losses                                                               |  |                       | 1,139  |  |                         |  | 959    |            |  |  | 95        |  |              |             | 14    |  |       |  |       |              |  |  | 2,207      |   |  |             | 118 |  |       |  | 736   |       |  |  |     |   |  |  | 854   |   |  |  | 3,061  |  
|Operating income                                                                                               |  |                       | 2,565  |  |                         |  | 2,778  |            |  |  | 154       |  |              |             | 53    |  |       |  | (12    | )            |  |  | 5,538      |   |  |             | 406 |  |       |  | 167   |       |  |  | (1   | ) |  |  | 572   |   |  |  | 6,110  |  
|Net financial income (expense) and income (expense) from
    investments accounted for using the equity method |  |                       |       |  |                         |  |       |            |  |  |          |  |              |             |      |  |       |  |       |              |  |  | (744       | ) |  |             |    |  |       |  |      |       |  |  |     |   |  |  | (240  | ) |  |  | (984   | )
|Income taxes                                                                                                   |  |                       |       |  |                         |  |       |            |  |  |          |  |              |             |      |  |       |  |       |              |  |  | 1,934      |   |  |             |    |  |       |  |      |       |  |  |     |   |  |  | 213   |   |  |  | 2,147  |  
|Net income before capital gains                                                                                |  |                       |       |  |                         |  |       |            |  |  |          |  |              |             |      |  |       |  |       |              |  |  | 2,860      |   |  |             |    |  |       |  |      |       |  |  |     |   |  |  | 119   |   |  |  | 2,979  |  
|Gains on disposal of assets                                                                                    |  |                       |       |  |                         |  |       |            |  |  |          |  |              |             |      |  |       |  |       |              |  |  |           |   |  |             |    |  |       |  |      |       |  |  |     |   |  |  | 1,153 |   |  |  | 1,153  |  
|Net income (Group and minority interests)                                                                      |  |                       |       |  |                         |  |       |            |  |  |          |  |              |             |      |  |       |  |       |              |  |  | 2,860      |   |  |             |    |  |       |  |      |       |  |  |     |   |  |  | 1,272 |   |  |  | 4,132  |  
|                                                                                                               |  |                       |        |  |                         |  |        |            |  |  |           |  |              |             |       |  |       |  |        |              |  |  |            |   |  |             |     |  |       |  |       |       | 
|Operating assets                                                                                               |  |                       | 19,622 |  |                         |  | 23,154 |            |  |  | 2,927     |  |              |             |      |  |       |  | (1,850 | )            |  |  | 43,853     |   |  |             |    |  |       |  |      |       |  |  |     |   |  |  |      |   |  |  | 43,853 |  
|Operating liabilities                                                                                          |  |                       | 4,247  |  |                         |  | 9,298  |            |  |  | 2,377     |  |              |             |      |  |       |  | (1,552 | )            |  |  | 14,370     |   |  |             |    |  |       |  |      |       |  |  |     |   |  |  |      |   |  |  | 14,370 |  
|Capital expenditure                                                                                            |  |                       | 1,027  |  |                         |  | 1,692  |            |  |  | 99        |  |              |             | 11    |  |       |  |       |              |  |  | 2,829      |   |  |             | 142 |  |       |  | 286   |       |  |  |     |   |  |  | 428   |   |  |  | 3,257  |  



|                                                                                                               |  |                       |        |  |                         |  |        |            |  |  |           |  |              |             |       |  |       |  |        |              |  |  |            |   |  |             |       |  |       |  |        |       |  |  |      |   |  |  |        |   |  |  |        |  
|-------------------------------------------------------------------------------------------------------------- |  | --------------------- | ------ |  | ----------------------- |  | ------ | ---------- |  |  | --------- |  | ------------ | ----------- | ----- |  | ----- |  | ------ | ------------ |  |  | ---------- | - |  | ----------- | ----- |  | ----- |  | ------ | ----- |  |  | ---- | - |  |  | ------ | - |  |  | ------ | -
|                                                                                                               |  | Continuing Operations |        |  | Discontinued Operations |  |        |           
|                                                                                                               |  |                       |        |  |                         |  |        |           
|                                                                                                               |  | Generation            |        |  | Sales,                  |  |        | Services   |  |  |           |  | Eliminations |             |       |  |       |  |        | Eliminations |  |  |            |   | 
|                                                                                                               |  | and Energy            |        |  | Infrastructure          |  |        | and Other  |  |  |           |  | and          |             |       |  |       |  |        | Telecomm     |  |  | and        |   |  |             |       | 
|                                                                                                               |  | Management            |        |  | and Networks            |  |        | Activities |  |  | Corporate |  |              | Adjustments |       |  | Total |  |        | Transmission |  |  | Unications |   |  | Adjustments |       |  | Total |  |        | Total | 
|                                                                                                               |  |                       |        |  |                         |  |        |            |  |  |           |  |              |             |       |  |       |  |        |              |  |  |            |   |  |             |       |  |       |  |        |       | 
|                                                                                                               |  | (millions of euro)    |       
|Revenues from third parties                                                                                    |  |                       | 10,070 |  |                         |  | 19,105 |            |  |  | 742       |  |              |             | 1,200 |  |       |  | (106   | )            |  |  | 31,011     |   |  |             | 967   |  |       |  | 4,474  |       |  |  | (2   | ) |  |  | 5,439  |   |  |  | 36,450 |  
|Revenues from other divisions                                                                                  |  |                       | 2,958  |  |                         |  | 149    |            |  |  | 1,052     |  |              |             | 449   |  |       |  | (4,608 | )            |  |  |           |   |  |             | 50    |  |       |  | 253    |       |  |  | (303 | ) |  |  |       |   |  |  |       |  
|Total revenues                                                                                                 |  |                       | 13,028 |  |                         |  | 19,254 |            |  |  | 1,794     |  |              |             | 1,649 |  |       |  | (4,714 | )            |  |  | 31,011     |   |  |             | 1,017 |  |       |  | 4,727  |       |  |  | (305 | ) |  |  | 5,439  |   |  |  | 36,450 |  
|Gross operating margin                                                                                         |  |                       | 3,780  |  |                         |  | 3,530  |            |  |  | 214       |  |              |             | 652   |  |       |  | (105   | )            |  |  | 8,071      |   |  |             | 649   |  |       |  | 1,421  |       |  |  | 14   |   |  |  | 2,084  |   |  |  | 10,155 |  
|Amortization, depreciation and impairment losses                                                               |  |                       | 1,249  |  |                         |  | 837    |            |  |  | 108       |  |              |             | 5     |  |       |  | 2      |              |  |  | 2,201      |   |  |             | 159   |  |       |  | 3,037  |       |  |  | 6    |   |  |  | 3,202  |   |  |  | 5,403  |  
|Operating income                                                                                               |  |                       | 2,531  |  |                         |  | 2,693  |            |  |  | 106       |  |              |             | 647   |  |       |  | (107   | )            |  |  | 5,870      |   |  |             | 490   |  |       |  | (1,616 | )     |  |  | 8    |   |  |  | (1,118 | ) |  |  | 4,752  |  
|Net financial income (expense) and income (expense) from
    investments accounted for using the equity method |  |                       |       |  |                         |  |       |            |  |  |          |  |              |             |      |  |       |  |       |              |  |  | (852       | ) |  |             |      |  |       |  |       |       |  |  |     |   |  |  | (467   | ) |  |  | (1,319 | )
|Income taxes                                                                                                   |  |                       |       |  |                         |  |       |            |  |  |          |  |              |             |      |  |       |  |       |              |  |  | 2,116      |   |  |             |      |  |       |  |       |       |  |  |     |   |  |  | (618   | ) |  |  | 1,498  |  
|Net income before capital gains                                                                                |  |                       |       |  |                         |  |       |            |  |  |          |  |              |             |      |  |       |  |       |              |  |  | 2,902      |   |  |             |      |  |       |  |       |       |  |  |     |   |  |  | (967   | ) |  |  | 1,935  |  
|Gains on disposal of assets                                                                                    |  |                       |       |  |                         |  |       |            |  |  |          |  |              |             |      |  |       |  |       |              |  |  |           |   |  |             |      |  |       |  |       |       |  |  |     |   |  |  | 812    |   |  |  | 812    |  
|Net income (Group and minority interests)                                                                      |  |                       |       |  |                         |  |       |            |  |  |          |  |              |             |      |  |       |  |       |              |  |  | 2,902      |   |  |             |      |  |       |  |       |       |  |  |     |   |  |  | (155   | ) |  |  | 2,747  |  
|                                                                                                               |  |                       |        |  |                         |  |        |            |  |  |           |  |              |             |       |  |       |  |        |              |  |  |            |   |  |             |       |  |       |  |        |       | 
|Operating assets                                                                                               |  |                       | 18,882 |  |                         |  | 20,806 |            |  |  | 3,510     |  |              |             |      |  |       |  | (2,405 | )            |  |  | 40,793     |   |  |             | 4,585 |  |       |  | 12,940 |       |  |  |     |   |  |  | 17,525 |   |  |  | 58,318 |  
|Operating liabilities                                                                                          |  |                       | 3,491  |  |                         |  | 8,285  |            |  |  | 3,981     |  |              |             |      |  |       |  | (3,060 | )            |  |  | 12,697     |   |  |             | 571   |  |       |  | 2,181  |       |  |  |     |   |  |  | 2,752  |   |  |  | 15,449 |  
|Capital expenditure                                                                                            |  |                       | 857    |  |                         |  | 1,711  |            |  |  | 112       |  |              |             | 10    |  |       |  |       |              |  |  | 2,690      |   |  |             | 277   |  |       |  | 868    |       |  |  |     |   |  |  | 1,144  |   |  |  | 3,834  |  



F-22



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                                      |                                         |                    |        |        |      |  |        |        |  
|----------------------------------------------------- | --------------------------------------- | ------------------ | ------ | ------ | ---- |  | ------ | ------ | -
|                                                      |                                         | 2005               |        |        | 2004 | 
|                                                      |                                         |                    |        |        |      | 
|                                                      |                                         | (millions of euro) |       
|Total assets (consolidated financial statements)      |                                         |                    | 50,502 |        |      |  | 65,378 |       
|Non-current financial assets                          |                                         |                    | 2,601  |        |      |  | 358    |       
|Current financial assets                              |                                         |                    | 156    |        |      |  | 57     |       
|Cash and cash equivalents                             |                                         |                    | 476    |        |      |  | 331    |       
|Tax receivables                                       |                                         |                    | 3,416  |        |      |  | 6,314  |       
|Sector assets                                         |                                         |                    | 43,853 |        |      |  | 58,318 |       
| of which:                                           |                                         |                    |        |        |      |  |        |       
|                                                      | Generation and Energy Management        |                    |        | 19,622 |      |  |        | 18,882 |  
|                                                      | Sales, Infrastructure and Networks      |                    |        | 23,154 |      |  |        | 20,806 |  
|                                                      | Other Activities                        |                    |        | 2,927  |      |  |        | 3,510  |  
|                                                      | Corporate, eliminations and adjustments |                    |        | (1,850 | )    |  |        | (2,405 | )
|                                                      | Telecommunications and Transmission     |                    |        |       |      |  |        | 17,525 |  
|                                                      |                                         |                    |        |        |      | 
|Total liabilities (consolidated financial statements) |                                         |                    | 31,086 |        |      |  | 46,312 |       
|Non-current financial liabilities                     |                                         |                    | 262    |        |      |  | 377    |       
|Current financial liabilities                         |                                         |                    | 294    |        |      |  | 463    |       
|Long and short-term loans                             |                                         |                    | 13,262 |        |      |  | 26,905 |       
|Tax liabilities                                       |                                         |                    | 2,898  |        |      |  | 3,118  |       
|Sector liabilities                                    |                                         |                    | 14,370 |        |      |  | 15,449 |       
| of which:                                           |                                         |                    |        |        |      |  |        |       
|                                                      | Generation and Energy Management        |                    |        | 4,247  |      |  |        | 3,491  |  
|                                                      | Sales, Infrastructure and Networks      |                    |        | 9,298  |      |  |        | 8,285  |  
|                                                      | Other Activities                        |                    |        | 2,377  |      |  |        | 3,981  |  
|                                                      | Corporate, eliminations and adjustments |                    |        | (1,552 | )    |  |        | (3,060 | )
|                                                      | Telecommunications and Transmission     |                    |        |       |      |  |        | 2,752  |  



|    |                        
|--- | -----------------------
|(5) | DISCONTINUED OPERATIONS

|                                          |  |                    |        |   |      |  |        |           |  |  |        |  
|----------------------------------------- |  | ------------------ | ------ | - | ---- |  | ------ | --------- |  |  | ------ | -
|                                          |  | 2005               |        |   | 2004 |  |        | 2005-2004 | 
|                                          |  |                    |        |   |      |  |        |           | 
|                                          |  | (millions of euro) |       
|Operating revenues                        |  |                    | 3,253  |   |      |  | 5,439  |           |  |  | (2,186 | )
|Operating expenses                        |  |                    | (2,681 | ) |      |  | (6,557 | )         |  |  | 3,876  |  
|                                          |  |                    |        |   |      |  |        |           | 
|Operating income (losses)                 |  |                    | 572    |   |      |  | (1,118 | )         |  |  | 1,690  |  
|Net financial expense                     |  |                    | (240   | ) |      |  | (467   | )         |  |  | 227    |  
|Income taxes                              |  |                    | (213   | ) |      |  | 618    |           |  |  | (831   | )
|Net income before capital gains           |  |                    | 119    |   |      |  | (967   | )         |  |  | 1,086  |  
|Gains on disposal of assets, net of taxes |  |                    | 1,153  |   |      |  | 812    |           |  |  | 341    |  
|                                          |  |                    |        |   |      |  |        |           | 
|NET INCOME FROM DISCONTINUED OPERATIONS   |  |                    | 1,272  |   |      |  | (155   | )         |  |  | 1,427  |  



F-23



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|                                                                         |  |           |         |  
|------------------------------------------------------------------------ |  | --------- | ------- | -
|                                                                         |  | 2005      |        
|                                                                         |  |           |        
|                                                                         |  | (millions |        
|                                                                         |  | of euro)  |        
|Property, plant and equipment, igoodwill and other intangible
    assets |  |           | (13,922 | )
|Other non-current assets (net)                                           |  |           | 543     |  
|Inventories and trade receivables                                        |  |           | (1,739  | )
|Cash and cash equivalents                                                |  |           | (413    | )
|Other current assets (net)                                               |  |           | 448     |  
|Trade payables, other provisions and other payables                      |  |           | 2,540   |  
|Gross financial debt                                                     |  |           | 8,839   |  
|Net assets sold                                                          |  |           | (3,704  | )
|Gross cash flow                                                          |  |           | (4,869  | )
|Cash and cash equivalents                                                |  |           | 413     |  
|Net cash flow                                                            |  |           | (4,456  | )



|    |                   
|--- | ------------------
|(6) | OPERATING REVENUES



| |                                                                 
| | ----------------------------------------------------------------
| | (6.a) Revenues from sales and services  euro
    32,272 million

|                                                                                                             |  |                    |        |  |      |  |        |           |  |  |       |  
|------------------------------------------------------------------------------------------------------------ |  | ------------------ | ------ |  | ---- |  | ------ | --------- |  |  | ----- | -
|                                                                                                             |  | 2005               |        |  | 2004 |  |        | 2005-2004 | 
|                                                                                                             |  |                    |        |  |      |  |        |           | 
|                                                                                                             |  | (millions of euro) |       
|Revenues from the sale and transport of electricity and
    contributions from Electricity Equalization Fund |  |                    | 29,008 |  |      |  | 25,098 |           |  |  | 3,910 |  
|Revenues from the sale and transport of natural gas to end-users                                             |  |                    | 1,556  |  |      |  | 1,374  |           |  |  | 182   |  
|Revenues from fuel sales                                                                                     |  |                    | 446    |  |      |  | 894    |           |  |  | (448  | )
|Connection fees for the electricity and gas networks                                                         |  |                    | 656    |  |      |  | 657    |           |  |  | (1    | )
|Revenues for contract work in progress                                                                       |  |                    | 290    |  |      |  | 609    |           |  |  | (319  | )
|Other sales and services                                                                                     |  |                    | 44     |  |      |  | 42     |           |  |  | 2     |  
|Net income (charges) from commodity risk management                                                          |  |                    | 272    |  |      |  | (16    | )         |  |  | 288   |  
|                                                                                                             |  |                    |        |  |      |  |        |           | 
|Total                                                                                                        |  |                    | 32,272 |  |      |  | 28,658 |           |  |  | 3,614 |  

start-up,  


F-24



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)










|                                                    |  |                    |      |   |      |  |      |           |  |  |     |  
|--------------------------------------------------- |  | ------------------ | ---- | - | ---- |  | ---- | --------- |  |  | --- | -
|                                                    |  | 2005               |      |   | 2004 |  |      | 2005-2004 | 
|                                                    |  |                    |      |   |      |  |      |           | 
|                                                    |  | (millions of euro) |     
|Income                                              |  |                    |      |   |      |  |      |           |  |  |     |  
|Realized on contracts for differences               |  |                    | 289  |   |      |  |     |           |  |  | 289 |  
|Realized on other contracts                         |  |                    | 113  |   |      |  | 92   |           |  |  | 21  |  
|Total realized income                               |  |                    | 402  |   |      |  | 92   |           |  |  | 310 |  
|Unrealized on contracts for differences             |  |                    | 43   |   |      |  |     |           |  |  | 43  |  
|Unrealized on other contracts                       |  |                    | 48   |   |      |  | 15   |           |  |  | 33  |  
|Total unrealized income                             |  |                    | 91   |   |      |  | 15   |           |  |  | 76  |  
|Total income                                        |  |                    | 493  |   |      |  | 107  |           |  |  | 386 |  
|Charges                                             |  |                    |      |   |      |  |      |           |  |  |     |  
|Realized on other contracts                         |  |                    | (188 | ) |      |  | (103 | )         |  |  | (85 | )
|Total realized charges                              |  |                    | (188 | ) |      |  | (103 | )         |  |  | (85 | )
|Unrealized on other contracts                       |  |                    | (33  | ) |      |  | (20  | )         |  |  | (13 | )
|Total unrealized charges                            |  |                    | (33  | ) |      |  | (20  | )         |  |  | (13 | )
|Total charges                                       |  |                    | (221 | ) |      |  | (123 | )         |  |  | (98 | )
|                                                    |  |                    |      |   |      |  |      |           | 
|NET INCOME (CHARGES) FROM COMMODITY RISK MANAGEMENT |  |                    | 272  |   |      |  | (16  | )         |  |  | 288 |  





| |                                              
| | ---------------------------------------------
| | (6.b) Other revenues  euro
    1,787 million

|                                    |  |                    |       |  |      |  |       |           |  |  |        |  
|----------------------------------- |  | ------------------ | ----- |  | ---- |  | ----- | --------- |  |  | ------ | -
|                                    |  | 2005               |       |  | 2004 |  |       | 2005-2004 | 
|                                    |  |                    |       |  |      |  |       |           | 
|                                    |  | (millions of euro) |      
|Prior-year regulatory items        |  |                    | 338   |  |      |  |      |           |  |  | 338    |  
|Stranded costs                      |  |                    | 158   |  |      |  | 1,219 |           |  |  | (1,061 | )
|Gains on sale of equity investments |  |                    | 131   |  |      |  | 13    |           |  |  | 118    |  
|Bonus for service continuity        |  |                    | 115   |  |      |  | 250   |           |  |  | (135   | )
|Other                               |  |                    | 1,045 |  |      |  | 871   |           |  |  | 174    |  
|                                    |  |                    |       |  |      |  |       |           | 
|Total                               |  |                    | 1,787 |  |      |  | 2,353 |           |  |  | (566   | )



F-25



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|            |  |                    |        |  |      |  |        |           |  |  |       |  
|----------- |  | ------------------ | ------ |  | ---- |  | ------ | --------- |  |  | ----- | -
|            |  | 2005               |        |  | 2004 |  |        | 2005-2004 | 
|            |  |                    |        |  |      |  |        |           | 
|            |  | (millions of euro) |       
|Italy       |  |                    | 32,252 |  |      |  | 29,233 |           |  |  | 3,019 |  
|Europe      |  |                    | 1,656  |  |      |  | 1,549  |           |  |  | 107   |  
|Middle East |  |                    | 27     |  |      |  | 56     |           |  |  | (29   | )
|Americas    |  |                    | 117    |  |      |  | 160    |           |  |  | (43   | )
|Others      |  |                    | 7      |  |      |  | 13     |           |  |  | (6    | )
|            |  |                    |        |  |      |  |        |           | 
|Total       |  |                    | 34,059 |  |      |  | 31,011 |           |  |  | 3,048 |  



|    |                   
|--- | ------------------
|(7) | OPERATING EXPENSES



| |                                                              
| | -------------------------------------------------------------
| | (7.a) Raw materials and consumables  euro
    20,633 million

|                       |  |                    |        |   |      |  |        |           |  |  |       |  
|---------------------- |  | ------------------ | ------ | - | ---- |  | ------ | --------- |  |  | ----- | -
|                       |  | 2005               |        |   | 2004 |  |        | 2005-2004 | 
|                       |  |                    |        |   |      |  |        |           | 
|                       |  | (millions of euro) |       
|Electricity purchases  |  |                    | 14,321 |   |      |  | 10,380 |           |  |  | 3,941 |  
|Fuel and gas purchases |  |                    | 5,514  |   |      |  | 5,393  |           |  |  | 121   |  
|Materials purchases    |  |                    | 798    |   |      |  | 1,027  |           |  |  | (229  | )
|                       |  |                    |        |   |      |  |        |           | 
|Total                  |  |                    | 20,633 |   |      |  | 16,800 |           |  |  | 3,833 |  
|of which capitalized   |  |                    | (665   | ) |      |  | (673   | )         |  |  | (8    | )







| |                                                    
| | ---------------------------------------------------
| | (7.b) Services and rentals  euro
    3,057 million

|                                                   |  |                    |       |  |      |  |       |           |  |  |      |  
|-------------------------------------------------- |  | ------------------ | ----- |  | ---- |  | ----- | --------- |  |  | ---- | -
|                                                   |  | 2005               |       |  | 2004 |  |       | 2005-2004 | 
|                                                   |  |                    |       |  |      |  |       |           | 
|                                                   |  | (millions of euro) |      
|Electricity transport                              |  |                    | 1,048 |  |      |  | 1,068 |           |  |  | (20  | )
|Maintenance and repairs                            |  |                    | 395   |  |      |  | 347   |           |  |  | 48   |  
|Telephone and postal                               |  |                    | 144   |  |      |  | 133   |           |  |  | 11   |  
|Services by deconsolidated companies               |  |                    | 127   |  |      |  | 213   |           |  |  | (86  | )
|Services and tenders for contract work in progress |  |                    | 120   |  |      |  | 260   |           |  |  | (140 | )
|Advertising and publications                       |  |                    | 62    |  |      |  | 63    |           |  |  | (1   | )
|Leases and rentals                                 |  |                    | 387   |  |      |  | 349   |           |  |  | 38   |  
|Other                                              |  |                    | 774   |  |      |  | 673   |           |  |  | 101  |  
|                                                   |  |                    |       |  |      |  |       |           | 
|Total                                              |  |                    | 3,057 |  |      |  | 3,106 |           |  |  | (49  | )



F-26



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






| |                                     
| | ------------------------------------
| | (7.c) Personnel  euro 2,762 million

|                              |  |                    |       |   |      |  |       |           |  |  |      |  
|----------------------------- |  | ------------------ | ----- | - | ---- |  | ----- | --------- |  |  | ---- | -
|                              |  | 2005               |       |   | 2004 |  |       | 2005-2004 | 
|                              |  |                    |       |   |      |  |       |           | 
|                              |  | (millions of euro) |      
|Wages and salaries            |  |                    | 1,957 |   |      |  | 1,989 |           |  |  | (32  | )
|Social security contributions |  |                    | 529   |   |      |  | 537   |           |  |  | (8   | )
|Termination benefits          |  |                    | 111   |   |      |  | 97    |           |  |  | 14   |  
|Other costs                   |  |                    | 165   |   |      |  | 601   |           |  |  | (436 | )
|                              |  |                    |       |   |      |  |       |           | 
|Total                         |  |                    | 2,762 |   |      |  | 3,224 |           |  |  | (462 | )
|Of which capitalized          |  |                    | (384  | ) |      |  | (300  | )         |  |  | 84   |  





|                            |  |                |        |  |      |  |           |           |  |  |                  |   |  |  |        | 
|--------------------------- |  | -------------- | ------ |  | ---- |  | --------- | --------- |  |  | ---------------- | - |  |  | ------ | 
|                            |  | Average Number |        |  |      |  | Headcount |          
|                            |  |                |        |  |      |  |           |          
|                            |  | 2005           |        |  | 2004 |  |           | 2005-2004 |  |  | At Dec. 31, 2005 |  
|                            |  |                |        |  |      |  |           |           |  |  |                  |  
|Senior managers             |  |                | 618    |  |      |  | 581       |           |  |  | 37               |   |  |  | 562    | 
|Middle managers             |  |                | 4,144  |  |      |  | 4,024     |           |  |  | 120              |   |  |  | 4,103  | 
|Employees                   |  |                | 29,231 |  |      |  | 29,515    |           |  |  | (284             | ) |  |  | 28,480 | 
|Workers                     |  |                | 19,369 |  |      |  | 17,278    |           |  |  | 2,091            |   |  |  | 18,633 | 
|Total continuing operations |  |                | 53,362 |  |      |  | 51,398    |           |  |  | 1,964            |   |  |  | 51,778 | 
|Discontinued operations     |  |                | 6,722  |  |      |  | 10,820    |           |  |  | (4,098           | ) |  |  |       | 
|                            |  |                |        |  |      |  |           |           |  |  |                  |  
|TOTAL                       |  |                | 60,084 |  |      |  | 62,218    |           |  |  | (2,134           | ) |  |  | 51,778 | 



| |                                                                                
| | -------------------------------------------------------------------------------
| | (7.d) Depreciation, amortization and impairment
    losses  euro 2,207 million

|                                              |  |                    |       |  |      |  |       |           |  |  |     |  
|--------------------------------------------- |  | ------------------ | ----- |  | ---- |  | ----- | --------- |  |  | --- | -
|                                              |  | 2005               |       |  | 2004 |  |       | 2005-2004 | 
|                                              |  |                    |       |  |      |  |       |           | 
|                                              |  | (millions of euro) |      
|Depreciation of property, plant and equipment |  |                    | 1,918 |  |      |  | 1,990 |           |  |  | (72 | )
|Amortization of intangible assets             |  |                    | 138   |  |      |  | 121   |           |  |  | 17  |  
|Impairment losses                             |  |                    | 151   |  |      |  | 90    |           |  |  | 61  |  
|                                              |  |                    |       |  |      |  |       |           | 
|Total                                         |  |                    | 2,207 |  |      |  | 2,201 |           |  |  | 6   |  





F-27



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                                                      
| | -----------------------------------------------------
| | (7.e) Other operating expenses  euro
    911 million

|                                 |  |                    |     |  |      |  |     |           |  |  |      |  
|-------------------------------- |  | ------------------ | --- |  | ---- |  | --- | --------- |  |  | ---- | -
|                                 |  | 2005               |     |  | 2004 |  |     | 2005-2004 | 
|                                 |  |                    |     |  |      |  |     |           | 
|                                 |  | (millions of euro) |    
|Provisions for risks and charges |  |                    | 212 |  |      |  | 203 |           |  |  | 9    |  
|Purchase of green certificates   |  |                    | 119 |  |      |  | 104 |           |  |  | 15   |  
|Charges for CO
    2emissions    |  |                    | 228 |  |      |  |    |           |  |  | 228  |  
|Taxes and duties                 |  |                    | 144 |  |      |  | 158 |           |  |  | (14  | )
|Other                            |  |                    | 208 |  |      |  | 318 |           |  |  | (110 | )
|                                 |  |                    |     |  |      |  |     |           | 
|Total                            |  |                    | 911 |  |      |  | 783 |           |  |  | 128  |  





| |                                                      
| | -----------------------------------------------------
| | (7.f) Capitalized expenses  euro
    (1,049) million

|          |  |                    |        |   |      |  |      |           |  |  |    |  
|--------- |  | ------------------ | ------ | - | ---- |  | ---- | --------- |  |  | -- | -
|          |  | 2005               |        |   | 2004 |  |      | 2005-2004 | 
|          |  |                    |        |   |      |  |      |           | 
|          |  | (millions of euro) |       
|Personnel |  |                    | (384   | ) |      |  | (300 | )         |  |  | 84 |  
|Materials |  |                    | (665   | ) |      |  | (673 | )         |  |  | (8 | )
|          |  |                    |        |   |      |  |      |           | 
|Total     |  |                    | (1,049 | ) |      |  | (973 | )         |  |  | 76 |  



F-28



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|    |                                                                                          
|--- | -----------------------------------------------------------------------------------------
|(8) | FINANCIAL INCOME (EXPENSE) AND INCOME (EXPENSE) FROM
    INVESTMENTS  EURO (714) MILLION

|                                                                  |  |                    |      |   |      |  |        |           |  |  |      |  
|----------------------------------------------------------------- |  | ------------------ | ---- | - | ---- |  | ------ | --------- |  |  | ---- | -
|                                                                  |  | 2005               |      |   | 2004 |  |        | 2005-2004 | 
|                                                                  |  |                    |      |   |      |  |        |           | 
|                                                                  |  | (millions of euro) |     
|Financial income:                                                 |  |                    |      |   |      |  |        |           |  |  |      |  
| interest and other income from non-current financial
    assets |  |                    | 29   |   |      |  | 49     |           |  |  | (20  | )
| foreign exchange gains                                          |  |                    | 23   |   |      |  | 165    |           |  |  | (142 | )
| income realized from derivative instruments                     |  |                    | 13   |   |      |  | 16     |           |  |  | (3   | )
| income unrealized from derivative instruments                   |  |                    | 55   |   |      |  | 13     |           |  |  | 42   |  
| other income                                                    |  |                    | 99   |   |      |  | 118    |           |  |  | (19  | )
|Total income                                                      |  |                    | 219  |   |      |  | 361    |           |  |  | (142 | )
|Financial expense:                                                |  |                    |      |   |      |  |        |           |  |  |      |  
| interest and other charges on financial debt                    |  |                    | (686 | ) |      |  | (771   | )         |  |  | 85   |  
| foreign exchange losses                                         |  |                    | (52  | ) |      |  | (143   | )         |  |  | 91   |  
| expense realized on derivative instruments                      |  |                    | (75  | ) |      |  | (122   | )         |  |  | 47   |  
| expense unrealized on derivative instruments                    |  |                    | (19  | ) |      |  | (13    | )         |  |  | (6   | )
| accretion of post-employment and other employee
    benefits    |  |                    | (112 | ) |      |  | (134   | )         |  |  | 22   |  
|Total financial expense                                           |  |                    | (944 | ) |      |  | (1,183 | )         |  |  | 239  |  
|Total financial income (expense)                                  |  |                    | (725 | ) |      |  | (822   | )         |  |  | 97   |  
|Income (expense) from investments:                                |  |                    |      |   |      |  |        |           |  |  |      |  
| income from investments                                         |  |                    | 11   |   |      |  | 4      |           |  |  | 7    |  
| expense on investments                                          |  |                    |     |   |      |  | (9     | )         |  |  | 9    |  
|Total income (expense) from investments                           |  |                    | 11   |   |      |  | (5     | )         |  |  | 16   |  
|                                                                  |  |                    |      |   |      |  |        |           | 
|TOTAL                                                             |  |                    | (714 | ) |      |  | (827   | )         |  |  | 113  |  





|    |                                                                                                
|--- | -----------------------------------------------------------------------------------------------
|(9) | INCOME (EXPENSE) FROM INVESTMENTS ACCOUNTED FOR USING THE
    EQUITY METHOD  EURO (30) MILLION

|                       |  |                    |     |   |      |  |     |           |  |  |    |  
|---------------------- |  | ------------------ | --- | - | ---- |  | --- | --------- |  |  | -- | -
|                       |  | 2005               |     |   | 2004 |  |     | 2005-2004 | 
|                       |  |                    |     |   |      |  |     |           | 
|                       |  | (millions of euro) |    
|Income from associates |  |                    | 7   |   |      |  | 8   |           |  |  | (1 | )
|Expense on associates  |  |                    | (37 | ) |      |  | (33 | )         |  |  | (4 | )
|                       |  |                    |     |   |      |  |     |           | 
|Total                  |  |                    | (30 | ) |      |  | (25 | )         |  |  | (5 | )



|     |                                  
|---- | ---------------------------------
|(10) | INCOME TAXES  EURO 1,934 MILLION

|                                                      |  |                    |       |  |      |  |       |           |  |  |      |  
|----------------------------------------------------- |  | ------------------ | ----- |  | ---- |  | ----- | --------- |  |  | ---- | -
|                                                      |  | 2005               |       |  | 2004 |  |       | 2005-2004 | 
|                                                      |  |                    |       |  |      |  |       |           | 
|                                                      |  | (millions of euro) |      
|Current taxes                                         |  |                    | 1,398 |  |      |  | 1,328 |           |  |  | 70   |  
|Difference on estimated income taxes from prior years |  |                    | 14    |  |      |  | (14   | )         |  |  | 28   |  
|Deferred tax assets                                   |  |                    | 277   |  |      |  | 459   |           |  |  | (182 | )
|Deferred tax liabilities                              |  |                    | 245   |  |      |  | 343   |           |  |  | (98  | )
|                                                      |  |                    |       |  |      |  |       |           | 
|Total                                                 |  |                    | 1,934 |  |      |  | 2,116 |           |  |  | (182 | )

F-29



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                                        |  |                    |       |   |      |  |      |    |  |  |       |   |  |  |      |   
|------------------------------------------------------- |  | ------------------ | ----- | - | ---- |  | ---- | -- |  |  | ----- | - |  |  | ---- | --
|                                                        |  | 2005               |       |   | 2004 | 
|                                                        |  |                    |       |   |      | 
|                                                        |  | (millions of euro) |      
|Income before taxes                                     |  |                    | 4,794 |   |      |  |      |    |  |  | 5,018 |   |  |  |      |   
|Theoretical tax due calculated as 33% of pre-tax income |  |                    | 1,582 |   |      |  | 33.0 | %  |  |  | 1,656 |   |  |  | 33.0 | % 
|Permanent differences and minor items                   |  |                    | (12   | ) |      |  | (0.3 | )% |  |  | 103   |   |  |  | 2.1  | % 
|Difference on estimated income taxes from prior years   |  |                    | 14    |   |      |  | 0.3  | %  |  |  | (14   | ) |  |  | (0.3 | )%
|IRAP                                                    |  |                    | 350   |   |      |  | 7.3  | %  |  |  | 371   |   |  |  | 7.4  | % 
|                                                        |  |                    |       |   |      |  |      |    |  |  |       |  
|Income tax for the year                                 |  |                    | 1,934 |   |      |  | 40.3 | %  |  |  | 2,116 |   |  |  | 42.2 | % 

Assets


(11)  CURRENT ASSETS




| |                                          
| | -----------------------------------------
| | (11.a) Inventories  euro
    884 million

|                                             |  |                    |     |  |                  |  |       |           |  |  |      |  
|-------------------------------------------- |  | ------------------ | --- |  | ---------------- |  | ----- | --------- |  |  | ---- | -
|                                             |  | At Dec. 31, 2005   |     |  | At Dec. 31, 2004 |  |       | 2005-2004 | 
|                                             |  |                    |     |  |                  |  |       |           | 
|                                             |  | (millions of euro) |    
|Raw materials, consumables and supplies:     |  |                    |     |  |                  |  |       |           |  |  |      |  
| fuel                                       |  |                    | 585 |  |                  |  | 590   |           |  |  | (5   | )
| materials, equipment and other inventories |  |                    | 115 |  |                  |  | 499   |           |  |  | (384 | )
|Total                                        |  |                    | 700 |  |                  |  | 1,089 |           |  |  | (389 | )
|Buildings available for sale                 |  |                    | 166 |  |                  |  | 208   |           |  |  | (42  | )
|Finished products and goods                  |  |                    |    |  |                  |  | 44    |           |  |  | (44  | )
|Other                                        |  |                    | 18  |  |                  |  | 4     |           |  |  | 14   |  
|                                             |  |                    |     |  |                  |  |       |           | 
|TOTAL                                        |  |                    | 884 |  |                  |  | 1,345 |           |  |  | (461 | )









F-30



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                                                  
| | -------------------------------------------------
| | (11.b) Trade receivables  euro
    8,316 million

|                                                                  |  |                    |       |  |                  |  |       |           |  |  |        |  
|----------------------------------------------------------------- |  | ------------------ | ----- |  | ---------------- |  | ----- | --------- |  |  | ------ | -
|                                                                  |  | At Dec. 31, 2005   |       |  | At Dec. 31, 2004 |  |       | 2005-2004 | 
|                                                                  |  |                    |       |  |                  |  |       |           | 
|                                                                  |  | (millions of euro) |      
|Customers:                                                        |  |                    |       |  |                  |  |       |           |  |  |        |  
| sale and transport of electricity                               |  |                    | 6,850 |  |                  |  | 5,532 |           |  |  | 1,318  |  
| distribution and sale of natural gas to end-users               |  |                    | 611   |  |                  |  | 516   |           |  |  | 95     |  
| other activities                                                |  |                    | 506   |  |                  |  | 652   |           |  |  | (146   | )
|Total                                                             |  |                    | 7,967 |  |                  |  | 6,700 |           |  |  | 1,267  |  
|Trade receivables for telecommunication and transmission services |  |                    |      |  |                  |  | 1,212 |           |  |  | (1,212 | )
|Trade receivables due from associates                             |  |                    | 290   |  |                  |  | 19    |           |  |  | 271    |  
|Receivables for contract work in progress                         |  |                    | 59    |  |                  |  | 96    |           |  |  | (37    | )
|                                                                  |  |                    |       |  |                  |  |       |           | 
|TOTAL                                                             |  |                    | 8,316 |  |                  |  | 8,027 |           |  |  | 289    |  





|                                      |  |                    |      |  
|------------------------------------- |  | ------------------ | ---- | -
|                                      |  | (Millions of euro) |     
|                                      |  |                    |     
|Total at Jan 1, 2004                  |  |                    | 328  |  
|Accruals*                             |  |                    | 241  |  
|Utilization                           |  |                    | (83  | )
|                                      |  |                    |     
|Total at Dec. 31, 2004                |  |                    | 486  |  
|Accruals**                            |  |                    | 188  |  
|Utilization                           |  |                    | (22  | )
|Net changes in scope of consolidation |  |                    | (305 | )
|                                      |  |                    |     
|Total at Dec. 31, 2005                |  |                    | 347  |  






|    |                                                                                       
|--- | --------------------------------------------------------------------------------------
|(*) | include euro 151 million in respect of
    Telecommunication and Transmission sectors.



|     |                                                                                                                        
|---- | -----------------------------------------------------------------------------------------------------------------------
|(**) | include euro 37 million in respect of
    Telecommunication and Transmission sectors until date of
    deconsolidation.



| |                                              
| | ---------------------------------------------
| | (11.c) Tax receivables  euro
    789 million



F-31



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                                                       
| | ------------------------------------------------------
| | (11.d) Current financial assets  euro
    569 million

|                                   |  |                    |     |  |                  |  |     |           |  |  |     |  
|---------------------------------- |  | ------------------ | --- |  | ---------------- |  | --- | --------- |  |  | --- | -
|                                   |  | At Dec. 31, 2005   |     |  | At Dec. 31, 2004 |  |     | 2005-2004 | 
|                                   |  |                    |     |  |                  |  |     |           | 
|                                   |  | (millions of euro) |    
|Receivables for factoring advances |  |                    | 374 |  |                  |  | 391 |           |  |  | (17 | )
|Derivative contracts               |  |                    | 115 |  |                  |  | 27  |           |  |  | 88  |  
|Other securities                   |  |                    | 28  |  |                  |  | 32  |           |  |  | (4  | )
|Investments                        |  |                    | 43  |  |                  |  | 2   |           |  |  | 41  |  
|Other                              |  |                    | 9   |  |                  |  | 57  |           |  |  | (48 | )
|                                   |  |                    |     |  |                  |  |     |           | 
|Total                              |  |                    | 569 |  |                  |  | 509 |           |  |  | 60  |  





|                             |  |                    |       |  |                  |  |       |                  |  |  |                  |  |  |           |    |  |  |  |    |  
|---------------------------- |  | ------------------ | ----- |  | ---------------- |  | ----- | ---------------- |  |  | ---------------- |  |  | --------- | -- |  |  |  | -- | -
|                             |  | Notional Amount    |       |  | Fair Value       |  |       |                 
|                             |  |                    |       |  |                  |  |       |                 
|                             |  | At Dec. 31, 2005   |       |  | At Dec. 31, 2004 |  |       | At Dec. 31, 2005 |  |  | At Dec. 31, 2004 |  |  | 2005-2004 |   
|                             |  |                    |       |  |                  |  |       |                  |  |  |                  |  |  |           |   
|                             |  | (millions of euro) |      
|Cash flow hedge derivatives: |  |                    |       |  |                  |  |       |                  |  |  |                  |  |  |           |    |  |  |  |    |  
| interest rates             |  |                    | 60    |  |                  |  | 4     |                  |  |  |                 |  |  |           |   |  |  |  |   |  
| exchange rates             |  |                    | 1     |  |                  |  | 100   |                  |  |  |                 |  |  |           | 7  |  |  |  | (7 | )
| commodities                |  |                    | 1,372 |  |                  |  |      |                  |  |  | 57               |  |  |           |   |  |  |  | 57 |  
|Total                        |  |                    | 1,433 |  |                  |  | 104   |                  |  |  | 57               |  |  |           | 7  |  |  |  | 50 |  
|Trading derivatives:         |  |                    |       |  |                  |  |       |                  |  |  |                  |  |  |           |    |  |  |  |    |  
| interest rates             |  |                    | 60    |  |                  |  | 60    |                  |  |  | 1                |  |  |           | 2  |  |  |  | (1 | )
| exchange rates             |  |                    | 703   |  |                  |  | 361   |                  |  |  | 9                |  |  |           | 4  |  |  |  | 5  |  
| commodities                |  |                    | 7,179 |  |                  |  | 5,690 |                  |  |  | 48               |  |  |           | 14 |  |  |  | 34 |  
|Total                        |  |                    | 7,942 |  |                  |  | 6,111 |                  |  |  | 58               |  |  |           | 20 |  |  |  | 38 |  
|                             |  |                    |       |  |                  |  |       |                  |  |  |                  |  |  |           |   
|TOTAL                        |  |                    | 9,375 |  |                  |  | 6,215 |                  |  |  | 115              |  |  |           | 27 |  |  |  | 88 |  





| |   |                                                                                                                                                                                        
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | two-way contracts for differences, with a notional value of
    euro 1,372 million (euro 5,133 million in 2004)
    and a fair value of euro 57 million (nil at
    December 31, 2004);
|
| |  | one-way contracts for differences, with a notional value of
    euro 6,266 million and a fair value of
    euro 43 million (not entered into 2004);                                    
|
| |  | derivatives on fuels, energy and metals with a notional value of
    euro 913 million (euro 557 million in 2004) and a
    fair value of euro 5 million (euro 14 million in
    2004). 



F-32



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                                                        
| | -------------------------------------------------------
| | (11.e) Cash and cash equivalents  euro
    476 million



|                                  |  |                    |     |  |                  |  |     |           |  |  |     | 
|--------------------------------- |  | ------------------ | --- |  | ---------------- |  | --- | --------- |  |  | --- | 
|                                  |  | At Dec. 31, 2005   |     |  | At Dec. 31, 2004 |  |     | 2005-2004 | 
|                                  |  |                    |     |  |                  |  |     |           | 
|                                  |  | (millions of euro) |    
|Bank deposits                     |  |                    | 432 |  |                  |  | 322 |           |  |  | 110 | 
|Post Office deposits              |  |                    | 40  |  |                  |  | 7   |           |  |  | 33  | 
|Cash and cash equivalents on hand |  |                    | 4   |  |                  |  | 2   |           |  |  | 2   | 
|                                  |  |                    |     |  |                  |  |     |           | 
|Total                             |  |                    | 476 |  |                  |  | 331 |           |  |  | 145 | 



| |                                                     
| | ----------------------------------------------------
| | (11.f) Other current assets  euro
    1,712 million

|                               |  |                    |       |  |                  |  |       |           |  |  |      |  
|------------------------------ |  | ------------------ | ----- |  | ---------------- |  | ----- | --------- |  |  | ---- | -
|                               |  | At Dec. 31, 2005   |       |  | At Dec. 31, 2004 |  |       | 2005-2004 | 
|                               |  |                    |       |  |                  |  |       |           | 
|                               |  | (millions of euro) |      
|Electricity Equalization Fund  |  |                    | 816   |  |                  |  | 1,682 |           |  |  | (866 | )
|Receivables due from employees |  |                    | 9     |  |                  |  | 10    |           |  |  | (1   | )
|Receivables due from others    |  |                    | 887   |  |                  |  | 774   |           |  |  | 113  |  
|                               |  |                    |       |  |                  |  |       |           | 
|Total                          |  |                    | 1,712 |  |                  |  | 2,466 |           |  |  | (754 | )







|     |                   
|---- | ------------------
|(12) | NON-CURRENT ASSETS



| |                                                               
| | --------------------------------------------------------------
| | (12.a) Property, plant and equipment  euro
    30,188 million



|                                       |  |                    |        |  |             |        |          |         |  |  |              |          |  |               |            |   |           |           |        |         |             |  |      |   |  |  |      |   |  |  |        | 
|-------------------------------------- |  | ------------------ | ------ |  | ----------- | ------ | -------- | ------- |  |  | ------------ | -------- |  | ------------- | ---------- | - | --------- | --------- | ------ | ------- | ----------- |  | ---- | - |  |  | ---- | - |  |  | ------ | 
|                                       |  |                    |        |  |             |        |          |         |  |  |              |          |  | Ordinary      |            |   |          
|                                       |  |                    |        |  |             | Assets |          |         |  |  | Change in    |          |  | Exchange      |            |   | Disposals |           |        |        
|                                       |  | At Jan. 1,         |        |  |             |        | Entering |         |  |  |              | Scope of |  |               | Rate Gains |   |           | and Other |        |         | At Dec. 31, | 
|                                       |  | 2004               |        |  | Investments |        |          | Service |  |  | Depreciation |          |  | Consolidation |            |   | (Losses ) |           |        | Changes |             |  | 2004 |  
|                                       |  |                    |        |  |             |        |          |         |  |  |              |          |  |               |            |   |           |           |        |         |             |  |      |  
|                                       |  | (millions of euro) |       
|Land                                   |  |                    | 865    |  |             |        | 1        |         |  |  | 4            |          |  |               |           |   |           |           | (69    | )       |             |  |     |   |  |  | (450 | ) |  |  | 351    | 
|Buildings                              |  |                    | 4,620  |  |             |        | 66       |         |  |  | 70           |          |  |               | (168       | ) |           |           | (1,345 | )       |             |  |     |   |  |  | 400  |   |  |  | 3,643  | 
|Plant and machinery                    |  |                    | 29,395 |  |             |        | 2,067    |         |  |  | 1,235        |          |  |               | (2,639     | ) |           |           | 154    |         |             |  | (17  | ) |  |  | (72  | ) |  |  | 30,123 | 
|Industrial and commercial equipment    |  |                    | 134    |  |             |        | 17       |         |  |  |             |          |  |               | (26        | ) |           |           | (1     | )       |             |  |     |   |  |  | (23  | ) |  |  | 101    | 
|Other assets                           |  |                    | 386    |  |             |        | 82       |         |  |  | 11           |          |  |               | (120       | ) |           |           |       |         |             |  |     |   |  |  | (36  | ) |  |  | 323    | 
|Leasehold improvements                 |  |                    | 109    |  |             |        | 20       |         |  |  | 8            |          |  |               | (41        | ) |           |           |       |         |             |  |     |   |  |  | (8   | ) |  |  | 88     | 
|Total assets in use                    |  |                    | 35,509 |  |             |        | 2,253    |         |  |  | 1,328        |          |  |               | (2,994     | ) |           |           | (1,261 | )       |             |  | (17  | ) |  |  | (189 | ) |  |  | 34,629 | 
|Assets under construction and advances |  |                    | 2,141  |  |             |        | 1,285    |         |  |  | (1,328       | )        |  |               |           |   |           |           | (12    | )       |             |  |     |   |  |  | (13  | ) |  |  | 2,073  | 
|                                       |  |                    |        |  |             |        |          |         |  |  |              |          |  |               |            |   |           |           |        |         |             |  |      |  
|TOTAL                                  |  |                    | 37,650 |  |             |        | 3,538    |         |  |  |             |          |  |               | (2,994     | ) |           |           | (1,273 | )       |             |  | (17  | ) |  |  | (202 | ) |  |  | 36,702 | 

F-33



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


|                                           |  |                    |        |  |             |        |          |         |  |              |           |   |          |               |        |            |           |  |           |         |  |             |      |  |  |  |      |   |  |  |        | 
|------------------------------------------ |  | ------------------ | ------ |  | ----------- | ------ | -------- | ------- |  | ------------ | --------- | - | -------- | ------------- | ------ | ---------- | --------- |  | --------- | ------- |  | ----------- | ---- |  |  |  | ---- | - |  |  | ------ | 
|                                           |  |                    |        |  |             |        |          |         |  |              |           |   |          | Ordinary      |        |            |          
|                                           |  |                    |        |  |             | Assets |          |         |  |              | Change in |   |          | Exchange      |        |            | Disposals |  |           |        
|                                           |  | At Jan. 1,         |        |  |             |        | Entering |         |  | Depreciation |           |   | Scope of |               |        | Rate Gains |           |  | and Other |         |  | At Dec. 31, |     
|                                           |  | 2005               |        |  | Investments |        |          | Service |  |              | (1)       |   |          | Consolidation |        |            | (Losses ) |  |           | Changes |  |             | 2005 | 
|                                           |  |                    |        |  |             |        |          |         |  |              |           |   |          |               |        |            |           |  |           |         |  |             |      | 
|                                           |  | (millions of euro) |       
|Land                                       |  |                    | 351    |  |             |        | 1        |         |  |              | 2         |   |          |               |       |            |           |  | (16       | )       |  |             | 1    |  |  |  | 52   |   |  |  | 391    | 
|Buildings                                  |  |                    | 3,643  |  |             |        | 64       |         |  |              | 48        |   |          |               | (210   | )          |           |  | (325      | )       |  |             |     |  |  |  | 133  |   |  |  | 3,353  | 
|Plant and machinery                        |  |                    | 30,123 |  |             |        | 1,743    |         |  |              | 766       |   |          |               | (2,191 | )          |           |  | (6,329    | )       |  |             | 245  |  |  |  | (211 | ) |  |  | 24,146 | 
|Industrial and commercial equipment        |  |                    | 101    |  |             |        | 16       |         |  |              | 1         |   |          |               | (24    | )          |           |  | (10       | )       |  |             |     |  |  |  | (4   | ) |  |  | 80     | 
|Other assets                               |  |                    | 323    |  |             |        | 56       |         |  |              | 15        |   |          |               | (101   | )          |           |  | (119      | )       |  |             |     |  |  |  | (23  | ) |  |  | 151    | 
|Leasehold improvements                     |  |                    | 88     |  |             |        | 13       |         |  |              | 10        |   |          |               | (35    | )          |           |  | (59       | )       |  |             |     |  |  |  | 10   |   |  |  | 27     | 
|Total assets in use                        |  |                    | 34,629 |  |             |        | 1,893    |         |  |              | 842       |   |          |               | (2,561 | )          |           |  | (6,858    | )       |  |             | 246  |  |  |  | (43  | ) |  |  | 28,148 | 
|Assets under construction
    and advances |  |                    | 2,073  |  |             |        | 1,144    |         |  |              | (842      | ) |          |               |       |            |           |  | (600      | )       |  |             | 1    |  |  |  | 264  |   |  |  | 2,040  | 
|                                           |  |                    |        |  |             |        |          |         |  |              |           |   |          |               |        |            |           |  |           |         |  |             |      | 
|TOTAL                                      |  |                    | 36,702 |  |             |        | 3,037    |         |  |              |          |   |          |               | (2,561 | )          |           |  | (7,458    | )       |  |             | 247  |  |  |  | 221  |   |  |  | 30,188 | 






|    |                                                                                                                                                      
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Include euro 643 million (euro 1,004 million in
    2004) in respect of Telecommunication and Transmission sectors
    until date of deconsolidation.







| |   |                                                                                                                                                                           
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | deconsolidation of Transmission and Telecommunications sectors
    following the sale in 2005 of the Companys majority stakes
    in Terna and Wind (euro 7,823 million);
|
| |  | acquisition of Electrica Banat and Electrica Dobrogea (euro
    305 million);                                                                                             
|
| |  | acquisition of new companies in the United States (euro
    35 million);                                                                                                  
|
| |  | acquisition of Metanodotti Padani and Metanodotti Trentini (euro
    25 million).                                                                                         





F-34



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                         |  |                    |        |  |                          |  |        |           |  |  |        | 
|---------------------------------------- |  | ------------------ | ------ |  | ------------------------ |  | ------ | --------- |  |  | ------ | 
|                                         |  | Gross Value        |        |  | Accumulated Depreciation |  |        | Net Value | 
|                                         |  |                    |        |  |                          |  |        |           | 
|                                         |  | (millions of euro) |       
|Power plants:(1)                         |  |                    |        |  |                          |  |        |           |  |  |        | 
| thermal                                |  |                    | 17,654 |  |                          |  | 10,745 |           |  |  | 6,909  | 
| hydro                                  |  |                    | 8,220  |  |                          |  | 3,820  |           |  |  | 4,400  | 
| geothermal                             |  |                    | 1,772  |  |                          |  | 1,051  |           |  |  | 721    | 
| alternative energy resources           |  |                    | 474    |  |                          |  | 105    |           |  |  | 369    | 
|Total power plants                       |  |                    | 28,120 |  |                          |  | 15,721 |           |  |  | 12,399 | 
|Transport lines and transformer stations |  |                    | 7,475  |  |                          |  | 3,517  |           |  |  | 3,958  | 
|Electricity distribution networks        |  |                    | 36,275 |  |                          |  | 24,856 |           |  |  | 11,419 | 
|Telecommunications networks              |  |                    | 5,616  |  |                          |  | 2,530  |           |  |  | 3,086  | 
|Gas distribution networks                |  |                    | 2,708  |  |                          |  | 1,036  |           |  |  | 1,672  | 
|Primary and secondary substations        |  |                    | 1,253  |  |                          |  | 648    |           |  |  | 605    | 
|Offices, warehouses etc.(2)              |  |                    | 1,025  |  |                          |  | 254    |           |  |  | 771    | 
|Equipment and other assets               |  |                    | 2,206  |  |                          |  | 1,487  |           |  |  | 719    | 
|Total assets in use                      |  |                    | 84,678 |  |                          |  | 50,049 |           |  |  | 34,629 | 
|Assets under construction and advances   |  |                    | 2,073  |  |                          |  |       |           |  |  | 2,073  | 
|                                         |  |                    |        |  |                          |  |        |           | 
|TOTAL AT DEC. 31, 2004                   |  |                    | 86,751 |  |                          |  | 50,049 |           |  |  | 36,702 | 

|                                       |  |                    |        |  |                          |  |        |           |  |  |        | 
|-------------------------------------- |  | ------------------ | ------ |  | ------------------------ |  | ------ | --------- |  |  | ------ | 
|                                       |  | Gross Value        |        |  | Accumulated Depreciation |  |        | Net Value | 
|                                       |  |                    |        |  |                          |  |        |           | 
|                                       |  | (millions of euro) |       
|Power plants:(1)                       |  |                    |        |  |                          |  |        |           |  |  |        | 
| thermal                              |  |                    | 17,951 |  |                          |  | 11,430 |           |  |  | 6,521  | 
| hydro                                |  |                    | 8,361  |  |                          |  | 3,939  |           |  |  | 4,422  | 
| geothermal                           |  |                    | 1,726  |  |                          |  | 1,093  |           |  |  | 633    | 
| alternative energy resources         |  |                    | 706    |  |                          |  | 140    |           |  |  | 566    | 
|Total power plants                     |  |                    | 28,744 |  |                          |  | 16,602 |           |  |  | 12,142 | 
|Electricity distribution networks      |  |                    | 37,330 |  |                          |  | 25,048 |           |  |  | 12,282 | 
|Gas distribution networks              |  |                    | 2,655  |  |                          |  | 1,029  |           |  |  | 1,626  | 
|Primary and secondary substations      |  |                    | 1,289  |  |                          |  | 615    |           |  |  | 674    | 
|Offices, warehouses etc.(2)            |  |                    | 988    |  |                          |  | 116    |           |  |  | 872    | 
|Equipment and other assets             |  |                    | 1,542  |  |                          |  | 990    |           |  |  | 552    | 
|Total assets in use                    |  |                    | 72,548 |  |                          |  | 44,400 |           |  |  | 28,148 | 
|Assets under construction and advances |  |                    | 2,040  |  |                          |  |       |           |  |  | 2,040  | 
|                                       |  |                    |        |  |                          |  |        |           | 
|TOTAL AT DEC. 31, 2005                 |  |                    | 74,588 |  |                          |  | 44,400 |           |  |  | 30,188 | 






|    |                                                                                                                                                     
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The values also include industrial land and buildings.                                                                                              
|   
|(2) | The values include non-industrial buildings (offices,
    warehouses, parking facilities etc), buildings for civil use and
    non-appurtenant land.

F-35



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                               |  |                    |       |  |      |  |       |           |  |  |      |  
|---------------------------------------------- |  | ------------------ | ----- |  | ---- |  | ----- | --------- |  |  | ---- | -
|                                               |  | 2005               |       |  | 2004 |  |       | 2005-2004 | 
|                                               |  |                    |       |  |      |  |       |           | 
|                                               |  | (millions of euro) |      
|Power plants:                                  |  |                    |       |  |      |  |       |           |  |  |      |  
| thermal                                      |  |                    | 570   |  |      |  | 455   |           |  |  | 115  |  
| hydro                                        |  |                    | 206   |  |      |  | 188   |           |  |  | 18   |  
| geothermal                                   |  |                    | 84    |  |      |  | 55    |           |  |  | 29   |  
| alternative energy resources                 |  |                    | 130   |  |      |  | 122   |           |  |  | 8    |  
|Total power plants                             |  |                    | 990   |  |      |  | 820   |           |  |  | 170  |  
|Transport lines and transformer stations       |  |                    | 133   |  |      |  | 267   |           |  |  | (134 | )
|Electricity distribution networks              |  |                    | 1,381 |  |      |  | 1,435 |           |  |  | (54  | )
|Gas distribution networks                      |  |                    | 70    |  |      |  | 80    |           |  |  | (10  | )
|Telecommunication networks                     |  |                    | 251   |  |      |  | 680   |           |  |  | (429 | )
|Land, buildings and other assets and equipment |  |                    | 212   |  |      |  | 256   |           |  |  | (44  | )
|                                               |  |                    |       |  |      |  |       |           | 
|TOTAL CAPITAL EXPENDITURE                      |  |                    | 3,037 |  |      |  | 3,538 |           |  |  | (501 | )









|                                |  |         |     |  
|------------------------------- |  | ------- | --- | -
|                                |  | Euro    |    
|                                |  | Million |    
|                                |  |         |    
|Balance as of January 1, 2005   |  |         | 88  |  
|Disposal of investment          |  |         | (53 | )
|Accretion expense               |  |         | 2   |  
|                                |  |         |    
|Balance as of December 31, 2005 |  |         | 37  |  
|                                |  |         |    



F-36



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






| |                                                  
| | -------------------------------------------------
| | (12.b) Intangible assets  euro
    2,182 million

|                                                     |  |                    |        |  |           |        |          |         |          |            |          |            |          |               |    |   |              |       |    |         |             |  |      |   |  |  |        |   |  |  |        | 
|---------------------------------------------------- |  | ------------------ | ------ |  | --------- | ------ | -------- | ------- | -------- | ---------- | -------- | ---------- | -------- | ------------- | -- | - | ------------ | ----- | -- | ------- | ----------- |  | ---- | - |  |  | ------ | - |  |  | ------ | 
|                                                     |  |                    |        |  |           | Assets |          |         | Exchange |            |          | Changes in |          |               |    |   |              |       |   
|                                                     |  | At Jan. 1,         |        |  |           |        | Entering |         |          | Rate Gains |          |            | Scope of |               |    |   |              | Other |    |         | At Dec. 31, | 
|                                                     |  | 2004               |        |  | Increases |        |          | Service |          |            | (Losses) |            |          | Consolidation |    |   | Amortization |       |    | Changes |             |  | 2004 |  
|                                                     |  |                    |        |  |           |        |          |         |          |            |          |            |          |               |    |   |              |       |    |         |             |  |      |  
|                                                     |  | (millions of euro) |       
|Development costs                                    |  |                    | 9      |  |           |        | 1        |         |          |            |         |            |          |               |   |   |              |       |   |         |             |  | (4   | ) |  |  |       |   |  |  | 6      | 
|Industrial patents and intellectual property rights  |  |                    | 469    |  |           |        | 157      |         |          |            | 7        |            |          |               |   |   |              |       |   |         |             |  | (228 | ) |  |  | 6      |   |  |  | 411    | 
|Concessions, licenses, trademarks and similar rights |  |                    | 2,664  |  |           |        | 5        |         |          |            |         |            |          |               |   |   |              |       |   |         |             |  | (142 | ) |  |  | (1     | ) |  |  | 2,526  | 
|Assets under development and advances                |  |                    | 189    |  |           |        | 117      |         |          |            | (117     | )          |          |               |   |   |              |       | (2 | )       |             |  |     |   |  |  | (13    | ) |  |  | 174    | 
|Other:                                               |  |                    |        |  |           |        |          |         |          |            |          |            |          |               |    |   |              |       |    |         |             |  |      |   |  |  |        |   |  |  |        | 
| software development                               |  |                    | 95     |  |           |        |         |         |          |            | 110      |            |          |               |   |   |              |       |   |         |             |  | (59  | ) |  |  | (20    | ) |  |  | 126    | 
| other                                              |  |                    | 75     |  |           |        | 16       |         |          |            |         |            |          |               | (4 | ) |              |       | 15 |         |             |  | (16  | ) |  |  | 33     |   |  |  | 119    | 
|Total other                                          |  |                    | 170    |  |           |        | 16       |         |          |            | 110      |            |          |               | (4 | ) |              |       | 15 |         |             |  | (75  | ) |  |  | 13     |   |  |  | 245    | 
|Goodwill                                             |  |                    | 8,343  |  |           |        |         |         |          |            |         |            |          |               |   |   |              |       | 47 |         |             |  |     |   |  |  | (1,681 | ) |  |  | 6,709  | 
|                                                     |  |                    |        |  |           |        |          |         |          |            |          |            |          |               |    |   |              |       |    |         |             |  |      |  
|TOTAL                                                |  |                    | 11,844 |  |           |        | 296      |         |          |            |         |            |          |               | (4 | ) |              |       | 60 |         |             |  | (449 | ) |  |  | (1,676 | ) |  |  | 10,071 | 

|                                                           |  |                    |        |  |           |        |          |         |          |            |          |            |          |               |    |  |                 |       |        |         |             |  |      |   |  |  |     |   |  |  |       | 
|---------------------------------------------------------- |  | ------------------ | ------ |  | --------- | ------ | -------- | ------- | -------- | ---------- | -------- | ---------- | -------- | ------------- | -- |  | --------------- | ----- | ------ | ------- | ----------- |  | ---- | - |  |  | --- | - |  |  | ----- | 
|                                                           |  |                    |        |  |           | Assets |          |         | Exchange |            |          | Changes in |          |               |    |  |                 |       |       
|                                                           |  | At Jan. 1,         |        |  |           |        | Entering |         |          | Rate Gains |          |            | Scope of |               |    |  |                 | Other |        |         | At Dec. 31, | 
|                                                           |  | 2005               |        |  | Increases |        |          | Service |          |            | (Losses) |            |          | Consolidation |    |  | Amortization(1) |       |        | Changes |             |  | 2005 |  
|                                                           |  |                    |        |  |           |        |          |         |          |            |          |            |          |               |    |  |                 |       |        |         |             |  |      |  
|                                                           |  | (millions of euro) |       
|Development costs                                          |  |                    | 6      |  |           |        |         |         |          |            |         |            |          |               |   |  |                 |       |       |         |             |  |     |   |  |  | (6  | ) |  |  |      | 
|Industrial patents and intellectual property rights        |  |                    | 411    |  |           |        | 72       |         |          |            | 59       |            |          |               |   |  |                 |       | (245   | )       |             |  | (149 | ) |  |  | (15 | ) |  |  | 133   | 
|Concessions, licenses, trademarks and other similar rights |  |                    | 2,526  |  |           |        | 36       |         |          |            |         |            |          |               | 1  |  |                 |       | (2,410 | )       |             |  | (96  | ) |  |  | 20  |   |  |  | 77    | 
|Assets under development and advances                      |  |                    | 174    |  |           |        | 97       |         |          |            | (68      | )          |          |               |   |  |                 |       | (70    | )       |             |  |     |   |  |  | (1  | ) |  |  | 132   | 
|Other:                                                     |  |                    |        |  |           |        |          |         |          |            |          |            |          |               |    |  |                 |       |        |         |             |  |      |   |  |  |     |   |  |  |       | 
| software development                                     |  |                    | 126    |  |           |        | 11       |         |          |            | 9        |            |          |               |   |  |                 |       |       |         |             |  | (52  | ) |  |  | 11  |   |  |  | 105   | 
| other                                                    |  |                    | 119    |  |           |        | 1        |         |          |            |         |            |          |               | 9  |  |                 |       | 26     |         |             |  | (11  | ) |  |  | 16  |   |  |  | 160   | 
|Total other                                                |  |                    | 245    |  |           |        | 12       |         |          |            | 9        |            |          |               | 9  |  |                 |       | 26     |         |             |  | (63  | ) |  |  | 27  |   |  |  | 265   | 
|Goodwill                                                   |  |                    | 6,709  |  |           |        | 3        |         |          |            |         |            |          |               | 23 |  |                 |       | (5,120 | )       |             |  |     |   |  |  | (40 | ) |  |  | 1,575 | 
|                                                           |  |                    |        |  |           |        |          |         |          |            |          |            |          |               |    |  |                 |       |        |         |             |  |      |  
|TOTAL                                                      |  |                    | 10,071 |  |           |        | 220      |         |          |            |         |            |          |               | 33 |  |                 |       | (7,819 | )       |             |  | (308 | ) |  |  | (15 | ) |  |  | 2,182 | 






|    |                                                                                                                                                      
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes euro 170 million (euro 328 million in
    2004) in respect of Telecommunications and Transmission sectors
    until date of deconsolidation.





F-37



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)












|                               |  |                    |       |  |          |  |      |                |               |  |                   |   |  |       |      |   |  |  |      |   |  |  |          | 
|------------------------------ |  | ------------------ | ----- |  | -------- |  | ---- | -------------- | ------------- |  | ----------------- | - |  | ----- | ---- | - |  |  | ---- | - |  |  | -------- | 
|                               |  | At Dec. 31,        |       |  |          |  |      |                |               |  |                  
|                               |  | 2005               |       |  |          |  |      |                | Discount Rate |  |                   |  
|                               |  |                    |       |  |          |  |      |                |               |  |                   |  
|                               |  | Amount             |       |  | Tax Rate |  |      | Growth Rate(1) |               |  | WACC(2)           |   |  | Ke(3) |      |   | 
|                               |  |                    |       |  |          |  |      |                |               |  |                   |   |  |       |      |   | 
|                               |  | (millions of euro) |      
|Viesgo Generacion              |  |                    | 657   |  |          |  | 35   | %              |               |  | no terminal value |   |  |       | 6.7  | % |  |  |      |   |  |  | 15 years | 
|Electra de Viesgo Distribucion |  |                    | 24    |  |          |  | 35   | %              |               |  | 1.5               | % |  |       | 6    | % |  |  |     |   |  |  | 10 years | 
|Enel Rete Gas/ Enel Gas        |  |                    | 583   |  |          |  | 38   | %              |               |  | 0                 | % |  |       | 7    | % |  |  |     |   |  |  | 15 years | 
|Enel North America             |  |                    | 85    |  |          |  | 40.4 | %              |               |  | 0                 | % |  |       | 6.2  | % |  |  |     |   |  |  | 10 years | 
|Enel Latin America             |  |                    | 73    |  |          |  | 25.5 | %              |               |  | 2                 | % |  |       | 10.9 | % |  |  |      |   |  |  | 11 years | 
|Enel Unión Fenosa Renovables   |  |                    | 131   |  |          |  | 35   | %              |               |  | no terminal value |   |  |       |     |   |  |  | 9.3  | % |  |  | 20 years | 
|Maritza                        |  |                    | 15    |  |          |  | 15   | %              |               |  | no terminal value |   |  |       |     |   |  |  | 10.2 | % |  |  | 17 years | 
|WISCO                          |  |                    | 7     |  |          |  | 39   | %              |               |  | no terminal value |   |  |       |      |   |  |  | 7.5  | % |  |  | 20 years | 
|                               |  |                    |       |  |          |  |      |                |               |  |                   |   |  |       |      |   |  | 
|Total                          |  |                    | 1,575 |  |          |  |      |                |               |  |                   |   |  |       |      |   |  |  |      |   |  |  |          | 






|    |                                                          
|--- | ---------------------------------------------------------
|(1) | Perpetual growth rate of cash flow after explicit period.
|   
|(2) | WACC represents the weighted average capital cost.       
|   
|(3) | Ke represents the expected return on capital invested.   

F-38



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                                                    
| | ---------------------------------------------------
| | (12.c) Deferred tax assets  euro
    1,778 million



|                                                                                                   |  |                    |       |            |              |  |      |         |           |  |               |   |  |             |      |   |  |  |       | 
|-------------------------------------------------------------------------------------------------- |  | ------------------ | ----- | ---------- | ------------ |  | ---- | ------- | --------- |  | ------------- | - |  | ----------- | ---- | - |  |  | ----- | 
|                                                                                                   |  |                    |       | Increase/  |              |  |      |         |           |  |              
|                                                                                                   |  |                    |       | (Decrease) |              |  |      |         |           |  |              
|                                                                                                   |  |                    |       | Taken to   |              |  |      |         | Change in |  |               |  
|                                                                                                   |  | At Dec. 31,        |       |            | Income       |  |      | Other   |           |  | Scope of      |   |  | At Dec. 31, |     
|                                                                                                   |  | 2004               |       |            | Statement(1) |  |      | Changes |           |  | Consolidation |   |  | 2005        |     
|                                                                                                   |  |                    |       |            |              |  |      |         |           |  |               |   |  |             |     
|                                                                                                   |  | (millions of euro) |      
|Nature of the temporary differences:                                                               |  |                    |       |            |              |  |      |         |           |  |               |   |  |             |      |   |  |  |       | 
|Impairment of property, plant and equipment and intangible assets                                  |  |                    | 83    |            |              |  | 5    |         |           |  | (1            | ) |  |             | (19  | ) |  |  | 68    | 
|Accruals to provisions for risks and charges and impairment
    losses with deferred deductibility |  |                    | 995   |            |              |  | (251 | )       |           |  | 11            |   |  |             | (188 | ) |  |  | 567   | 
|Tax losses carried forward                                                                         |  |                    | 845   |            |              |  | (86  | )       |           |  | (2            | ) |  |             | (632 | ) |  |  | 125   | 
|Measurement of financial assets                                                                    |  |                    | 164   |            |              |  | (11  | )       |           |  | 36            |   |  |             | (37  | ) |  |  | 152   | 
|Other items                                                                                        |  |                    | 866   |            |              |  | 23   |         |           |  | 5             |   |  |             | (28  | ) |  |  | 866   | 
|                                                                                                   |  |                    |       |            |              |  |      |         |           |  |               |   |  |             |     
|Total                                                                                              |  |                    | 2,953 |            |              |  | (320 | )       |           |  | 49            |   |  |             | (904 | ) |  |  | 1,778 | 






|    |                                                                                                                                              
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes a reduction of euro 43 million relating to
    Telecommunications and Transmission sectors assets until date of
    deconsolidation.





| |   |                                                                                                                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the recognition of the deductible share for 2005 (euro
    247 million) referring to previous years impairments of
    investments on which tax deductibility was deferred over more
    than one year;
|
| |  | a net decrease (euro 86 million) attributable mainly to
    Winds tax losses carried forward until the date of its
    removal from the scope of consolidation;                                       
|
| |  | change in the scope of consolidation essentially attributable to
    the deconsolidation of Wind (euro 852 million).                                                                                   





F-39



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                                                                                  
| | ---------------------------------------------------------------------------------
| | (12.d) Investments accounted for using the equity
    method  euro 1,797 million



|                               |  |                    |       |  |           |  |             |      |  |  |           |  |  |           |       |   |  |  |       |  
|------------------------------ |  | ------------------ | ----- |  | --------- |  | ----------- | ---- |  |  | --------- |  |  | --------- | ----- | - |  |  | ----- | -
|                               |  | At Dec. 31,        |       |  |           |  | At Dec. 31, |      |  |  |           | 
|                               |  | 2005               |       |  | % Holding |  |             | 2004 |  |  | % Holding |  |  | 2005-2004 |      
|                               |  |                    |       |  |           |  |             |      |  |  |           |  |  |           |      
|                               |  | (millions of euro) |      
|Wind Telecomunicazioni SpA     |  |                    | 1,728 |  |           |  | 37.25       | %    |  |  |          |  |  |           |      |   |  |  | 1,728 |  
|Gesam SpA                      |  |                    | 14    |  |           |  | 40.00       | %    |  |  | 13        |  |  |           | 40.00 | % |  |  | 1     |  
|Idrosicilia SpA                |  |                    | 9     |  |           |  | 40.00       | %    |  |  |          |  |  |           |      |   |  |  | 9     |  
|Cesi SpA                       |  |                    | 7     |  |           |  | 25.92       | %    |  |  | 10        |  |  |           | 40.92 | % |  |  | (3    | )
|Immobiliare Foro Bonaparte SpA |  |                    |      |  |           |  |            |      |  |  | 95        |  |  |           | 49.00 | % |  |  | (95   | )
|Leasys SpA                     |  |                    |      |  |           |  |            |      |  |  | 13        |  |  |           | 49.00 | % |  |  | (13   | )
|Idrolatina Srl                 |  |                    |      |  |           |  |            |      |  |  | 8         |  |  |           | 46.88 | % |  |  | (8    | )
|Brindisi LNG SpA               |  |                    |      |  |           |  |            |      |  |  | 8         |  |  |           | 50.00 | % |  |  | (8    | )
|Others                         |  |                    | 39    |  |           |  |            |      |  |  | 43        |  |  |           |      |   |  |  | (4    | )
|                               |  |                    |       |  |           |  |             |      |  |  |           |  |  |           |      
|Total                          |  |                    | 1,797 |  |           |  |             |      |  |  | 190       |  |  |           |       |   |  |  | 1,607 |  





| |   |                                                                                                                                                     
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the inclusion of Idrosicilia and of the residual interest in
    Wind after the disposal in 2005 of 62.75% of that company;                         
|
| |  | the disposal of the investment in Immobiliare Foro Bonaparte;                                                                                       
|
| |  | the sale of the investments in Leasys, Idrolatina and Brindisi
    LNG;                                                                             
|
| |  | the sale of 20% of Idrosicilia and the consequent
    reclassification of the remainder under investments accounted
    for using the equity method;
|
| |  | a reduction in the investment in Cesi following the sale of
    Terna which owns a 15% interest in that company.                                    



| |                                                           
| | ----------------------------------------------------------
| | (12.e) Non-current financial assets  euro
    836 million

|                                                        |  |                    |     |  |             |  |       |           |  |  |        |  
|------------------------------------------------------- |  | ------------------ | --- |  | ----------- |  | ----- | --------- |  |  | ------ | -
|                                                        |  | At Dec. 31,        |     |  | At Dec. 31, |  |       |          
|                                                        |  | 2005               |     |  | 2004        |  |       | 2005-2004 | 
|                                                        |  |                    |     |  |             |  |       |           | 
|                                                        |  | (millions of euro) |    
|Investments in other companies                          |  |                    | 594 |  |             |  | 69    |           |  |  | 525    |  
|Receivables due from associates and other investments   |  |                    | 34  |  |             |  |      |           |  |  | 34     |  
|Advance paid on the acquisition of Slovenské Elektrárne |  |                    | 168 |  |             |  |      |           |  |  | 168    |  
|Financial receivables due from financing entities       |  |                    | 27  |  |             |  | 1,595 |           |  |  | (1,568 | )
|Cash flow hedge and fair value hedge derivatives        |  |                    | 11  |  |             |  | 44    |           |  |  | (33    | )
|Other items                                             |  |                    | 2   |  |             |  | 68    |           |  |  | (66    | )
|                                                        |  |                    |     |  |             |  |       |           | 
|Total                                                   |  |                    | 836 |  |             |  | 1,776 |           |  |  | (940   | )

F-40



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                 |  |                    |     |  |           |  |             |      |  |  |           |  |  |           |       |   |  |  |     |  
|-------------------------------- |  | ------------------ | --- |  | --------- |  | ----------- | ---- |  |  | --------- |  |  | --------- | ----- | - |  |  | --- | -
|                                 |  | At Dec. 31,        |     |  |           |  | At Dec. 31, |      |  |  |           | 
|                                 |  | 2005               |     |  | % Holding |  |             | 2004 |  |  | % Holding |  |  | 2005-2004 |      
|                                 |  |                    |     |  |           |  |             |      |  |  |           |  |  |           |      
|                                 |  | (millions of euro) |    
|Weather Investments              |  |                    | 286 |  |           |  | 5.20        | %    |  |  |          |  |  |           |      |   |  |  | 286 |  
|Terna                            |  |                    | 213 |  |           |  | 5.12        | %    |  |  |          |  |  |           |      |   |  |  | 213 |  
|Red Electrica Espanola           |  |                    | 35  |  |           |  | 1.00        | %    |  |  | 15        |  |  |           | 1.00  | % |  |  | 20  |  
|LaGeo                            |  |                    | 25  |  |           |  | 12.50       | %    |  |  | 25        |  |  |           | 12.50 | % |  |  |    |  
|Echelon                          |  |                    | 20  |  |           |  | 7.54        | %    |  |  | 16        |  |  |           | 7.28  | % |  |  | 4   |  
|Tri Alpha Energy                 |  |                    | 7   |  |           |  | 6.74        | %    |  |  |          |  |  |           |      |   |  |  | 7   |  
|Sheldon Springs Hydro Associates |  |                    |    |  |           |  |            |      |  |  | 8         |  |  |           | 1.00  | % |  |  | (8  | )
|Other                            |  |                    | 8   |  |           |  |            |      |  |  | 5         |  |  |           |      |   |  |  | 3   |  
|                                 |  |                    |     |  |           |  |             |      |  |  |           |  |  |           |      
|Total                            |  |                    | 594 |  |           |  |             |      |  |  | 69        |  |  |           |       |   |  |  | 525 |  









|                              |  |                    |     |  |             |  |       |             |  |  |             |  |  |           |    |  |  |  |     |  
|----------------------------- |  | ------------------ | --- |  | ----------- |  | ----- | ----------- |  |  | ----------- |  |  | --------- | -- |  |  |  | --- | -
|                              |  | Notional Value     |     |  | Fair Value  | 
|                              |  |                    |     |  |             | 
|                              |  | At Dec. 31,        |     |  | At Dec. 31, |  |       | At Dec. 31, |  |  | At Dec. 31, |  |  |          
|                              |  | 2005               |     |  | 2004        |  |       | 2005        |  |  | 2004        |  |  | 2005-2004 |   
|                              |  |                    |     |  |             |  |       |             |  |  |             |  |  |           |   
|                              |  | (millions of euro) |    
|Cash flow hedge derivatives:  |  |                    |     |  |             |  |       |             |  |  |             |  |  |           |    |  |  |  |     |  
| interest rates              |  |                    | 327 |  |             |  | 327   |             |  |  | 11          |  |  |           | 5  |  |  |  | 6   |  
|Fair value hedge derivatives: |  |                    |     |  |             |  |       |             |  |  |             |  |  |           |    |  |  |  |     |  
| interest rates              |  |                    |    |  |             |  | 1,200 |             |  |  |            |  |  |           | 39 |  |  |  | (39 | )
|                              |  |                    |     |  |             |  |       |             |  |  |             |  |  |           |   
|Total                         |  |                    | 327 |  |             |  | 1,527 |             |  |  | 11          |  |  |           | 44 |  |  |  | (33 | )



F-41



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                                                       
| | ------------------------------------------------------
| | (12.f) Other non-current assets  euro
    975 million

|                                                              |  |                    |     |  |             |  |     |           |  |  |     |  
|------------------------------------------------------------- |  | ------------------ | --- |  | ----------- |  | --- | --------- |  |  | --- | -
|                                                              |  | At Dec. 31,        |     |  | At Dec. 31, |  |     |          
|                                                              |  | 2005               |     |  | 2004        |  |     | 2005-2004 | 
|                                                              |  |                    |     |  |             |  |     |           | 
|                                                              |  | (millions of euro) |    
|Tax receivables falling due at more than 12 months            |  |                    |    |  |             |  | 16  |           |  |  | (16 | )
|Receivables from Electricity Equalization Fund                |  |                    | 847 |  |             |  |    |           |  |  | 847 |  
|Other long-term receivables:                                  |  |                    |     |  |             |  |     |           |  |  |     |  
| advances to suppliers                                       |  |                    | 6   |  |             |  | 2   |           |  |  | 4   |  
| tax paid on account on employee termination
    indemnities |  |                    | 19  |  |             |  | 33  |           |  |  | (14 | )
| security deposits                                           |  |                    |    |  |             |  | 5   |           |  |  | (5  | )
| loans to employees                                          |  |                    | 44  |  |             |  | 52  |           |  |  | (8  | )
| other receivables                                           |  |                    | 59  |  |             |  | 46  |           |  |  | 13  |  
|Total                                                         |  |                    | 128 |  |             |  | 138 |           |  |  | (10 | )
|                                                              |  |                    |     |  |             |  |     |           | 
|TOTAL                                                         |  |                    | 975 |  |             |  | 154 |           |  |  | 821 |  



Liabilities


(13)  CURRENT LIABILITIES




| |                                                 
| | ------------------------------------------------
| | (13.a) Short-term loans  euro
    1,361 million



|                                    |  |                    |       |  |                  |  |       |            |  |  |            |  |  |            |       |  |            |  |        |   |  |  |        |  
|----------------------------------- |  | ------------------ | ----- |  | ---------------- |  | ----- | ---------- |  |  | ---------- |  |  | ---------- | ----- |  | ---------- |  | ------ | - |  |  | ------ | -
|                                    |  | At Dec. 31, 2005   |       |  | At Dec. 31, 2004 |  |       | 2005-2004  | 
|                                    |  |                    |       |  |                  |  |       |            | 
|                                    |  | Book Value         |       |  | Fair Value       |  |       | Book Value |  |  | Fair Value |  |  | Book Value |       |  | Fair Value | 
|                                    |  |                    |       |  |                  |  |       |            |  |  |            |  |  |            |       |  |            | 
|                                    |  | (millions of euro) |      
|Short-term amounts due to banks     |  |                    | 970   |  |                  |  | 970   |            |  |  | 2,560      |  |  |            | 2,562 |  |            |  | (1,590 | ) |  |  | (1,592 | )
|Commercial paper                    |  |                    | 275   |  |                  |  | 275   |            |  |  | 2,441      |  |  |            | 2,441 |  |            |  | (2,166 | ) |  |  | (2,166 | )
|Other short-term financial payables |  |                    | 116   |  |                  |  | 116   |            |  |  | 191        |  |  |            | 191   |  |            |  | (75    | ) |  |  | (75    | )
|                                    |  |                    |       |  |                  |  |       |            |  |  |            |  |  |            |       |  |            | 
|Total                               |  |                    | 1,361 |  |                  |  | 1,361 |            |  |  | 5,192      |  |  |            | 5,194 |  |            |  | (3,831 | ) |  |  | (3,833 | )







F-42



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








| |                                               
| | ----------------------------------------------
| | (13.b) Trade payables  euro
    6,610 million





| |                                                            
| | -----------------------------------------------------------
| | (13.c) Current financial liabilities  euro
    294 million

|                                        |  |                    |     |  |             |  |     |           |  |  |      |  
|--------------------------------------- |  | ------------------ | --- |  | ----------- |  | --- | --------- |  |  | ---- | -
|                                        |  | At Dec. 31,        |     |  | At Dec. 31, |  |     |          
|                                        |  | 2005               |     |  | 2004        |  |     | 2005-2004 | 
|                                        |  |                    |     |  |             |  |     |           | 
|                                        |  | (millions of euro) |    
|Deferred financial income               |  |                    | 176 |  |             |  | 240 |           |  |  | (64  | )
|Trading and cash flow hedge derivatives |  |                    | 103 |  |             |  | 188 |           |  |  | (85  | )
|Other items                             |  |                    | 15  |  |             |  | 65  |           |  |  | (50  | )
|                                        |  |                    |     |  |             |  |     |           | 
|Total                                   |  |                    | 294 |  |             |  | 493 |           |  |  | (199 | )



|                             |  |                    |       |  |             |  |       |             |  |  |             |  |  |           |     |  |  |  |     |  
|---------------------------- |  | ------------------ | ----- |  | ----------- |  | ----- | ----------- |  |  | ----------- |  |  | --------- | --- |  |  |  | --- | -
|                             |  | Notional Value     |       |  | Fair Value  | 
|                             |  |                    |       |  |             | 
|                             |  | At Dec. 31,        |       |  | At Dec. 31, |  |       | At Dec. 31, |  |  | At Dec. 31, |  |  |          
|                             |  | 2005               |       |  | 2004        |  |       | 2005        |  |  | 2004        |  |  | 2005-2004 |    
|                             |  |                    |       |  |             |  |       |             |  |  |             |  |  |           |    
|                             |  | (millions of euro) |      
|Cash flow hedge derivatives: |  |                    |       |  |             |  |       |             |  |  |             |  |  |           |     |  |  |  |     |  
| interest rates             |  |                    | 191   |  |             |  | 415   |             |  |  | 10          |  |  |           | 11  |  |  |  | (1  | )
| exchange rates             |  |                    | 20    |  |             |  | 40    |             |  |  |            |  |  |           | 2   |  |  |  | (2  | )
|Total                        |  |                    | 211   |  |             |  | 455   |             |  |  | 10          |  |  |           | 13  |  |  |  | (3  | )
|Trading derivatives:         |  |                    |       |  |             |  |       |             |  |  |             |  |  |           |     |  |  |  |     |  
| interest rates             |  |                    | 610   |  |             |  | 2,109 |             |  |  | 55          |  |  |           | 86  |  |  |  | (31 | )
| exchange rates             |  |                    | 1,147 |  |             |  | 1,368 |             |  |  | 15          |  |  |           | 67  |  |  |  | (52 | )
| commodities                |  |                    | 125   |  |             |  | 18    |             |  |  | 13          |  |  |           | 12  |  |  |  | 1   |  
| other                      |  |                    |      |  |             |  |      |             |  |  | 10          |  |  |           | 10  |  |  |  |    |  
|Total                        |  |                    | 1,882 |  |             |  | 3,495 |             |  |  | 93          |  |  |           | 175 |  |  |  | (82 | )
|                             |  |                    |       |  |             |  |       |             |  |  |             |  |  |           |    
|TOTAL                        |  |                    | 2,093 |  |             |  | 3,950 |             |  |  | 103         |  |  |           | 188 |  |  |  | (85 | )



F-43



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






| |                                                          
| | ---------------------------------------------------------
| | (13.d) Other current liabilities  euro
    4,218 million

|                                                                       |  |                    |       |  |             |  |       |           |  |  |      |  
|---------------------------------------------------------------------- |  | ------------------ | ----- |  | ----------- |  | ----- | --------- |  |  | ---- | -
|                                                                       |  | At Dec. 31,        |       |  | At Dec. 31, |  |       |          
|                                                                       |  | 2005               |       |  | 2004        |  |       | 2005-2004 | 
|                                                                       |  |                    |       |  |             |  |       |           | 
|                                                                       |  | (millions of euro) |      
|Advances                                                               |  |                    | 121   |  |             |  | 151   |           |  |  | (30  | )
|Tax payables                                                           |  |                    | 199   |  |             |  | 239   |           |  |  | (40  | )
|Payables due to the Electricity Equalization Fund                      |  |                    | 406   |  |             |  | 512   |           |  |  | (106 | )
|Social security contributions payable                                  |  |                    | 144   |  |             |  | 176   |           |  |  | (32  | )
|Payables due to employees                                              |  |                    | 353   |  |             |  | 306   |           |  |  | 47   |  
|Payables due to customers for security deposits and
    reimbursements |  |                    | 1,755 |  |             |  | 1,728 |           |  |  | 27   |  
|Other                                                                  |  |                    | 1,240 |  |             |  | 1,496 |           |  |  | (256 | )
|                                                                       |  |                    |       |  |             |  |       |           | 
|Total                                                                  |  |                    | 4,218 |  |             |  | 4,608 |           |  |  | (390 | )







|     |                        
|---- | -----------------------
|(14) | NON-CURRENT LIABILITIES



| |                                                                                  
| | ---------------------------------------------------------------------------------
| | (14.a) Long-term loans (including the current
    portions)  euro 11,902 million





F-44



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                 |  |                    |           |            |               |          |          |               |  |            |         |  |         |      |         |  |      |             |        |      |  |  |      |  |  |      |     |  |        |  |       |  |  |  |     |  |  |  |     |  |  |  |       | 
|-------------------------------- |  | ------------------ | --------- | ---------- | ------------- | -------- | -------- | ------------- |  | ---------- | ------- |  | ------- | ---- | ------- |  | ---- | ----------- | ------ | ---- |  |  | ---- |  |  | ---- | --- |  | ------ |  | ----- |  |  |  | --- |  |  |  | --- |  |  |  | ----- | 
|                                 |  |                    |           |            |               | Notional |          |               |  |            |         |  | Current |      |         | 
|                                 |  |                    |           | Balance at |               |          | Value at |               |  | Balance at |         |  |         |      | Portion |  |      | Maturing in |       
|                                 |  |                    |           |            |               |          |          |               |  |            |         |  |         |      |         |  |      |             |       
|                                 |  |                    |           |            |               |          |          | Long Term     |  |            |         |  |        
|                                 |  | Maturity           |           |            | Dec. 31, 2005 |          |          | Dec. 31, 2004 |  |            | Portion |  |         | 2006 |         |  | 2007 |             |        | 2008 |  |  | 2009 |  |  | 2010 |     |  | Beyond | 
|                                 |  |                    |           |            |               |          |          |               |  |            |         |  |         |      |         |  |      |             |        |      |  |  |      |  |  |      |     |  |        | 
|                                 |  | (millions of euro) |          
|Bonds:                           |  |                    |           |            |               |          |          |               |  |            |         |  |         |      |         |  |      |             |        |      |  |  |      |  |  |      |     |  |        |  |       |  |  |  |     |  |  |  |     |  |  |  |       | 
| listed, fixed rate             |  |                    | 2006-2033 |            |               |          | 5,621    |               |  |            | 5,663   |  |         |      | 7,200   |  |      |             | 5,396  |      |  |  | 225  |  |  |      |    |  |        |  | 997   |  |  |  |    |  |  |  | 100 |  |  |  | 4,299 | 
| listed, floating rate          |  |                    | 2006-2012 |            |               |          | 799      |               |  |            | 802     |  |         |      | 402     |  |      |             | 633    |      |  |  | 166  |  |  |      |    |  |        |  | 50    |  |  |  | 86  |  |  |  | 100 |  |  |  | 397   | 
| unlisted, fixed rate           |  |                    | 2006-2008 |            |               |          | 94       |               |  |            | 118     |  |         |      | 163     |  |      |             | 58     |      |  |  | 36   |  |  |      |    |  |        |  | 58    |  |  |  |    |  |  |  |    |  |  |  |      | 
| unlisted, floating rate        |  |                    | 2006-2032 |            |               |          | 1,933    |               |  |            | 1,933   |  |         |      | 1,851   |  |      |             | 1,912  |      |  |  | 21   |  |  |      | 22  |  |        |  | 21    |  |  |  | 330 |  |  |  | 79  |  |  |  | 1,460 | 
| EU institutions, fixed rate    |  |                    | 2006-2009 |            |               |          | 77       |               |  |            | 77      |  |         |      | 116     |  |      |             | 41     |      |  |  | 36   |  |  |      | 31  |  |        |  | 9     |  |  |  | 1   |  |  |  |    |  |  |  |      | 
| EU institutions, floating rate |  |                    | 2006-2009 |            |               |          | 6        |               |  |            | 6       |  |         |      | 9       |  |      |             | 3      |      |  |  | 3    |  |  |      | 1   |  |        |  | 1     |  |  |  | 1   |  |  |  |    |  |  |  |      | 
|Total                            |  |                    |           |            |               |          | 8,530    |               |  |            | 8,599   |  |         |      | 9,741   |  |      |             | 8,043  |      |  |  | 487  |  |  |      | 54  |  |        |  | 1,136 |  |  |  | 418 |  |  |  | 279 |  |  |  | 6,156 | 
|Bank loans:                      |  |                    |           |            |               |          |          |               |  |            |         |  |         |      |         |  |      |             |        |      |  |  |      |  |  |      |     |  |        |  |       |  |  |  |     |  |  |  |     |  |  |  |       | 
| fixed rate                     |  |                    | 2006-2015 |            |               |          | 80       |               |  |            | 80      |  |         |      | 89      |  |      |             | 71     |      |  |  | 9    |  |  |      | 6   |  |        |  | 6     |  |  |  | 6   |  |  |  | 6   |  |  |  | 47    | 
| floating rate                  |  |                    | 2006-2023 |            |               |          | 777      |               |  |            | 791     |  |         |      | 8,056   |  |      |             | 587    |      |  |  | 190  |  |  |      | 55  |  |        |  | 111   |  |  |  | 55  |  |  |  | 61  |  |  |  | 305   | 
| EU institutions, fixed rate    |  |                    | 2006-2009 |            |               |          | 86       |               |  |            | 86      |  |         |      | 121     |  |      |             | 56     |      |  |  | 30   |  |  |      | 30  |  |        |  | 12    |  |  |  | 14  |  |  |  |    |  |  |  |      | 
| EU institutions, floating rate |  |                    | 2006-2018 |            |               |          | 2,238    |               |  |            | 2,238   |  |         |      | 3,307   |  |      |             | 2,068  |      |  |  | 170  |  |  |      | 164 |  |        |  | 209   |  |  |  | 209 |  |  |  | 209 |  |  |  | 1,277 | 
|Total                            |  |                    |           |            |               |          | 3,181    |               |  |            | 3,195   |  |         |      | 11,573  |  |      |             | 2,782  |      |  |  | 399  |  |  |      | 255 |  |        |  | 338   |  |  |  | 284 |  |  |  | 276 |  |  |  | 1,629 | 
|Non-bank loans                   |  |                    |           |            |               |          |          |               |  |            |         |  |         |      |         |  |      |             |        |      |  |  |      |  |  |      |     |  |        |  |       |  |  |  |     |  |  |  |     |  |  |  |       | 
| fixed rate                     |  |                    | 2006-2026 |            |               |          | 138      |               |  |            | 138     |  |         |      | 131     |  |      |             | 96     |      |  |  | 42   |  |  |      | 12  |  |        |  | 14    |  |  |  | 8   |  |  |  | 7   |  |  |  | 55    | 
| floating rate                  |  |                    | 2006-2020 |            |               |          | 53       |               |  |            | 53      |  |         |      | 243     |  |      |             | 46     |      |  |  | 7    |  |  |      | 2   |  |        |  | 2     |  |  |  | 2   |  |  |  | 2   |  |  |  | 38    | 
|Total                            |  |                    |           |            |               |          | 191      |               |  |            | 191     |  |         |      | 374     |  |      |             | 142    |      |  |  | 49   |  |  |      | 14  |  |        |  | 16    |  |  |  | 10  |  |  |  | 9   |  |  |  | 93    | 
|                                 |  |                    |           |            |               |          |          |               |  |            |         |  |         |      |         |  |      |             |        |      |  |  |      |  |  |      |     |  |        |  |       |  | 
|TOTAL                            |  |                    |           |            |               |          | 11,902   |               |  |            | 11,985  |  |         |      | 21,688  |  |      |             | 10,967 |      |  |  | 935  |  |  |      | 323 |  |        |  | 1,490 |  |  |  | 712 |  |  |  | 564 |  |  |  | 7,878 | 





|                          |  |               |        |          |               |  |                   |               |  |           |               |  |  |               |      |   |  |  |      |  
|------------------------- |  | ------------- | ------ | -------- | ------------- |  | ----------------- | ------------- |  | --------- | ------------- |  |  | ------------- | ---- | - |  |  | ---- | -
|                          |  |               |        | Notional |               |  | Notional Interest |               |  | Effective |              
|                          |  | Balance at    |        |          | Value at      |  |                   | Rate          |  |           | Interest Rate | 
|                          |  |               |        |          |               |  |                   |               |  |           |               | 
|                          |  | Dec. 31, 2005 |        |          | Dec. 31, 2004 |  |                   | Dec. 31, 2005 |  |           | Dec. 31, 2005 |  |  | Dec. 31, 2005 |     
|                          |  |               |        |          |               |  |                   |               |  |           |               |  |  |               |     
|Euro                      |  |               | 11,444 |          |               |  | 20,878            |               |  |           | 11,503        |  |  |               | 3.83 | % |  |  | 3.84 | %
|U.S. dollar               |  |               | 185    |          |               |  | 212               |               |  |           | 185           |  |  |               | 6.49 | % |  |  | 6.57 | %
|Pound sterling            |  |               | 62     |          |               |  | 63                |               |  |           | 62            |  |  |               | 5.86 | % |  |  | 5.86 | %
|Swiss franc               |  |               | 22     |          |               |  | 30                |               |  |           | 22            |  |  |               | 6.70 | % |  |  | 6.70 | %
|Japanese yen              |  |               | 109    |          |               |  | 116               |               |  |           | 133           |  |  |               | 1.41 | % |  |  | 1.51 | %
|Brazilian real            |  |               |       |          |               |  | 332               |               |  |           |              |  |  |               |     |   |  |  |     |  
|Other currencies          |  |               | 80     |          |               |  | 57                |               |  |           | 80            |  |  |               | 8.79 | % |  |  | 8.79 | %
|Total non-euro currencies |  |               | 458    |          |               |  | 810               |               |  |           | 482           |  |  |               |      |   |  |  |      |  
|                          |  |               |        |          |               |  |                   |               |  |           |               |  |  |               |     
|TOTAL                     |  |               | 11,902 |          |               |  | 21,688            |               |  |           | 11,985        |  |  |               |      |   |  |  |      |  

F-45



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|               |  |                  |        |  |            |  |            |               |  |     |           |          |      |             |                |  |               |  |     |  |  |  |        | 
|-------------- |  | ---------------- | ------ |  | ---------- |  | ---------- | ------------- |  | --- | --------- | -------- | ---- | ----------- | -------------- |  | ------------- |  | --- |  |  |  | ------ | 
|               |  | Notional Value   |        |  |            |  | Changes in |               |  |     |           | Exchange |      |             | Notional Value | 
|               |  |                  |        |  |            |  | Scope of   |               |  | New |           |          | Rate |             |                |  |              
|               |  | At Dec. 31, 2004 |        |  | Repayments |  |            | Consolidation |  |     | Financing |          |      | Differences |                |  | Dec. 31, 2005 | 
|               |  |                  |        |  |            |  |            |               |  |     |           |          |      |             |                |  |               | 
|Bonds          |  |                  | 9,782  |  |            |  | (880       | )             |  |     | (1,390    | )        |      |             | 1,087          |  |               |  |    |  |  |  | 8,599  | 
|Bank loans     |  |                  | 11,672 |  |            |  | (2,756     | )             |  |     | (6,525    | )        |      |             | 664            |  |               |  | 140 |  |  |  | 3,195  | 
|Non-bank loans |  |                  | 374    |  |            |  | (22        | )             |  |     | (191      | )        |      |             | 8              |  |               |  | 22  |  |  |  | 191    | 
|               |  |                  |        |  |            |  |            |               |  |     |           |          |      |             |                |  |               | 
|Total          |  |                  | 21,828 |  |            |  | (3,658     | )             |  |     | (8,106    | )        |      |             | 1,759          |  |               |  | 162 |  |  |  | 11,985 | 







|                            |  |                                  |  |                                
|--------------------------- |  | -------------------------------- |  | -------------------------------
|                            |  | 7-Year Bond  Floating Rate Bond |  | 7-Year Bond  Fixed Rate Bond  
|                            |  |                                  |  |                                
|Amount                      |  | euro 400 million                 |  | euro 600 million               
|Repayment                   |  | Single amount on March 14, 2012  |  | Single amount on March 14, 2012
|Interest rate               |  | Six-month Euribor + 0.10%        |  | 3.625% annually                
|Issue price                 |  | 100.00                           |  | 99.836                         
|Early repayment             |  | Not allowed                      |  | Not allowed                    
|Listed on stock exchange of |  | Milan                            |  | Milan                          



36-month


F-46



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                           |  |                    |        |  |                  |  |        |       |  |  |        |  |  |  |        | 
|-------------------------- |  | ------------------ | ------ |  | ---------------- |  | ------ | ----- |  |  | ------ |  |  |  | ------ | 
|                           |  | At Dec. 31, 2005   |        |  | At Dec. 31, 2004 | 
|                           |  |                    |        |  |                  | 
|                           |  | Book               |        |  | Fair             |  |        | Book  |  |  | Fair   | 
|                           |  | Value              |        |  | Value            |  |        | Value |  |  | Value  | 
|                           |  |                    |        |  |                  |  |        |       |  |  |        | 
|                           |  | (millions of euro) |       
|Bonds:                     |  |                    | 8,530  |  |                  |  | 9,061  |       |  |  | 9,741  |  |  |  | 10,168 | 
| fixed-rate portion       |  |                    | 5,792  |  |                  |  | 6,235  |       |  |  | 7,484  |  |  |  | 7,909  | 
| floating-rate portion    |  |                    | 2,738  |  |                  |  | 2,826  |       |  |  | 2,257  |  |  |  | 2,259  | 
|Bank loans:                |  |                    | 3,181  |  |                  |  | 3,185  |       |  |  | 11,573 |  |  |  | 11,659 | 
| fixed-rate bank loans    |  |                    | 166    |  |                  |  | 173    |       |  |  | 210    |  |  |  | 223    | 
| floating-rate bank loans |  |                    | 3,015  |  |                  |  | 3,012  |       |  |  | 11,363 |  |  |  | 11,436 | 
|Non-bank loans:            |  |                    | 191    |  |                  |  | 191    |       |  |  | 374    |  |  |  | 375    | 
| fixed-rate loans         |  |                    | 138    |  |                  |  | 138    |       |  |  | 131    |  |  |  | 131    | 
| floating-rate loans      |  |                    | 53     |  |                  |  | 53     |       |  |  | 243    |  |  |  | 244    | 
|                           |  |                    |        |  |                  |  |        |       |  |  |        | 
|Total                      |  |                    | 11,902 |  |                  |  | 12,437 |       |  |  | 21,688 |  |  |  | 22,202 | 





|                           |  |                    |        |  |                  |  |        |           |  |  |        |  
|-------------------------- |  | ------------------ | ------ |  | ---------------- |  | ------ | --------- |  |  | ------ | -
|                           |  | At Dec. 31, 2005   |        |  | At Dec. 31, 2004 |  |        | 2005-2004 | 
|                           |  |                    |        |  |                  |  |        |           | 
|                           |  | (millions of euro) |       
|Bonds:                     |  |                    | 8,043  |  |                  |  | 8,866  |           |  |  | (823   | )
| fixed-rate bond          |  |                    | 5,495  |  |                  |  | 6,626  |           |  |  | (1,131 | )
| floating-rate bond       |  |                    | 2,548  |  |                  |  | 2,240  |           |  |  | 308    |  
|Bank loans:                |  |                    | 2,782  |  |                  |  | 11,101 |           |  |  | (8,319 | )
| fixed-rate bank loans    |  |                    | 127    |  |                  |  | 156    |           |  |  | (29    | )
| floating-rate bank loans |  |                    | 2,655  |  |                  |  | 10,945 |           |  |  | (8,290 | )
|Non-bank loans:            |  |                    | 142    |  |                  |  | 324    |           |  |  | (182   | )
| fixed-rate bond          |  |                    | 96     |  |                  |  | 119    |           |  |  | (23    | )
| floating-rate bond       |  |                    | 46     |  |                  |  | 205    |           |  |  | (159   | )
|                           |  |                    |        |  |                  |  |        |           | 
|Total                      |  |                    | 10,967 |  |                  |  | 20,291 |           |  |  | (9,324 | )

F-47



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                           |  |                    |     |  |                  |  |       |           |  |  |      |  
|-------------------------- |  | ------------------ | --- |  | ---------------- |  | ----- | --------- |  |  | ---- | -
|                           |  | At Dec. 31, 2005   |     |  | At Dec. 31, 2004 |  |       | 2005-2004 | 
|                           |  |                    |     |  |                  |  |       |           | 
|                           |  | (millions of euro) |    
|Bonds:                     |  |                    | 487 |  |                  |  | 875   |           |  |  | (388 | )
| fixed-rate bond          |  |                    | 297 |  |                  |  | 858   |           |  |  | (561 | )
| floating-rate bond       |  |                    | 190 |  |                  |  | 17    |           |  |  | 173  |  
|Bank loans:                |  |                    | 399 |  |                  |  | 472   |           |  |  | (73  | )
| fixed-rate bank loans    |  |                    | 39  |  |                  |  | 54    |           |  |  | (15  | )
| floating-rate bank loans |  |                    | 360 |  |                  |  | 418   |           |  |  | (58  | )
|Non-bank loans:            |  |                    | 49  |  |                  |  | 50    |           |  |  | (1   | )
| fixed-rate bond          |  |                    | 42  |  |                  |  | 12    |           |  |  | 30   |  
| floating-rate bond       |  |                    | 7   |  |                  |  | 38    |           |  |  | (31  | )
|                           |  |                    |     |  |                  |  |       |           | 
|Total                      |  |                    | 935 |  |                  |  | 1,397 |           |  |  | (462 | )





| |                                                                            
| | ---------------------------------------------------------------------------
| | (14.b) Post-employment and other employee
    benefits  euro 2,662 million





| |                     
| | --------------------
| | Termination benefits

cost-of




| |                                            
| | -------------------------------------------
| | Additional months pay and similar benefits





| |              
| | -------------
| | Loyalty bonus



F-48



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                                   
| | ----------------------------------
| | Company supplementary pension plan





| |                
| | ---------------
| | Healthcare plan





| |                      
| | ---------------------
| | Electricity discounts







F-49



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                                                           |  |                    |       |     |      |  |       |  
|-------------------------------------------------------------------------- |  | ------------------ | ----- | --- | ---- |  | ----- | -
|                                                                           |  | 2005               |       |     | 2004 | 
|                                                                           |  |                    |       |     |      | 
|                                                                           |  | (millions of euro) |      
|Benefits due on termination of employment and other long-term
    benefits |  |                    |       |     |      |  |       |  
|Benefit obligations at January 1                                           |  |                    | 1,696 |     |      |  | 1,887 |  
|Service cost                                                               |  |                    | 83    | (1) |      |  | 90    |  
|Interest cost                                                              |  |                    | 68    | (1) |      |  | 90    |  
|Benefit paid                                                               |  |                    | (229  | )   |      |  | (371  | )
|Changes in scope of consolidation                                          |  |                    | (113  | )   |      |  |      |  
|Unrecognized actuarial (gains)/losses in year                              |  |                    | (3    | )   |      |  |      |  
|Benefit obligations at December 31                                         |  |                    | 1,502 |     |      |  | 1,696 |  
|                                                                          
|Liabilities at December 31                                                 |  |                    | 1,505 |     |      |  | 1,696 |  
|Other post employment benefits                                             |  |                    |       |     |      |  |       |  
|Benefit obligations at January 1                                           |  |                    | 1,214 |     |      |  | 1,137 |  
|Service cost                                                               |  |                    | 8     | (1) |      |  | 74    |  
|Interest cost                                                              |  |                    | 49    | (1) |      |  | 54    |  
|Benefit paid                                                               |  |                    | (53   | )   |      |  | (51   | )
|Changes in scope of consolidation                                          |  |                    | (61   | )   |      |  |      |  
|Unrecognized actuarial (gains)/losses in year                              |  |                    | 19    |     |      |  |      |  
|Benefit obligations at December 31                                         |  |                    | 1,176 |     |      |  | 1,214 |  
|                                                                          
|Liabilities at December 31                                                 |  |                    | 1,157 |     |      |  | 1,214 |  






|    |                                                                                        
|--- | ---------------------------------------------------------------------------------------
|(1) | Includes Telecommunications and Transmission sectors until date
    of deconsolidation.







|                                     |  |      |      |   |      |  |      |  
|------------------------------------ |  | ---- | ---- | - | ---- |  | ---- | -
|                                     |  | 2005 |      |   | 2004 | 
|                                     |  |      |      |   |      | 
|Discount rate                        |  |      | 4.00 | % |      |  | 4.25 | %
|Rate of increase in personnel costs  |  |      | 3.00 | % |      |  | 3.00 | %
|Rate of increase in healthcare costs |  |      | 3.00 | % |      |  | 3.00 | %

F-50



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                                                                 
| | ----------------------------------------------------------------
| | (14.c) Provisions for risks and charges  euro
    1,267 million

|                                                   |  |                     |       |             |             |  |            |               |  |                 |         |   |  |                  |      |   |  |  |       | 
|-------------------------------------------------- |  | ------------------- | ----- | ----------- | ----------- |  | ---------- | ------------- |  | --------------- | ------- | - |  | ---------------- | ---- | - |  |  | ----- | 
|                                                   |  |                     |       | Provision   |             |  | Changes in |               |  | Utilization and |         |   | 
|                                                   |  |                     |       | Made During |             |  | Scope of   |               |  | Other           |         |   | 
|                                                   |  | At Dec. 31, 2004    |       |             | the Year(1) |  |            | Consolidation |  |                 | Changes |   |  | At Dec. 31, 2005 |     
|                                                   |  |                     |       |             |             |  |            |               |  |                 |         |   |  |                  |     
|                                                   |  | (millions of euro ) |      
|Provision for litigation, risks and other charges: |  |                     |       |             |             |  |            |               |  |                 |         |   |  |                  |      |   |  |  |       | 
| litigation                                       |  |                     | 382   |             |             |  | 56         |               |  |                 | (38     | ) |  |                  | (59  | ) |  |  | 341   | 
| CO
    2emissions charges                        |  |                     |      |             |             |  | 228        |               |  |                 |        |   |  |                  |     |   |  |  | 228   | 
| other                                            |  |                     | 727   |             |             |  | 171        |               |  |                 | (134    | ) |  |                  | (187 | ) |  |  | 577   | 
|Total                                              |  |                     | 1,109 |             |             |  | 455        |               |  |                 | (172    | ) |  |                  | (246 | ) |  |  | 1,146 | 
|Provision for early-retirement incentives          |  |                     | 295   |             |             |  | 69         |               |  |                 | (8      | ) |  |                  | (235 | ) |  |  | 121   | 
|                                                   |  |                     |       |             |             |  |            |               |  |                 |         |   |  |                  |     
|TOTAL                                              |  |                     | 1,404 |             |             |  | 524        |               |  |                 | (180    | ) |  |                  | (481 | ) |  |  | 1,267 | 






|    |                                                                                                                         
|--- | ------------------------------------------------------------------------------------------------------------------------
|(1) | Includes euro 15 million in respect of
    Telecommunications and Transmission segments until their
    deconsolidation.



| |           
| | ----------
| | Litigation





| |      
| | -----
| | Other





| |                                          
| | -----------------------------------------
| | Provision for early retirement incentives



F-51



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                                                         
| | --------------------------------------------------------
| | (14.d) Deferred tax liabilities  euro
    2,464 million



|                                                |  |                    |       |            |              |  |     |         |            |  |               |  |  |             |      |   |  |  |       | 
|----------------------------------------------- |  | ------------------ | ----- | ---------- | ------------ |  | --- | ------- | ---------- |  | ------------- |  |  | ----------- | ---- | - |  |  | ----- | 
|                                                |  |                    |       | Increase   |              |  |     |         |            |  |              
|                                                |  |                    |       | (Decrease) |              |  |     |         |            |  |              
|                                                |  |                    |       | Taken to   |              |  |     |         | Changes in |  |               | 
|                                                |  | At Dec. 31,        |       |            | Income       |  |     | Other   |            |  | Scope of      |  |  | At Dec. 31, |     
|                                                |  | 2004               |       |            | Statement(1) |  |     | Changes |            |  | Consolidation |  |  | 2005        |     
|                                                |  |                    |       |            |              |  |     |         |            |  |               |  |  |             |     
|                                                |  | (millions of euro) |      
|Nature of the temporary differences:            |  |                    |       |            |              |  |     |         |            |  |               |  |  |             |      |   |  |  |       | 
|Differences on non-current and financial assets |  |                    | 2,100 |            |              |  | 282 |         |            |  | 20            |  |  |             | (502 | ) |  |  | 1,900 | 
|Income subject to deferred taxation             |  |                    | 98    |            |              |  | (41 | )       |            |  |              |  |  |             |     |   |  |  | 57    | 
|Allocation of goodwill to assets                |  |                    | 61    |            |              |  | (3  | )       |            |  | 39            |  |  |             |     |   |  |  | 97    | 
|Measurement of financial instruments            |  |                    | 12    |            |              |  | (19 | )       |            |  | 105           |  |  |             | (2   | ) |  |  | 96    | 
|Other items                                     |  |                    | 241   |            |              |  | 64  |         |            |  |              |  |  |             | 9    |   |  |  | 314   | 
|                                                |  |                    |       |            |              |  |     |         |            |  |               |  |  |             |     
|Total                                           |  |                    | 2,512 |            |              |  | 283 |         |            |  | 164           |  |  |             | (495 | ) |  |  | 2,464 | 






|    |                                                                                                                                               
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes a postive effect of euro 38 million in
    respect of Telecommunications and Transmission segments until
    date of deconsolidation.





| |                                                                
| | ---------------------------------------------------------------
| | (14.e) Non-current financial liabilities  euro
    262 million



|                             |  |                    |       |  |             |  |       |             |  |  |             |  |  |           |     |  |  |  |      |  
|---------------------------- |  | ------------------ | ----- |  | ----------- |  | ----- | ----------- |  |  | ----------- |  |  | --------- | --- |  |  |  | ---- | -
|                             |  | Notional Amount    |       |  | Fair Value  |  |       |            
|                             |  |                    |       |  |             |  |       |            
|                             |  | At Dec. 31,        |       |  | At Dec. 31, |  |       | At Dec. 31, |  |  | At Dec. 31, |  |  |          
|                             |  | 2005               |       |  | 2004        |  |       | 2005        |  |  | 2004        |  |  | 2005-2004 |    
|                             |  |                    |       |  |             |  |       |             |  |  |             |  |  |           |    
|                             |  | (millions of euro) |      
|Cash flow hedge derivatives: |  |                    |       |  |             |  |       |             |  |  |             |  |  |           |     |  |  |  |      |  
| interest rates             |  |                    | 3,749 |  |             |  | 6,268 |             |  |  | 262         |  |  |           | 370 |  |  |  | (108 | )







| |                                                           
| | ----------------------------------------------------------
| | (14.f) Other non-current liabilities  euro
    18 million

|                                     |  |                    |    |  |                  |  |     |           |  |  |      |  
|------------------------------------ |  | ------------------ | -- |  | ---------------- |  | --- | --------- |  |  | ---- | -
|                                     |  | At Dec. 31, 2005   |    |  | At Dec. 31, 2004 |  |     | 2005-2004 | 
|                                     |  |                    |    |  |                  |  |     |           | 
|                                     |  | (millions of euro) |   
|Payables due to Ferrovie dello Stato |  |                    |   |  |                  |  | 202 |           |  |  | (202 | )
|Other items                          |  |                    | 18 |  |                  |  | 16  |           |  |  | 2    |  
|                                     |  |                    |    |  |                  |  |     |           | 
|Total                                |  |                    | 18 |  |                  |  | 218 |           |  |  | (200 | )

F-52



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|     |                                                                  
|---- | -----------------------------------------------------------------
|(15) | EQUITY ATTRIBUTABLE TO THE SHAREHOLDERS OF THE PARENT
    COMPANY



| |                                                                                        
| | ---------------------------------------------------------------------------------------
| | Equity attributable to the shareholders of the Parent
    Company  euro 19,057 million





| |                                   
| | ----------------------------------
| | Share capital  euro 6,157 million





| |                                    
| | -----------------------------------
| | Other reserves  euro 4,219 million



| |                                         
| | ----------------------------------------
| | Share premium reserve  euro 511 million





| |                                   
| | ----------------------------------
| | Legal reserve  euro 1,453 million





| |                                                 
| | ------------------------------------------------
| | Reserve pursuant to Law  euro
    2,215 million





| |                                                           
| | ----------------------------------------------------------
| | Foreign currency translation reserve  euro
    40 million





| |                                                           
| | ----------------------------------------------------------
| | Retained earnings carried forward  euro
    5,953 million



F-53



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                                                                      
| | ---------------------------------------------------------------------
| | Reserve for measurement of financial instruments 
    euro 2 million





|     |                
|---- | ---------------
|(16) | RELATED PARTIES













|                         |  |                    |       |  |                  |  |       |       |  |  |          |  |  |  |        | 
|------------------------ |  | ------------------ | ----- |  | ---------------- |  | ----- | ----- |  |  | -------- |  |  |  | ------ | 
|                         |  | Balance Sheet at   |       |  | Income Statement | 
|                         |  | Dec. 31, 2005      |       |  | 2005             | 
|                         |  |                    |       |  |                  | 
|                         |  | Receivables        |       |  | Payables         |  |       | Costs |  |  | Revenues | 
|                         |  |                    |       |  |                  |  |       |       |  |  |          | 
|                         |  | (millions of euro) |      
|Continuing operations:   |  |                    |       |  |                  |  |       |       |  |  |          |  |  |  |        | 
| Single Buyer           |  |                    | 653   |  |                  |  | 2,199 |       |  |  | 10,150   |  |  |  | 1,160  | 
| ISO                    |  |                    | 200   |  |                  |  | 231   |       |  |  | 1,294    |  |  |  | 1,745  | 
| Market Operator        |  |                    | 1,230 |  |                  |  | 210   |       |  |  | 1,159    |  |  |  | 6,308  | 
| Italian Post Office    |  |                    | 1     |  |                  |  | 20    |       |  |  | 98       |  |  |  | 14     | 
| ENI                    |  |                    | 2     |  |                  |  | 589   |       |  |  | 1,848    |  |  |  | 123    | 
| Terna(1)               |  |                    | 378   |  |                  |  | 334   |       |  |  | 292      |  |  |  | 316    | 
|Discontinued operations: |  |                    |       |  |                  |  |       |       |  |  |          |  |  |  |        | 
| ISO                    |  |                    |      |  |                  |  |      |       |  |  |         |  |  |  | 710    | 
| Italian Post Office    |  |                    |      |  |                  |  |      |       |  |  | 1        |  |  |  | 1      | 
|                         |  |                    |       |  |                  |  |       |       |  |  |          | 
|Total                    |  |                    | 2,464 |  |                  |  | 3,583 |       |  |  | 14,842   |  |  |  | 10,377 | 






|    |                                                                                                  
|--- | -------------------------------------------------------------------------------------------------
|(1) | Costs and revenues refer to the period from the date of
    deconsolidation to December 31, 2005.

F-54



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)












|                                    |  |                    |     |  |                  |  |     |       |  |  |          |  |  |  |    | 
|----------------------------------- |  | ------------------ | --- |  | ---------------- |  | --- | ----- |  |  | -------- |  |  |  | -- | 
|                                    |  | Balance Sheet at   |     |  | Income Statement | 
|                                    |  | Dec. 31, 2005      |     |  | 2005             | 
|                                    |  |                    |     |  |                  | 
|                                    |  | Receivables        |     |  | Payables         |  |     | Costs |  |  | Revenues | 
|                                    |  |                    |     |  |                  |  |     |       |  |  |          | 
|                                    |  | (millions of euro) |    
|Continuing operations:              |  |                    |     |  |                  |  |     |       |  |  |          |  |  |  |    | 
| Wind Telecomunicazioni SpA(1)     |  |                    | 291 |  |                  |  | 193 |       |  |  | 134      |  |  |  | 26 | 
| Cesi SpA                          |  |                    | 4   |  |                  |  | 24  |       |  |  | 23       |  |  |  | 4  | 
| Immobiliare Foro Bonaparte SpA(2) |  |                    |    |  |                  |  |    |       |  |  | 20       |  |  |  |   | 
| Leasys SpA(2)                     |  |                    |    |  |                  |  |    |       |  |  | 152      |  |  |  | 2  | 
|Discontinued operations:            |  |                    |     |  |                  |  |     |       |  |  |          |  |  |  |    | 
| Wind Telecomunicazioni SpA(1)     |  |                    |    |  |                  |  |    |       |  |  | 4        |  |  |  |   | 
| Cesi SpA                          |  |                    |    |  |                  |  |    |       |  |  | 1        |  |  |  |   | 
| Immobiliare Foro Bonaparte SpA(2) |  |                    |    |  |                  |  |    |       |  |  | 1        |  |  |  |   | 
| Leasys SpA(2)                     |  |                    |    |  |                  |  |    |       |  |  | 10       |  |  |  |   | 
| Idrolatina Srl(2)                 |  |                    |    |  |                  |  |    |       |  |  | 2        |  |  |  |   | 
|                                    |  |                    |     |  |                  |  |     |       |  |  |          | 
|Total                               |  |                    | 295 |  |                  |  | 217 |       |  |  | 347      |  |  |  | 32 | 






|    |                                                                                                  
|--- | -------------------------------------------------------------------------------------------------
|(1) | Costs and revenues refer to the period from the date of
    deconsolidation to December 31, 2005.
|   
|(2) | Costs and revenues refer to the period from January 1, 2005
    until date of disposal.          

F-55



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|     |                                       
|---- | --------------------------------------
|(17) | CONTRACTUAL COMMITMENTS AND GUARANTEES



|                        |  |                    |        |  |                  |  |        |           |  |  |        |  
|----------------------- |  | ------------------ | ------ |  | ---------------- |  | ------ | --------- |  |  | ------ | -
|                        |  | At Dec. 31, 2005   |        |  | At Dec. 31, 2004 |  |        | 2005-2004 | 
|                        |  |                    |        |  |                  |  |        |           | 
|                        |  | (millions of euro) |       
|Guarantees given        |  |                    |        |  |                  |  |        |           |  |  |        |  
|Guarantees              |  |                    | 1,244  |  |                  |  | 825    |           |  |  | 419    |  
|Total                   |  |                    | 1,244  |  |                  |  | 825    |           |  |  | 419    |  
|Other commitments       |  |                    |        |  |                  |  |        |           |  |  |        |  
|Commitments for:        |  |                    |        |  |                  |  |        |           |  |  |        |  
| electricity purchases |  |                    | 4,013  |  |                  |  | 3,642  |           |  |  | 371    |  
| fuel purchases        |  |                    | 51,647 |  |                  |  | 28,542 |           |  |  | 23,105 |  
| various supplies      |  |                    | 4,111  |  |                  |  | 2,101  |           |  |  | 2,010  |  
| tenders               |  |                    | 204    |  |                  |  | 2,032  |           |  |  | (1,828 | )
| other                 |  |                    | 3      |  |                  |  | 52     |           |  |  | (49    | )
|Total                   |  |                    | 59,978 |  |                  |  | 36,369 |           |  |  | 23,609 |  
|                        |  |                    |        |  |                  |  |        |           | 
|TOTAL                   |  |                    | 61,222 |  |                  |  | 37,194 |           |  |  | 24,028 |  







| |   |                       
| | - | ----------------------
| |  | 2006: euro 74 million;
|
| |  | 2007: euro 74 million;
|
| |  | 2008: euro 74 million;
|
| |  | 2009: euro 73 million;
|
| |  | 2010: euro 68 million.



F-56



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                  |  |                    |        |  |          |  |     |      |  |  |                   |  |  |       |     |  |  |  |        | 
|----------------- |  | ------------------ | ------ |  | -------- |  | --- | ---- |  |  | ----------------- |  |  | ----- | --- |  |  |  | ------ | 
|                  |  | Natural Gas        |        |  | Fuel Oil |  |     | Coal |  |  | Logistic Services |  |  | Total |    
|                  |  |                    |        |  |          |  |     |      |  |  |                   |  |  |       |    
|                  |  | (millions of euro) |       
|Period:           |  |                    |        |  |          |  |     |      |  |  |                   |  |  |       |     |  |  |  |        | 
| 2006-2010       |  |                    | 18,209 |  |          |  | 117 |      |  |  | 504               |  |  |       | 236 |  |  |  | 19,066 | 
| 2011-2015       |  |                    | 17,301 |  |          |  |    |      |  |  | 206               |  |  |       | 60  |  |  |  | 17,567 | 
| 2016-2020       |  |                    | 13,227 |  |          |  |    |      |  |  | 207               |  |  |       | 46  |  |  |  | 13,480 | 
| 2021 and beyond |  |                    | 1,410  |  |          |  |    |      |  |  | 124               |  |  |       |    |  |  |  | 1,534  | 
|                  |  |                    |        |  |          |  |     |      |  |  |                   |  |  |       |    
|Total             |  |                    | 50,147 |  |          |  | 117 |      |  |  | 1,041             |  |  |       | 342 |  |  |  | 51,647 | 



|     |                                  
|---- | ---------------------------------
|(18) | CONTINGENT LIABILITIES AND ASSETS

Litigation on rates




Environmental litigation












F-57



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






Out-of










F-58



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


INPS circular no. 63 of May 6, 2005 concerning
contribution obligations in respect of the Cassa Integrazione
Guadagni (CIG), Cassa Integrazione Guadagni Straordinaria
(CIGS), Disoccupazione Involontaria (DS) and Mobilità
(unemployment benefit schemes)
















Inquiries by the Milan Public Prosecutors Office and
the State Audit Court




F-59



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)












Extension of the municipal property tax










Ordinance of the Region of Lazio of February 10, 2006:
Suspension of work on maritime infrastructure for the
transformation of the Torrevaldaliga Nord power plant to coal




F-60



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)










|     |                   
|---- | ------------------
|(19) | STOCK OPTION PLANS



















F-61



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)










|                                                    |  |           |            |          |           |  |       |           |          |  |            |     |  |           |       |  |       |  |            |           |  |  |       |          |  |           |            |     |       |  |       |       |  |  |            |     |  |  |       |  |  |  |             | 
|--------------------------------------------------- |  | --------- | ---------- | -------- | --------- |  | ----- | --------- | -------- |  | ---------- | --- |  | --------- | ----- |  | ----- |  | ---------- | --------- |  |  | ----- | -------- |  | --------- | ---------- | --- | ----- |  | ----- | ----- |  |  | ---------- | --- |  |  | ----- |  |  |  | ----------- | 
|                                                    |  | 2001 Plan |            |          | 2002 Plan |  |       | 2003 Plan |          |  | 2004 Plan  |     |  | 2005 Plan |       |  |      
|                                                    |  |           |            |          |           |  |       |           |          |  |            |     |  |           |       |  |      
|                                                    |  |           |            | Weighted |           |  |       |           | Weighted |  |            |     |  | Weighted  |       |  |       |  | Weighted   |           |  |  |       | Weighted |  |           |           
|                                                    |  |           |            | Average  |           |  |       |           | Average  |  |            |     |  | Average   |       |  |       |  | Average    |           |  |  |       | Average  |  |           |           
|                                                    |  | Number of |            |          | Share     |  |       | Number of |          |  | Share      |     |  | Number of |       |  | Share |  |            | Number of |  |  | Share |          |  | Number of |            |     | Share |  |       |      
|                                                    |  | Options   |            |          | Price     |  |       | Options   |          |  | Price      |     |  | Options   |       |  | Price |  |            | Options   |  |  | Price |          |  | Options   |            |     | Price |  |       | Total | 
|                                                    |  |           |            |          |           |  |       |           |          |  |            |     |  |           |       |  |       |  |            |           |  |  |       |          |  |           |            |     |       |  |       |       | 
|Options granted                                     |  |           | 19,193,468 | (1)      |           |  | 5.464 |           |          |  | 41,748,500 | (3) |  |           | 5.464 |  |       |  | 47,624,005 |           |  |  | 5.464 |          |  |           | 38,527,550 | (4) |       |  | 6.428 |       |  |  |           |     |  |  |      |  |  |  | 147,093,522 | 
|Options exercised at                                |  |           |            |          |           |  |       |           |          |  |            |     |  |           |       |  |       |  |            |           |  |  |       |          |  |           |            |     |       |  |       |       |  |  |            |     |  |  |       |  |  |  |             | 
|December 31, 2004                                   |  |           |           |          |           |  |      |           |          |  | 24,104,556 |     |  |           | 6.826 |  |       |  | 16,342,119 |           |  |  | 6.690 |          |  |           |           |     |       |  |      |       |  |  |           |     |  |  |      |  |  |  | 40,446,675  | 
|Options canceled/forfeited at December 31, 2004     |  |           | 2,503,326  |          |           |  | 6.777 |           |          |  | 4,824,000  |     |  |           | 6.632 |  |       |  | 3,237,700  |           |  |  | 6.453 |          |  |           | 1,231,000  |     |       |  | 6.664 |       |  |  |           |     |  |  |      |  |  |  | 11,796,026  | 
|Options outstanding at January 1, 2005              |  |           | 16,690,142 |          |           |  | 7.240 |           |          |  | 12,819,944 |     |  |           | 7.240 |  |       |  | 28,044,186 |           |  |  | 7.240 |          |  |           | 37,296,550 |     |       |  | 7.240 |       |  |  |           |     |  |  |      |  |  |  | 94,850,822  | 
|New options granted in 2005                         |  |           |           |          |           |  |      |           |          |  |           |     |  |           |       |  |       |  |           |           |  |  |       |          |  |           |           |     |       |  |       |       |  |  | 28,757,000 | (5) |  |  | 7.425 |  |  |  | 28,757,000  | 
|Options exercised in 2005                           |  |           | 16,301,333 |          |           |  | 7.432 |           |          |  | 10,697,094 |     |  |           | 7.494 |  |       |  | 14,158,373 |           |  |  | 7.449 |          |  |           | 12,392,982 |     |       |  | 7.114 |       |  |  |           |     |  |  |      |  |  |  | 53,549,782  | 
|Options canceled/forfeited in 2005                  |  |           | 388,809    |          |           |  | 7.322 |           |          |  | 48,500     |     |  |           | 7.229 |  |       |  | 50,726     |           |  |  | 7.229 |          |  |           | 394,500    |     |       |  | 7.084 |       |  |  |           |     |  |  |      |  |  |  | 882,535     | 
|Options outstanding at December 31, 2005            |  |           |           |          |           |  | 6.632 |           |          |  | 2,074,350  |     |  |           | 6.632 |  |       |  | 13,835,087 |           |  |  | 6.632 |          |  |           | 24,509,068 |     |       |  | 6.632 |       |  |  | 28,757,000 | (2) |  |  | 6.632 |  |  |  | 69,175,505  | 
| of which exercisable at December 31, 2005         |  |           |           |          |           |  | 6.632 |           |          |  | 2,074,350  |     |  |           | 6.632 |  |       |  | 2,203,002  |           |  |  | 6.632 |          |  |           | 4,718,900  |     |       |  | 6.632 |       |  |  | 28,757,000 | (2) |  |  | 6.632 |  |  |  | 37,753,252  | 
|Fair value at grant date (euro)                     |  |           | 0.48       |          |           |  |       |           |          |  | 0.17       |     |  |           |       |  |       |  | 0.37       |           |  |  |       |          |  |           | 0.18       |     |       |  |       |       |  |  | 0.27       |     |  |  |       |  |  |  |             | 
|Volatility                                          |  |           | 27         | %        |           |  |       |           |          |  | 28         | %   |  |           |       |  |       |  | 28         | %         |  |  |       |          |  |           | 17         | %   |       |  |       |       |  |  | 15         | %   |  |  |       |  |  |  |             | 
|Vesting period                                      |  |           | 2.5 years  |          |           |  |       |           |          |  | 2 years    |     |  |           |       |  |       |  | 2 years    |           |  |  |       |          |  |           | 3.5 years  |     |       |  |       |       |  |  | 3.5 years  |     |  |  |       |  |  |  |             | 
|Option expiry                                       |  |           | June 05    |          |           |  |       |           |          |  | Dec. 07    |     |  |           |       |  |       |  | Dec. 08    |           |  |  |       |          |  |           | Dec. 09    |     |       |  |       |       |  |  | Dec. 10    |     |  |  |       |  |  |  |             | 
|Average expected annual dividends                   |  |           | 0.36       |          |           |  |       |           |          |  | 0.28       |     |  |           |       |  |       |  | 0.28       |           |  |  |       |          |  |           | 0.36       |     |       |  |       |       |  |  | 0.42       |     |  |  |       |  |  |  |             | 
|Risk-free interest rate                             |  |           | 4.05       | %        |           |  |       |           |          |  | 2.82       | %   |  |           |       |  |       |  | 2.82       | %         |  |  |       |          |  |           | 2.72       | %   |       |  |       |       |  |  | 3.30       | %   |  |  |       |  |  |  |             | 
|Vesting period (regards last tranche for each plan) |  |           | 2001-2004  |          |           |  |       |           |          |  | 2002-2005  |     |  |           |       |  |       |  | 2003-2006  |           |  |  |       |          |  |           | 2004-2008  |     |       |  |       |       |  |  | 2005-2009  |     |  |  |       |  |  |  |             | 






|    |                                                                                     
|--- | ------------------------------------------------------------------------------------
|(1) | Portion actually exercisable (56%) of total options granted
    (34,274,050).       
|   
|(2) | Declared lapsed by the Enel Board of Directors at the meeting on
    March 22, 2006.
|   
|(3) | 2,503,500 granted to Enels Chief Executive Officer at
    euro 6.480.              
|   
|(4) | 2,500,000 granted to Enels Chief Executive Officer at
    euro 6.242.              
|   
|(5) | 600,000 granted to Enels Chief Executive Officer at
    euro 7.273.                

F-62



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)










|     |                                                                        
|---- | -----------------------------------------------------------------------
|(20) | TRANSITION TO INTERNATIONAL FINANCIAL REPORTING STANDARDS
    (IFRS-EU)









Adoption of IFRS 1








| |   |                                                                                                                                                                                                                                                                                                                                                                                              
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | business combinations: the Company has not applied IFRS 3
    retrospectively to business combinations that took place before
    the transition date;                                                                                                                                                                                                                                       
|
| |  | measurement of property, plant and equipment and of intangible
    assets at fair value or deemed cost: the Company has applied the
    revalued amount method to certain asset categories;                                                                                                                                                                                                  
|
| |  | employee benefits: the Company has decided to recognize all
    cumulative actuarial gains and losses existing at
    January 1, 2004, while it has opted for the corridor
    approach for all subsequent actuarial gains and losses;                                                                                                                                                       
|
| |  | translation reserve for balance sheets of consolidated entities
    from countries outside the euro area: as permitted by
    IFRS 1, the Company has not availed itself of the exemption
    and has maintained the net cumulative exchange rate differences
    arising from prior translations of financial statements of
    foreign entities as determined prior to the transition date;
|
| |  | share-based payment: the Company has not applied the exemption
    allowed by IFRS 1 for share-based payments and has applied IFRS
    2 to all the plans existing at January 1, 2004;                                                                                                                                                                                                       

F-63



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |   |                                                                                                                                                                                                                                                                     
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | classification and measurement of financial instruments: the
    Company has not postponed the transition date for IAS 32 and IAS
    39 to January 1, 2005, and has taken the related effects
    into account in the opening balance sheet at January 1,
    2004;
|
| |  | designation of financial instruments at fair value through
    profit and loss or as available for sale: the Company has
    decided to adopt this method at the transition date
    (January 1, 2004) rather than at the initial recognition
    date for IAS 39.  





| |   |                                                                             
| | - | ----------------------------------------------------------------------------
| |  | figures calculated under Italian GAAP reclassified for IFRS-EU
    purposes;
|
| |  | adjustments for alignment with IFRS-EU.                                     

Balance sheet at January 1, 2004


|                                                  |  |                    |        |  |             |  |        |             |  |  |        |  |  |  |           | 
|------------------------------------------------- |  | ------------------ | ------ |  | ----------- |  | ------ | ----------- |  |  | ------ |  |  |  | --------- | 
|                                                  |  | Italian GAAP       |        |  |             |  |        |             | 
|                                                  |  | Reclassified       |        |  | IAS/IFRS-EU |  |        |             |  | 
|                                                  |  | for IAS            |        |  | Adjustments |  |        | IAS/IFRS-EU |  |  | Notes  | 
|                                                  |  |                    |        |  |             |  |        |             |  |  |        | 
|                                                  |  | (millions of euro) |       
|ASSETS                                           
|Non-current assets                                |  |                    |        |  |             |  |        |             |  |  |        |  |  |  |           | 
|Property, plant and equipment                     |  |                    | 37,265 |  |             |  | 385    |             |  |  | 37,650 |  |  |  | 20.1      | 
|Intangible assets                                 |  |                    | 13,422 |  |             |  | (1,578 | )           |  |  | 11,844 |  |  |  | 20.2-20.3 | 
|Deferred tax assets                               |  |                    | 2,038  |  |             |  | 479    |             |  |  | 2,517  |  |  |  | 20.4      | 
|Investments accounted for using the equity method |  |                    | 255    |  |             |  |       |             |  |  | 255    |  |  |  |           | 
|Non-current financial assets                      |  |                    | 1,630  |  |             |  | (5     | )           |  |  | 1,625  |  |  |  | 20.5      | 
|Other non-current assets                          |  |                    | 172    |  |             |  |       |             |  |  | 172    |  |  |  |           | 
|Total non-current assets                          |  |                    | 54,782 |  |             |  | (719   | )           |  |  | 54,063 |  |  |  |           | 
|Current assets                                    |  |                    |        |  |             |  |        |             |  |  |        |  |  |  |           | 
|Inventories                                       |  |                    | 1,321  |  |             |  | 12     |             |  |  | 1,333  |  |  |  |           | 
|Trade receivables                                 |  |                    | 7,321  |  |             |  | (52    | )           |  |  | 7,269  |  |  |  | 20.6-20.7 | 
|Current financial assets                          |  |                    | 627    |  |             |  |       |             |  |  | 627    |  |  |  |           | 
|Cash and cash equivalents                         |  |                    | 424    |  |             |  |       |             |  |  | 424    |  |  |  |           | 
|Other current assets                              |  |                    | 1,986  |  |             |  | (55    | )           |  |  | 1,931  |  |  |  | 20.8      | 
|Total current assets                              |  |                    | 11,679 |  |             |  | (95    | )           |  |  | 11,584 |  |  |  |           | 
|                                                  |  |                    |        |  |             |  |        |             |  |  |        | 
|TOTAL ASSETS                                      |  |                    | 66,461 |  |             |  | (814   | )           |  |  | 65,647 |  |  |  |           | 

F-64



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Balance sheet at January 1, 2004


|                                                    |  |                    |        |  |             |  |        |             |  |  |        |  |  |  |       | 
|--------------------------------------------------- |  | ------------------ | ------ |  | ----------- |  | ------ | ----------- |  |  | ------ |  |  |  | ----- | 
|                                                    |  | Italian GAAP       |        |  |             |  |        |             | 
|                                                    |  | Reclassified       |        |  | IAS/IFRS-EU |  |        |             |  | 
|                                                    |  | for IAS            |        |  | Adjustments |  |        | IAS/IFRS-EU |  |  | Notes  | 
|                                                    |  |                    |        |  |             |  |        |             |  |  |        | 
|                                                    |  | (millions of euro) |       
|LIABILITIES                                        
|Shareholders equity                                |  |                    |        |  |             |  |        |             |  |  |        |  |  |  |       | 
|Share capital                                       |  |                    | 6,063  |  |             |  |       |             |  |  | 6,063  |  |  |  |       | 
|Other reserves                                      |  |                    | 3,669  |  |             |  | (1,685 | )           |  |  | 1,984  |  |  |  |       | 
|Retained earnings                                   |  |                    | 11,393 |  |             |  |       |             |  |  | 11,393 |  |  |  |       | 
|Group shareholders equity                          |  |                    | 21,125 |  |             |  | (1,685 | )           |  |  | 19,440 |  |  |  |       | 
|Minority interests                                  |  |                    | 190    |  |             |  | (9     | )           |  |  | 181    |  |  |  |       | 
|TOTAL SHAREHOLDERS EQUITY                          |  |                    | 21,315 |  |             |  | (1,694 | )           |  |  | 19,621 |  |  |  |       | 
|Non-current liabilities                             |  |                    |        |  |             |  |        |             |  |  |        |  |  |  |       | 
|Long-term loans                                     |  |                    | 18,597 |  |             |  | (35    | )           |  |  | 18,562 |  |  |  | 20.9  | 
|Termination indemnities and other employee benefits |  |                    | 1,767  |  |             |  | 1,257  |             |  |  | 3,024  |  |  |  | 20.10 | 
|Provisions for risks and charges                    |  |                    | 1,417  |  |             |  | (190   | )           |  |  | 1,227  |  |  |  | 20.11 | 
|Deferred tax liabilities                            |  |                    | 2,515  |  |             |  | (461   | )           |  |  | 2,054  |  |  |  | 20.12 | 
|Other non-current liabilities                       |  |                    | 329    |  |             |  |       |             |  |  | 329    |  |  |  |       | 
|Total non-current liabilities                       |  |                    | 24,625 |  |             |  | 571    |             |  |  | 25,196 |  |  |  |       | 
|Current liabilities                                 |  |                    |        |  |             |  |        |             |  |  |        |  |  |  |       | 
|Short-term loans                                    |  |                    | 4,145  |  |             |  |       |             |  |  | 4,145  |  |  |  |       | 
|Current portion of long-term loans                  |  |                    | 3,986  |  |             |  |       |             |  |  | 3,986  |  |  |  |       | 
|Trade payables                                      |  |                    | 6,061  |  |             |  | (37    | )           |  |  | 6,024  |  |  |  | 20.13 | 
|Income tax payable                                  |  |                    | 714    |  |             |  |       |             |  |  | 714    |  |  |  |       | 
|Current financial liabilities                       |  |                    | 373    |  |             |  | 391    |             |  |  | 764    |  |  |  | 20.14 | 
|Other current liabilities                           |  |                    | 5,242  |  |             |  | (45    | )           |  |  | 5,197  |  |  |  | 20.15 | 
|Total current liabilities                           |  |                    | 20,521 |  |             |  | 309    |             |  |  | 20,830 |  |  |  |       | 
|TOTAL LIABILITIES                                   |  |                    | 45,146 |  |             |  | 880    |             |  |  | 46,026 |  |  |  |       | 
|                                                    |  |                    |        |  |             |  |        |             |  |  |        | 
|TOTAL LIABILITIES AND SHAREHOLDERS EQUITY          |  |                    | 66,461 |  |             |  | (814   | )           |  |  | 65,647 |  |  |  |       | 

F-65



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Balance sheet at December 31, 2004


|                                                  |  |                    |        |  |             |  |        |             |  |  |        |  |  |  |           | 
|------------------------------------------------- |  | ------------------ | ------ |  | ----------- |  | ------ | ----------- |  |  | ------ |  |  |  | --------- | 
|                                                  |  | Italian GAAP       |        |  |             |  |        |             | 
|                                                  |  | Reclassified       |        |  | IAS/IFRS-EU |  |        |             |  | 
|                                                  |  | for IAS            |        |  | Adjustments |  |        | IAS/IFRS-EU |  |  | Notes  | 
|                                                  |  |                    |        |  |             |  |        |             |  |  |        | 
|                                                  |  | (millions of euro) |       
|ASSETS                                           
|Non-current assets                                |  |                    |        |  |             |  |        |             |  |  |        |  |  |  |           | 
|Property, plant and equipment                     |  |                    | 36,546 |  |             |  | 156    |             |  |  | 36,702 |  |  |  | 20.1      | 
|Intangible assets                                 |  |                    | 11,430 |  |             |  | (1,359 | )           |  |  | 10,071 |  |  |  | 20.2-20.3 | 
|Deferred tax assets                               |  |                    | 2,339  |  |             |  | 614    |             |  |  | 2,953  |  |  |  | 20.4      | 
|Investments accounted for using the equity method |  |                    | 190    |  |             |  |       |             |  |  | 190    |  |  |  |           | 
|Non-current financial assets                      |  |                    | 1,731  |  |             |  | 45     |             |  |  | 1,776  |  |  |  | 20.5      | 
|Other non-current assets                          |  |                    | 154    |  |             |  |       |             |  |  | 154    |  |  |  |           | 
|Total non-current assets                          |  |                    | 52,390 |  |             |  | (544   | )           |  |  | 51,846 |  |  |  |           | 
|Current assets                                    |  |                    |        |  |             |  |        |             |  |  |        |  |  |  |           | 
|Inventories                                       |  |                    | 1,345  |  |             |  |       |             |  |  | 1,345  |  |  |  |           | 
|Trade receivables                                 |  |                    | 8,090  |  |             |  | (63    | )           |  |  | 8,027  |  |  |  | 20.6-20.7 | 
|Current financial assets                          |  |                    | 553    |  |             |  | (44    | )           |  |  | 509    |  |  |  |           | 
|Cash and cash equivalents                         |  |                    | 331    |  |             |  |       |             |  |  | 331    |  |  |  |           | 
|Other current assets                              |  |                    | 3,367  |  |             |  | (47    | )           |  |  | 3,320  |  |  |  | 20.8      | 
|Total current assets                              |  |                    | 13,686 |  |             |  | (154   | )           |  |  | 13,532 |  |  |  |           | 
|                                                  |  |                    |        |  |             |  |        |             |  |  |        | 
|TOTAL ASSETS                                      |  |                    | 66,076 |  |             |  | (698   | )           |  |  | 65,378 |  |  |  |           | 

F-66



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Balance sheet at December 31, 2004


|                                                    |  |                    |        |  |             |  |        |             |  |  |        |  |  |  |       | 
|--------------------------------------------------- |  | ------------------ | ------ |  | ----------- |  | ------ | ----------- |  |  | ------ |  |  |  | ----- | 
|                                                    |  | Italian GAAP       |        |  |             |  |        |             | 
|                                                    |  | Reclassified       |        |  | IAS/IFRS-EU |  |        |             |  | 
|                                                    |  | for IAS            |        |  | Adjustments |  |        | IAS/IFRS-EU |  |  | Notes  | 
|                                                    |  |                    |        |  |             |  |        |             |  |  |        | 
|                                                    |  | (millions of euro) |       
|LIABILITIES                                        
|Shareholders equity                                |  |                    |        |  |             |  |        |             |  |  |        |  |  |  |       | 
|Share capital                                       |  |                    | 6,104  |  |             |  |       |             |  |  | 6,104  |  |  |  |       | 
|Other reserves                                      |  |                    | 3,868  |  |             |  | (1,816 | )           |  |  | 2,052  |  |  |  |       | 
|Retained earnings                                   |  |                    | 9,183  |  |             |  | (3     | )           |  |  | 9,180  |  |  |  |       | 
|Net income for the period                           |  |                    | 692    |  |             |  | (75    | )           |  |  | 617    |  |  |  |       | 
|Group shareholders equity                          |  |                    | 19,847 |  |             |  | (1,894 | )           |  |  | 17,953 |  |  |  |       | 
|Minority interests                                  |  |                    | 1,131  |  |             |  | (18    | )           |  |  | 1,113  |  |  |  |       | 
|TOTAL SHAREHOLDERS EQUITY                          |  |                    | 20,978 |  |             |  | (1,912 | )           |  |  | 19,066 |  |  |  | 20.24 | 
|Non-current liabilities                             |  |                    |        |  |             |  |        |             |  |  |        |  |  |  |       | 
|Long-term loans                                     |  |                    | 20,334 |  |             |  | (43    | )           |  |  | 20,291 |  |  |  | 20.9  | 
|Termination indemnities and other employee benefits |  |                    | 1,574  |  |             |  | 1,336  |             |  |  | 2,910  |  |  |  | 20.10 | 
|Provisions for risks and charges                    |  |                    | 1,494  |  |             |  | (90    | )           |  |  | 1,404  |  |  |  | 20.11 | 
|Deferred tax liabilities                            |  |                    | 2,906  |  |             |  | (394   | )           |  |  | 2,512  |  |  |  | 20.12 | 
|Non-current financial liabilities                   |  |                    | 4      |  |             |  | 366    |             |  |  | 370    |  |  |  | 20.14 | 
|Other non-current liabilities                       |  |                    | 218    |  |             |  |       |             |  |  | 218    |  |  |  |       | 
|Total non-current liabilities                       |  |                    | 26,530 |  |             |  | 1,175  |             |  |  | 27,705 |  |  |  |       | 
|Current liabilities                                 |  |                    |        |  |             |  |        |             |  |  |        |  |  |  |       | 
|Short-term loans                                    |  |                    | 5,192  |  |             |  |       |             |  |  | 5,192  |  |  |  |       | 
|Current portion of long-term loans                  |  |                    | 1,397  |  |             |  |       |             |  |  | 1,397  |  |  |  |       | 
|Trade payables                                      |  |                    | 6,706  |  |             |  | (37    | )           |  |  | 6,669  |  |  |  | 20.13 | 
|Payables for contract work in progress              |  |                    | 149    |  |             |  |       |             |  |  | 149    |  |  |  |       | 
|Income tax payable                                  |  |                    | 99     |  |             |  |       |             |  |  | 99     |  |  |  |       | 
|Current financial liabilities                       |  |                    | 379    |  |             |  | 114    |             |  |  | 493    |  |  |  | 20.14 | 
|Other current liabilities                           |  |                    | 4,646  |  |             |  | (38    | )           |  |  | 4,608  |  |  |  | 20.15 | 
|Total current liabilities                           |  |                    | 18,568 |  |             |  | 39     |             |  |  | 18,607 |  |  |  |       | 
|TOTAL LIABILITIES                                   |  |                    | 45,098 |  |             |  | 1,214  |             |  |  | 46,312 |  |  |  |       | 
|                                                    |  |                    |        |  |             |  |        |             |  |  |        | 
|TOTAL LIABILITIES AND SHAREHOLDERS EQUITY          |  |                    | 66,076 |  |             |  | (698   | )           |  |  | 65,378 |  |  |  |       | 

F-67



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Income statement at December 31, 2004


|                                                 |  |                    |        |   |             |  |      |             |  |  |        |   |  |  |       | 
|------------------------------------------------ |  | ------------------ | ------ | - | ----------- |  | ---- | ----------- |  |  | ------ | - |  |  | ----- | 
|                                                 |  | Italian GAAP       |        |   |             |  |      |             | 
|                                                 |  | Reclassified       |        |   | IAS/IFRS-EU |  |      |             |  | 
|                                                 |  | for IAS            |        |   | Adjustments |  |      | IAS/IFRS-EU |  |  | Notes  |  
|                                                 |  |                    |        |   |             |  |      |             |  |  |        |  
|                                                 |  | (millions of euro) |       
|Ordinary revenues                                |  |                    | 36,489 |   |             |  |     |             |  |  | 36,489 |   |  |  |       | 
|Non-recurring revenues                           |  |                    | 999    |   |             |  | (135 | )           |  |  | 864    |   |  |  |       | 
|TOTAL REVENUES                                   |  |                    | 37,488 |   |             |  | (135 | )           |  |  | 37,353 |   |  |  | 20.16 | 
|Personnel                                        |  |                    | 3,790  |   |             |  | 3    |             |  |  | 3,793  |   |  |  | 20.17 | 
|Fuel for thermal generation                      |  |                    | 3,598  |   |             |  |     |             |  |  | 3,598  |   |  |  |       | 
|Purchased power                                  |  |                    | 10,465 |   |             |  |     |             |  |  | 10,465 |   |  |  |       | 
|Interconnection and roaming                      |  |                    | 1,346  |   |             |  |     |             |  |  | 1,346  |   |  |  |       | 
|Services, leases and rentals                     |  |                    | 4,003  |   |             |  | 19   |             |  |  | 4,022  |   |  |  | 20.18 | 
|Fuel for trading and gas for resale to end-uers  |  |                    | 1,795  |   |             |  |     |             |  |  | 1,795  |   |  |  |       | 
|Materials                                        |  |                    | 1,255  |   |             |  |     |             |  |  | 1,255  |   |  |  |       | 
|Other                                            |  |                    | 1,148  |   |             |  | (4   | )           |  |  | 1,144  |   |  |  |       | 
|Capitalized costs                                |  |                    | (1,032 | ) |             |  |     |             |  |  | (1,032 | ) |  |  |       | 
|Amortization, depreciation and impairment losses |  |                    | 5,536  |   |             |  | (133 | )           |  |  | 5,403  |   |  |  | 20.19 | 
|Provisions                                       |  |                    | 20     |   |             |  | (20  | )           |  |  |       |   |  |  | 20.20 | 
|OPERATING INCOME                                 |  |                    | 5,564  |   |             |  |     |             |  |  | 5,564  |   |  |  |       | 
|Net financial income (expense)                   |  |                    | (1,149 | ) |             |  | (170 | )           |  |  | (1,319 | ) |  |  | 20.21 | 
|INCOME BEFORE EXTRAORDINARY ITEMS AND INCOME TAX |  |                    | 4,415  |   |             |  | (170 | )           |  |  | 4,245  |   |  |  |       | 
|Extraordinary items                              |  |                    | (66    | ) |             |  | 66   |             |  |  |       |   |  |  | 20.22 | 
|INCOME BEFORE TAXES                              |  |                    | 4,349  |   |             |  | (104 | )           |  |  | 4,245  |   |  |  |       | 
|Income taxes                                     |  |                    | 1,517  |   |             |  | (19  | )           |  |  | 1,498  |   |  |  | 20.23 | 
|INCOME BEFORE MINORITY INTERESTS                 |  |                    | 2,832  |   |             |  | (85  | )           |  |  | 2,747  |   |  |  |       | 
|Minority interests                               |  |                    | (126   | ) |             |  | 10   |             |  |  | (116   | ) |  |  |       | 
|                                                 |  |                    |        |   |             |  |      |             |  |  |        |  
|NET INCOME                                       |  |                    | 2,706  |   |             |  | (75  | )           |  |  | 2,631  |   |  |  |       | 

Notes on the main IFRS-EU adjustments made to certain items
in the balance sheet at January 1, 2004 and
December 31, 2004




Balance sheet  Assets


(20.1) Property, plant and equipment




| |   |                                                                                                                                                                                                                                                                                                                                             
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | elimination of the accumulated depreciation of land included in
    the plant book value, which under IFRS-EU has to be separated
    from the plant and can no longer be depreciated (+euro
    70 million at January 1, 2004 and +euro
    72 million at December 31, 2004  see
    note 20.24.a Reconciliation of shareholders equity);

F-68



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | reversal of impairment losses on property, plant and equipment
    due to reflect prospectively the review of remaining useful
    lives of the relevant assets (+euro 153 million at
    January 1, 2004 and +euro 56 million at
    December 31, 2004  see note 20.24
    (a) in Reconciliation of shareholders equity). An
    asset retirement plan is treated as a change to the assets
    useful life under IFRS-EU which results in a prospective change
    to the amounts depreciated. Under Italian GAAP when an
    assets useful life is reassessed and determined to be
    shorter than originally estimated, an impairment loss is
    recorded. Consequently, the impairment losses recognized under
    Italian GAAP were eliminated and the new useful life has been
    used to depreciate the assets. This had a positive effect on
    shareholders equity at January 1, 2004, and
    December 31, 2004, of approximately
    euro 153 million and euro 56 million,
    respectively;
|
| |  | capitalization of dismantling and restoration charges (+euro
    27 million at January 1, 2004 and +euro
    24 million at December 31, 2004, see
    note 20.24.(a) in Reconciliation of shareholders
    equity) and simultaneous accrual to a provision for charges for
    the estimated present value of future costs on the liabilities
    side of the balance sheet (see note 20.11);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| |  | reversal of a provision for plant demolition that did not comply
    with the recognition criteria of IFRS-EU (+euro 15 million
    at January 1, 2004 and +euro 35 million at
    December 31, 2004);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| |  | reversal, separation and recalculation of the depreciation for
    significant plant components as a consequence of component
    analysis approach (-euro 21 million at January 1, 2004
    and -euro 32 million at December 31, 2004; see
    note 20.24.(a) in Reconciliation of shareholders
    equity);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| |  | deferral of connection fees for the gas sector over the same
    period of depreciation of related investments (-euro
    38 million at January 1, 2004 and -euro
    59 million at December 31, 2004);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|
| |  | recognition of the fair value of the real estate assets under
    IFRS-EU (+euro 179 million at January 1, 2004 and
    +euro 61 million at December 31, 2004).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

(20.2) Intangible assets


|                                                                                                     |  |                    |        |   |               |  |        |  
|---------------------------------------------------------------------------------------------------- |  | ------------------ | ------ | - | ------------- |  | ------ | -
|                                                                                                     |  | Jan. 1, 2004       |        |   | Dec. 31, 2004 | 
|                                                                                                     |  |                    |        |   |               | 
|                                                                                                     |  | (millions of euro) |       
|Start-up costs                                                                                       |  |                    | (26    | ) |               |  | (21    | )
|Research, development and advertising                                                                |  |                    | (31    | ) |               |  | (1     | )
|Deferred charges                                                                                     |  |                    | (22    | ) |               |  | (14    | )
|Effect of discounting of other similar rights                                                      |  |                    | (76    | ) |               |  | (83    | )
|Extraordinary contribution for the suppression of the
    Electricity Industry Employee Pension Fund |  |                    | (1,423 | ) |               |  | (1,334 | )
|Goodwill                                                                                             |  |                    |       |   |               |  | 94     |  
|                                                                                                     |  |                    |        |   |               | 
|TOTAL INTANGIBLE ASSETS                                                                              |  |                    | (1,578 | ) |               |  | (1,359 | )

start-up,






F-69



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




(20.3) Goodwill


(20.4) Deferred tax assets


(20.5) Non-current financial assets


(20.6) Trade receivables cost-of


(20.7) Receivables for contract work in progress


(20.8) Other current assets


Balance sheet  Liabilities


(20.9) Long-term loans




| |   |                                                                                                                                                                                                                                                                                                                              
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the adjustment of foreign currency medium- to long-term payables
    using the period-end exchange rate, equal to -euro
    33 million at January 1, 2004 and -euro
    28 million at December 31, 2004, from the method used
    under Italian GAAP, where these payables were recognized using
    the hedge exchange rate;
|
| |  | adoption of the amortized cost method to measure medium- to
    long-term bank loans and bond issues equal to -euro
    2 million at January 1, 2004 and -euro 15 million
    at December 31, 2004.                                                                                                                          

(20.10) Post-employment and other employee benefits


|                      |  |                    |       |   |               |  |       |  
|--------------------- |  | ------------------ | ----- | - | ------------- |  | ----- | -
|                      |  | Jan. 1, 2004       |       |   | Dec. 31, 2004 | 
|                      |  |                    |       |   |               | 
|                      |  | (millions of euro) |      
|Termination benefit   |  |                    | (60   | ) |               |  | (80   | )
|Electricity discounts |  |                    | 952   |   |               |  | 1,014 |  
|Other benefits        |  |                    | 365   |   |               |  | 402   |  
|                      |  |                    |       |   |               | 
|Total                 |  |                    | 1,257 |   |               |  | 1,336 |  



F-70



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(20.11) Provisions for risks and charges


|                                                  |  |                    |      |   |               |  |      |  
|------------------------------------------------- |  | ------------------ | ---- | - | ------------- |  | ---- | -
|                                                  |  | Jan. 1, 2004       |      |   | Dec. 31, 2004 | 
|                                                  |  |                    |      |   |               | 
|                                                  |  | (millions of euro) |     
|Provision for dismantling and restoration charges |  |                    | 40   |   |               |  | 43   |  
|Provision for demolition of plant                 |  |                    | (103 | ) |               |  | (103 | )
|Provision for company restructuring               |  |                    | (76  | ) |               |  | (30  | )
|Other provisions                                  |  |                    | (51  | ) |               |  |     |  
|                                                  |  |                    |      |   |               | 
|Total                                             |  |                    | (190 | ) |               |  | (90  | )



(20.12) Deferred tax liabilities


(20.13) Trade payables


(20.14) Current and non-current financial liabilities


(20.15) Other current liabilities


Adjustments to 2004 consolidated income statement items


(20.16) Revenues






| |   |                                                                                                                                           
| | - | ------------------------------------------------------------------------------------------------------------------------------------------
| |  | elimination of a euro 114 million capital gain
    recognized under Italian GAAP on the sale of the real estate
    business;             
|
| |  | reversal of the release of euro 23 million of
    restructuring charges which did not meet the criteria for
    recognition under IFRS-EU.

(20.17) Personnel


(20.18) Services, leases and rentals


F-71



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(20.19) Amortization, depreciation and impairment losses


|                                  |  |                    |      |  
|--------------------------------- |  | ------------------ | ---- | -
|                                  |  | Dec. 31, 2004      |     
|                                  |  |                    |     
|                                  |  | (millions of euro) |     
|Amortization of goodwill          |  |                    | (657 | )
|Amortization of intangible assets |  |                    | (51  | )
|FPE contribution                  |  |                    | (88  | )
|Component analysis                |  |                    | 11   |  
|Impairment of plants              |  |                    | 97   |  
|Impairment of goodwill            |  |                    | 555  |  
|                                  |  |                    |     
|Total                             |  |                    | (133 | )





| |   |                                                                                                                                                                                                                                                                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | a euro 796 million decrease due to the elimination of
    amortization of goodwill, which is no longer allowed under
    IFRS-EU, amortization of certain intangible assets which did not
    meet the criteria for recognition under IFRS-EU and the
    elimination of extraordinary contribution (FPE) charge
    recognized under Italian GAAP;
|
| |  | a euro 663 million increase due to the separation and
    recalculation of significant plant components (component
    analysis), greater depreciation charges following the
    reversal of impairment of plant parts and review of remaining
    useful life and impairment of goodwill related to the
    telecommunication companies.        

(20.20) Provisions


(20.21) Financial expense, net




| |   |                                                                                                                                              
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------
| |  | interest cost of employee benefit obligations (+euro
    144 million);                                                                       
|
| |  | the recognition of the fair value of ineffective portion of
    derivative financial instruments (+euro 29 million)
    designated as hedges.

(20.22) Extraordinary items


(20.23) Income tax


F-72



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(20.24) Reconciliation of shareholders equity




STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY


|                                                                                                          |  |       |   |               |                 |  |               |                   |  |                    |        |   |  |  |       |  
|--------------------------------------------------------------------------------------------------------- |  | ----- | - | ------------- | --------------- |  | ------------- | ----------------- |  | ------------------ | ------ | - |  |  | ----- | -
|                                                                                                          |  |       |   |               |                 |  |               | Income Before     | 
|                                                                                                          |  |       |   | Total         |                 |  | Total         |                   |  | Minority Interests |       
|                                                                                                          |  |       |   | Shareholders |                 |  | Shareholders |                   |  | for Year Ending    |       
|                                                                                                          |  |       |   | Equity at     |                 |  | Equity at     |                   |  | December 31,       |       
|                                                                                                          |  | Notes |   |               | January 1, 2004 |  |               | December 31, 2004 |  |                    | 2004   |  
|                                                                                                          |  |       |   |               |                 |  |               |                   |  |                    |        |  
|ITALIAN GAAP                                                                                              |  |       |   |               |                 |  | 21,315        |                   |  |                    | 20,978 |   |  |  | 2,832 |  
|Adjustments:                                                                                              |  |       |   |               |                 |  |               |                   |  |                    |        |   |  |  |       |  
|  Property, plant and equipment And related
    depreciation                                             |  |       | a |               |                 |  | 330           |                   |  |                    | 79     |   |  |  | (246  | )
|  Start-up, development and advertising costs
    And other intangible assets                            |  |       | b |               |                 |  | (1,501        | )                 |  |                    | (1,372 | ) |  |  | 138   |  
|  Goodwill                                                                                               |  |       | c |               |                 |  |              |                   |  |                    | 94     |   |  |  | 103   |  
|  Derivative financial instruments                                                                       |  |       | d |               |                 |  | (391          | )                 |  |                    | (480   | ) |  |  | (29   | )
|  Other employee costs (e.g. termination
    benefits, stock option plans, Asem healthcare scheme, etc.) |  |       | e |               |                 |  | (1,257        | )                 |  |                    | (1,336 | ) |  |  | (87   | )
|  Provisions for risks and charges
    (restructuring, demolition, breakdowns, etc.)                     |  |       | f |               |                 |  | 241           |                   |  |                    | 168    |   |  |  | (73   | )
|  Other adjustments                                                                                      |  |       | g |               |                 |  | (54           | )                 |  |                    | (71    | ) |  |  | 95    |  
|Tax impact of the adjustments                                                                             |  |       |   |               |                 |  | 938           |                   |  |                    | 1,006  |   |  |  | 14    |  
|Total adjustments net of tax effects                                                                      |  |       |   |               |                 |  | (1,694        | )                 |  |                    | (1,912 | ) |  |  | (85   | )
|                                                                                                          |  |       |   |               |                 |  |               |                   |  |                    |        |  
|IFRS-EU                                                                                                   |  |       |   |               |                 |  | 19,621        |                   |  |                    | 19,066 |   |  |  | 2,747 |  

a)  Property, plant and equipment and related
depreciation














F-73



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








b)  Start-up, development and advertising costs and
other intangible assets


start-up,








c)  Goodwill






d)  Transactions Involving Derivative Financial
Instruments








| |   |                                                                                                               
| | - | --------------------------------------------------------------------------------------------------------------
| |  | recognition of the fair value of the derivative asset or
    liability in the balance sheet at its fair value;
|
| |  | recognition of a cash flow hedge reserve in equity for the
    effective part of the hedge;                   
|
| |  | recognition of the ineffective part of the hedge in the income
    statement.                                 





| |   |                                                                                             
| | - | --------------------------------------------------------------------------------------------
| |  | recognition of the derivative asset or liability in the balance
    sheet at its fair value;
|
| |  | set-off of the change in fair value of the hedged risk against
    the hedged item.         

F-74



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




e)  Employee benefits












f)  Provisions for risks and charges










g)  Other adjustments






F-75



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|    |                                                                                     
|--- | ------------------------------------------------------------------------------------
|21. | RECONCILIATION OF NET INCOME AND SHAREHOLDERS EQUITY
    FROM IFRS-EU AND U.S. GAAP

Differences Between IFRS-EU and United States Generally
Accepted Accounting Principles






20-F




F-76



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


|                                              |                                                             |       |       |                     |      |              |                      |       |       |                    |              |       |               |      |       |       |       |  |        |        |        |  |        |        |        |  |        |        |        | 
|--------------------------------------------- | ----------------------------------------------------------- | ----- | ----- | ------------------- | ---- | ------------ | -------------------- | ----- | ----- | ------------------ | ------------ | ----- | ------------- | ---- | ----- | ----- | ----- |  | ------ | ------ | ------ |  | ------ | ------ | ------ |  | ------ | ------ | ------ | 
|                                              |                                                             |       |       | Net Income          |      |              | Shareholders Equity |      
|                                              |                                                             |       |       |                     |      |              |                      |      
|                                              |                                                             |       |       | For the Years Ended |      |              | For the Years Ended  |      
|                                              |                                                             |       |       | December 31,        |      |              | December 31,         |      
|                                              |                                                             |       |       |                     |      |              |                      |      
|                                              |                                                             | Note  |       |                     | 2005 |              |                      | 2004  |       |                    | 2005         |       |               | 2005 |       |       | 2004  |  |        | 2005   |       
|                                              |                                                             |       |       |                     |      |              |                      |       |       |                    |              |       |               |      |       |       |       |  |        |        |       
|                                              |                                                             |       |       |                     |      | (millions of |                      |       |       |                    | (millions of |      
|                                              |                                                             |       |       | (millions of euro)  |      |              | U.S. dollars)        |       |       | (millions of euro) |              |       | U.S. dollars) |     
|Financial statements:                         |                                                             |       |       |                     |      |              |                      |       |       |                    |              |       |               |      |       |       |       |  |        |        |        |  |        |        |        |  |        |       
|                                              | Of the parent company                                       |       |       |                     |      |              |                      | 3,895 |       |                    |              | 2,631 |               |      |       | 4,612 |       |  |        | 19,057 |        |  |        | 17,953 |        |  |        | 22,567 |       
|                                              | Of the minority interest                                    |       |       | 21.1                |      |              |                      | 237   |       |                    |              | 116   |               |      |       | 281   |       |  |        | 359    |        |  |        | 1,113  |        |  |        | 425    |       
|                                              |                                                             |       |       |                     |      |              |                      |       |       |                    |              |       |               |      |       |       |       |  |        |        |       
|                                              |                                                             | Total |       |                     |      |              |                      |       | 4,132 |                    |              |       | 2,747         |      |       |       | 4,893 |  |        |        | 19,416 |  |        |        | 19,066 |  |        |        | 22,992 | 
|Increases/ (Decreases) due to:                |                                                             |       |       |                     |      |              |                      |       |       |                    |              |       |               |      |       |       |       |  |        |        |        |  |        |        |        |  |        |       
|Minority Interest                             |                                                             |       | 21.1  |                     |      |              | (237                 | )     |       |                    | (116         | )     |               |      | (281  | )     |       |  | (359   | )      |        |  | (1,113 | )      |        |  | (425   | )     
|Customers connection fees                    |                                                             |       | 21.2  |                     |      |              | (419                 | )     |       |                    | (464         | )     |               |      | (496  | )     |       |  | (1,827 | )      |        |  | (1,408 | )      |        |  | (2,164 | )     
|Fixed Asset and Related Depreciation          |                                                             |       | 21.3  |                     |      |              | 183                  |       |       |                    | 1,057        |       |               |      | 217   |       |       |  | 645    |        |        |  | 462    |        |        |  | 764    |       
|Capitalized interest and related depreciation |                                                             |       | 21.4  |                     |      |              | (12                  | )     |       |                    | (33          | )     |               |      | (14   | )     |       |  | 1,236  |        |        |  | 1,248  |        |        |  | 1,464  |       
|Assets retirement obligations                 |                                                             |       | 21.10 |                     |      |              | 1                    |       |       |                    | (6           | )     |               |      | 1     |       |       |  | 10     |        |        |  | 9      |        |        |  | 12     |       
|Negative goodwill                             |                                                             |       | 21.8  |                     |      |              | (24                  | )     |       |                    |             |       |               |      | (28   | )     |       |  | (24    | )      |        |  |       |        |        |  | (28    | )     
|Pension and employee termination accounting   |                                                             |       | 21.6  |                     |      |              | 47                   |       |       |                    | (11          | )     |               |      | 56    |       |       |  | 146    |        |        |  | 73     |        |        |  | 173    |       
|Other post-retirement benefits accounting     |                                                             |       | 21.6  |                     |      |              | (41                  | )     |       |                    | 49           |       |               |      | (49   | )     |       |  | 5      |        |        |  | 46     |        |        |  | 6      |       
|Stock compensation cost                       |                                                             |       | 21.12 |                     |      |              | (9                   | )     |       |                    | (85          | )     |               |      | (11   | )     |       |  | (76    | )      |        |  | (67    | )      |        |  | (90    | )     
|Early retirement program                      |                                                             |       | 21.5  |                     |      |              | (121                 | )     |       |                    | 197          |       |               |      | (143  | )     |       |  | 76     |        |        |  | 197    |        |        |  | 90     |       
|Gain on Real Estate disposal                  |                                                             |       | 21.11 |                     |      |              | 220                  |       |       |                    | (667         | )     |               |      | 261   |       |       |  | (447   | )      |        |  | (667   | )      |        |  | (529   | )     
|Intangible assets                             |                                                             |       |       |                     |      |              | 28                   |       |       |                    | 5            |       |               |      | 33    |       |       |  | (32    | )      |        |  | (60    | )      |        |  | (38    | )     
|Goodwill amortization and other intangibles   |                                                             |       | 21.7  |                     |      |              | 947                  |       |       |                    | (86          | )     |               |      | 1,121 |       |       |  | (775   | )      |        |  | 166    |        |        |  | (918   | )     
|Goodwill impairment                           |                                                             |       | 21.7  |                     |      |              | (69                  | )     |       |                    | (1,722       | )     |               |      | (82   | )     |       |  | 97     |        |        |  | (1,722 | )      |        |  | 115    |       
|Deferred taxes on equity reserves             |                                                             |       | 21.9  |                     |      |              |                     |       |       |                    |             |       |               |      |      |       |       |  | (571   | )      |        |  | (571   | )      |        |  | (676   | )     
|Investment in equity securities               |                                                             |       | 21.13 |                     |      |              | (4                   | )     |       |                    | 4            |       |               |      | (5    | )     |       |  | 19     |        |        |  | 9      |        |        |  | 22     |       
|Other differences                             |                                                             |       | 21.14 |                     |      |              | 24                   |       |       |                    | 10           |       |               |      | 28    |       |       |  | 61     |        |        |  | 37     |        |        |  | 72     |       
|Tax effect of reconciling items               |                                                             |       |       |                     |      |              | 62                   |       |       |                    | 146          |       |               |      | 73    |       |       |  | 29     |        |        |  | (27    | )      |        |  | 34     |       
|Minorities on reconciling items               |                                                             |       | 21.1  |                     |      |              | (10                  | )     |       |                    | 6            |       |               |      | (12   | )     |       |  | 9      |        |        |  | 19     |        |        |  | 11     |       
|                                              |                                                             |       |       |                     |      |              |                      |       |       |                    |              |       |               |      |       |       |       |  |        |        |       
|                                              | Amounts under U.S. GAAP corresponding to Parent
    Company |       |       |                     |      |              |                      | 4,698 |       |                    |              | 1,031 |               |      |       | 5,562 |       |  |        | 17,638 |        |  |        | 15,697 |        |  |        | 20,887 |       



F-77



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


CONSOLIDATED BALANCE SHEETS


|                                     |  |                    |        |              |               |  |        |      |  |  |        | 
|------------------------------------ |  | ------------------ | ------ | ------------ | ------------- |  | ------ | ---- |  |  | ------ | 
|                                     |  | As of December 31, |        |              |              
|                                     |  |                    |        |              |              
|                                     |  | 2005               |        |              | 2004          |  |        | 2005 | 
|                                     |  |                    |        |              |               |  |        |      | 
|                                     |  |                    |        | (millions of |              
|                                     |  | (millions of euro) |        |              | U.S. dollars) | 
|Assets                              
|Current Assets                       |  |                    | 12,654 |              |               |  | 16,761 |      |  |  | 14,985 | 
|Fixed Assets, net                    |  |                    | 30,320 |              |               |  | 37,589 |      |  |  | 35,905 | 
|Other non-current assets             |  |                    | 7,622  |              |               |  | 12,802 |      |  |  | 9,026  | 
|                                     |  |                    |        |              |               |  |        |      | 
|                                     |  |                    | 50,596 |              |               |  | 67,152 |      |  |  | 59,916 | 
|                                     |  |                    |        |              |               |  |        |      | 
|                                    
|Liabilities and Shareholders Equity
|Current liabilities                  |  |                    | 13,446 |              |               |  | 21,107 |      |  |  | 15,923 | 
|Long-term debt                       |  |                    | 10,967 |              |               |  | 20,291 |      |  |  | 12,987 | 
|Other non-current liabilities        |  |                    | 8,195  |              |               |  | 8,959  |      |  |  | 9,705  | 
|                                     |  |                    |        |              |               |  |        |      | 
|Total liabilities                    |  |                    | 32,608 |              |               |  | 50,357 |      |  |  | 38,615 | 
|Minority interest                    |  |                    | 350    |              |               |  | 1,098  |      |  |  | 414    | 
|Shareholders equity                 |  |                    | 17,638 |              |               |  | 15,697 |      |  |  | 20,887 | 
|                                     |  |                    |        |              |               |  |        |      | 
|                                     |  |                    | 50,596 |              |               |  | 67,152 |      |  |  | 59,916 | 
|                                     |  |                    |        |              |               |  |        |      | 



CONSOLIDATED STATEMENTS OF INCOME


|                                                 |  |                    |        |              |               |  |        |      |  |  |        |  
|------------------------------------------------ |  | ------------------ | ------ | ------------ | ------------- |  | ------ | ---- |  |  | ------ | -
|                                                 |  | 2005               |        |              | 2004          |  |        | 2005 | 
|                                                 |  |                    |        |              |               |  |        |      | 
|                                                 |  |                    |        | (millions of |              
|                                                 |  | (millions of euro) |        |              | U.S. dollars) | 
|Operating revenues                               |  |                    | 39,635 |              |               |  | 36,022 |      |  |  | 46,936 |  
|Operating expenses                               |  |                    | 31,627 |              |               |  | 32,316 |      |  |  | 37,453 |  
|                                                 |  |                    |        |              |               |  |        |      | 
|Operating income                                 |  |                    | 8,008  |              |               |  | 3,706  |      |  |  | 9,483  |  
|Financial loss                                   |  |                    | (944   | )            |               |  | (1,056 | )    |  |  | (1,118 | )
|Loss on equity method investments                |  |                    | (33    | )            |               |  | (36    | )    |  |  | (39    | )
|                                                 |  |                    |        |              |               |  |        |      | 
|Income before income taxes and minority interest |  |                    | 7,031  |              |               |  | 2,614  |      |  |  | 8,326  |  
|Income tax expense                               |  |                    | 2,086  |              |               |  | 1,485  |      |  |  | 2,470  |  
|                                                 |  |                    |        |              |               |  |        |      | 
|Income before minority interest                  |  |                    | 4,945  |              |               |  | 1,129  |      |  |  | 5,856  |  
|Minority interest                                |  |                    | (247   | )            |               |  | (98    | )    |  |  | (292   | )
|                                                 |  |                    |        |              |               |  |        |      | 
|Net income                                       |  |                    | 4,698  |              |               |  | 1,031  |      |  |  | 5,564  |  

F-78



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS
EQUITY


|                                                                |  |                    |        |              |               |  |        |      |  |  |        |  
|--------------------------------------------------------------- |  | ------------------ | ------ | ------------ | ------------- |  | ------ | ---- |  |  | ------ | -
|                                                                |  | 2005               |        |              | 2004          |  |        | 2005 | 
|                                                                |  |                    |        |              |               |  |        |      | 
|                                                                |  |                    |        | (millions of |              
|                                                                |  | (millions of euro) |        |              | U.S. dollars) | 
|U.S. GAAP shareholders equity at the beginning of
    the year |  |                    | 15,697 |              |               |  | 18,651 |      |  |  | 18,588 |  
|Movements during the year:                                      |  |                    |        |              |               |  |        |      |  |  |        |  
|Net income for the year                                         |  |                    | 4,698  |              |               |  | 1,031  |      |  |  | 5,562  |  
|Interim dividend                                                |  |                    | (1,169 | )            |               |  | (2,014 | )    |  |  | (1,384 | )
|Residual dividend                                               |  |                    | (2,214 | )            |               |  | (2,195 | )    |  |  | (2,622 | )
|Accumulated other comprehensive income (loss)                   |  |                    |        |              |               |  |        |      |  |  |        |  
| Minimum pension liabilities                                   |  |                    | 17     |              |               |  | 43     |      |  |  | 22     |  
|  Financial instruments                                        |  |                    | 241    |              |               |  | (45    | )    |  |  | 285    |  
|  Other                                                        |  |                    | 29     |              |               |  | (15    | )    |  |  | 34     |  
|Exercise of stock options                                       |  |                    | 339    |              |               |  | 241    |      |  |  | 401    |  
|                                                                |  |                    |        |              |               |  |        |      | 
|U.S. GAAP shareholders equity at the end of the
    year       |  |                    | 17,638 |              |               |  | 15,697 |      |  |  | 20,887 |  
|                                                                |  |                    |        |              |               |  |        |      | 



DISCLOSURE OF COMPREHENSIVE INCOME, NET OF TAX


|                                        |  |                    |       |              |               |  |       |      |  |  |       | 
|--------------------------------------- |  | ------------------ | ----- | ------------ | ------------- |  | ----- | ---- |  |  | ----- | 
|                                        |  | 2005               |       |              | 2004          |  |       | 2005 | 
|                                        |  |                    |       |              |               |  |       |      | 
|                                        |  |                    |       | (millions of |              
|                                        |  | (millions of euro) |       |              | U.S. dollars) | 
|Net income in accordance with U.S. GAAP |  |                    | 4,698 |              |               |  | 1,031 |      |  |  | 5,562 | 
|Minimum pension liabilities             |  |                    | 17    |              |               |  | 43    |      |  |  | 22    | 
|Investments in equity securities        |  |                    | 141   |              |               |  | 5     |      |  |  | 167   | 
|Derivatives                             |  |                    | 100   |              |               |  | (50   | )    |  |  | 118   | 
|Other changes                           |  |                    | 29    |              |               |  | (15   | )    |  |  | 34    | 
|                                        |  |                    |       |              |               |  |       |      | 
|Total comprehensive income              |  |                    | 4,985 |              |               |  | 1,014 |      |  |  | 5,903 | 
|                                        |  |                    |       |              |               |  |       |      | 

21.1.  Minority Interest




21.2.  Customers Connection Fees




F-79



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




21.3.  Fixed Assets and Related Depreciation






21.4.  Capitalized Interest and Related
Depreciation




F-80



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


21.4.1  Utility plant Disclosures




|                                 |                                  |                    |        |              |               |  |        |        |        |  |        |        |        | 
|-------------------------------- | -------------------------------- | ------------------ | ------ | ------------ | ------------- |  | ------ | ------ | ------ |  | ------ | ------ | ------ | 
|                                 |                                  | 2005               |        |              | 2004          |  |        | 2005   |       
|                                 |                                  |                    |        |              |               |  |        |        |       
|                                 |                                  |                    |        | (millions of |              
|                                 |                                  | (millions of euro) |        |              | U.S. dollars) | 
|Utility plant, gross:            |                                  |                    |        |              |               |  |        |        |        |  |        |       
|Generating Plant:                |                                  |                    |        |              |               |  |        |        |        |  |        |       
|                                 | Hydroelectric                    |                    |        | 6,661        |               |  |        | 6,506  |        |  |        | 7,888  |       
|                                 | Thermal                          |                    |        | 17,304       |               |  |        | 17,205 |        |  |        | 20,492 |       
|                                 | Geothermal and renewable sources |                    |        | 2,317        |               |  |        | 2,127  |        |  |        | 2,744  |       
|Transmission Line                |                                  |                    |       |              |               |  | 6,565  |        |        |  |       |       
|Distribution Electricity Network |                                  |                    | 33,710 |              |               |  | 32,551 |        |        |  | 39,919 |       
|Distribution Gas Network         |                                  |                    | 2,733  |              |               |  | 2,767  |        |        |  | 3,237  |       
|Telecommunication networks       |                                  |                    |       |              |               |  | 5,604  |        |        |  |       |       
|Land and Buildings               |                                  |                    | 1,792  |              |               |  | 2,449  |        |        |  | 2,122  |       
|Other                            |                                  |                    | 1,478  |              |               |  | 2,179  |        |        |  | 1,751  |       
|Construction in progress         |                                  |                    | 2,038  |              |               |  | 2,069  |        |        |  | 2,413  |       
|                                 |                                  |                    |        |              |               |  |        |        |       
|                                 |                                  | Total              |        |              | 68,033        |  |        |        | 80,022 |  |        |        | 80,566 | 
|                                 |                                  |                    |        |              |               |  |        |        |       
|Accumulated Depreciation:        |                                  |                    |        |              |               |  |        |        |        |  |        |       
|Generating Plant:                |                                  |                    |        |              |               |  |        |        |        |  |        |       
|                                 | Hydroelectric                    |                    |        | 2,595        |               |  |        | 2,484  |        |  |        | 3,073  |       
|                                 | Thermal                          |                    |        | 9,641        |               |  |        | 9,176  |        |  |        | 11,417 |       
|                                 | Geothermal and renewable sources |                    |        | 1,108        |               |  |        | 1,019  |        |  |        | 1,312  |       
|Transmission Line                |                                  |                    |       |              |               |  | 2,600  |        |        |  |       |       
|Distribution Electricity Network |                                  |                    | 21,867 |              |               |  | 21,102 |        |        |  | 25,895 |       
|Distribution Gas Network         |                                  |                    | 1,029  |              |               |  | 1,080  |        |        |  | 1,219  |       
|Telecommunication networks       |                                  |                    |       |              |               |  | 2,548  |        |        |  |       |       
|Land and Buildings               |                                  |                    | 607    |              |               |  | 947    |        |        |  | 719    |       
|Other                            |                                  |                    | 866    |              |               |  | 1,477  |        |        |  | 1,026  |       
|                                 |                                  |                    |        |              |               |  |        |        |       
|                                 |                                  | Total              |        |              | 37,713        |  |        |        | 42,433 |  |        |        | 44,661 | 
|                                 |                                  |                    |        |              |               |  |        |        |       
|Utility plant, net:              |                                  |                    |        |              |               |  |        |        |        |  |        |       
|Generating Plant:                |                                  |                    |        |              |               |  |        |        |        |  |        |       
|                                 | Hydroelectric                    |                    |        | 4,066        |               |  |        | 4,022  |        |  |        | 4,815  |       
|                                 | Thermal                          |                    |        | 7,663        |               |  |        | 8,029  |        |  |        | 9,075  |       
|                                 | Geothermal and renewable sources |                    |        | 1,209        |               |  |        | 1,108  |        |  |        | 1,432  |       
|Transmission Line                |                                  |                    |       |              |               |  | 3,965  |        |        |  |       |       
|Distribution Electricity Network |                                  |                    | 11,843 |              |               |  | 11,449 |        |        |  | 14,024 |       
|Distribution Gas Network         |                                  |                    | 1,704  |              |               |  | 1,687  |        |        |  | 2,018  |       
|Telecommunication networks       |                                  |                    |       |              |               |  | 3,056  |        |        |  |       |       
|Land and Buildings               |                                  |                    | 1,185  |              |               |  | 1,502  |        |        |  | 1,403  |       
|Other                            |                                  |                    | 612    |              |               |  | 702    |        |        |  | 725    |       
|Construction in progress         |                                  |                    | 2,038  |              |               |  | 2,069  |        |        |  | 2,413  |       
|                                 |                                  |                    |        |              |               |  |        |        |       
|                                 |                                  | Total              |        |              | 30,320        |  |        |        | 37,589 |  |        |        | 35,905 | 
|                                 |                                  |                    |        |              |               |  |        |        |       

F-81



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


21.5.  Early Retirement Program










|      |                             
|----- | ----------------------------
|21.6. | Employee Benefit Obligations





F-82



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


21.6.1.  Pension and Other Post-retirement Benefits
disclosures




|                                                                                                   |  |                    |        |                 |                    |       |        |      |  |  |        |   |  |  |        |  
|-------------------------------------------------------------------------------------------------- |  | ------------------ | ------ | --------------- | ------------------ | ----- | ------ | ---- |  |  | ------ | - |  |  | ------ | -
|                                                                                                   |  |                    |        |                 |                    | Other |       
|                                                                                                   |  |                    |        | Post-retirement |                   
|                                                                                                   |  | Pensions Benefits  |        |                 | Benefits           |      
|                                                                                                   |  |                    |        |                 |                    |      
|                                                                                                   |  | 2005               |        |                 | 2004               |       |        | 2005 |  |  | 2004   |  
|                                                                                                   |  |                    |        |                 |                    |       |        |      |  |  |        |  
|                                                                                                   |  | (millions of euro) |        |                 | (millions of euro) |      
|Change in Projected Benefit Obligation:                                                            |  |                    |        |                 |                    |       |        |      |  |  |        |   |  |  |        |  
|Benefit Obligation at Jan 1                                                                        |  |                    | 1,990  |                 |                    |       | 1,985  |      |  |  | 1,241  |   |  |  | 1,158  |  
|Service cost                                                                                       |  |                    | 78     |                 |                    |       | 101    |      |  |  | 6      |   |  |  | 12     |  
|Interest cost                                                                                      |  |                    | 78     |                 |                    |       | 104    |      |  |  | 48     |   |  |  | 56     |  
|Actuarial (gain) loss                                                                              |  |                    | (12    | )               |                    |       | 17     |      |  |  | 39     |   |  |  | 69     |  
|Settlement                                                                                         |  |                    | (48    | )               |                    |       | (209   | )    |  |  |       |   |  |  |       |  
|PBO of business acquired (disposed)                                                                |  |                    | (113   | )               |                    |       |       |      |  |  | (61    | ) |  |  |       |  
|Benefits paid                                                                                      |  |                    | (181   | )               |                    |       | (172   | )    |  |  | (53    | ) |  |  | (54    | )
|Adjustment(1)                                                                                      |  |                    |       |                 |                    |       | 163    |      |  |  |       |   |  |  |       |  
|Plan amendment                                                                                     |  |                    |       |                 |                    |       | 1      |      |  |  |       |   |  |  |       |  
|                                                                                                   |  |                    |        |                 |                    |       |        |      |  |  |        |  
|Benefit Obligation at Dec 31                                                                       |  |                    | 1,792  |                 |                    |       | 1,990  |      |  |  | 1,220  |   |  |  | 1,241  |  
|                                                                                                   |  |                    |        |                 |                    |       |        |      |  |  |        |  
|Change in Plan Asset:                                                                              |  |                    |        |                 |                    |       |        |      |  |  |        |   |  |  |        |  
|Fair value of plan assets at beginning of year                                                     |  |                    | 297    |                 |                    |       | 129    |      |  |  | 22     |   |  |  | 18     |  
|Actuarial return on plan assets                                                                    |  |                    | 14     |                 |                    |       | 12     |      |  |  | 1      |   |  |  | 1      |  
|Company contribution                                                                               |  |                    | 156    |                 |                    |       | 388    |      |  |  |       |   |  |  | 3      |  
|Benefit paid                                                                                       |  |                    | (111   | )               |                    |       | (178   | )    |  |  | (1     | ) |  |  | (1     | )
|Settlement                                                                                         |  |                    | (48    | )               |                    |       | (209   | )    |  |  |       |   |  |  |       |  
|Adjustments(1)                                                                                     |  |                    |       |                 |                    |       | 158    |      |  |  |       |   |  |  | 2      |  
|Gains/(Losses)                                                                                     |  |                    | 4      |                 |                    |       | (3     | )    |  |  | 4      |   |  |  | (1     | )
|                                                                                                   |  |                    |        |                 |                    |       |        |      |  |  |        |  
|Fair value of plan assets at end of year                                                           |  |                    | 312    |                 |                    |       | 297    |      |  |  | 26     |   |  |  | 22     |  
|                                                                                                   |  |                    |        |                 |                    |       |        |      |  |  |        |  
|Reconciliation of Funded Status of the Plan:                                                       |  |                    |        |                 |                    |       |        |      |  |  |        |   |  |  |        |  
|Funded (unfunded) status                                                                           |  |                    | (1,480 | )               |                    |       | (1,693 | )    |  |  | (1,194 | ) |  |  | (1,219 | )
|Unrecognized net (gain) loss                                                                       |  |                    | 400    |                 |                    |       | 377    |      |  |  | 42     |   |  |  | 51     |  
|Unrecognized net transition obligation                                                             |  |                    | (14    | )               |                    |       | (16    | )    |  |  |       |   |  |  |       |  
|                                                                                                   |  |                    |        |                 |                    |       |        |      |  |  |        |  
|Accrued benefit cost                                                                               |  |                    | (1,094 | )               |                    |       | (1,332 | )    |  |  | (1,152 | ) |  |  | (1,168 | )
|Adjustment for minimum liability                                                                   |  |                    | (265   | )               |                    |       | (291   | )    |  |  |       |   |  |  |       |  
|                                                                                                   |  |                    |        |                 |                    |       |        |      |  |  |        |  
|Amount recognized in the consolidated balance sheet                                                |  |                    | (1,359 | )               |                    |       | (1,623 | )    |  |  | (1,152 | ) |  |  | (1,168 | )
|                                                                                                   |  |                    |        |                 |                    |       |        |      |  |  |        |  
|Information for pension plans with an accumulated benefit
    obligation in excess of plan assets: |  |                    |        |                 |                    |       |        |      |  |  |        |   |  |  |        |  
|Projected benefit obligation                                                                       |  |                    | (1,794 | )               |                    |       | (1,990 | )    |  |  | (1,208 | ) |  |  | (1,241 | )
|Accumulated benefit obligation                                                                     |  |                    | (1,676 | )               |                    |       | (1,854 | )    |  |  | (1,134 | ) |  |  | (1,189 | )
|Fair value of plan assets                                                                          |  |                    | 312    |                 |                    |       | 297    |      |  |  | 26     |   |  |  | 22     |  






|    |                                                                                                                                                  
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The adjustments reflect the pension plans of certain Spanish
    companies that in the previous Annual Report were erroneously
    not disclosed.

F-83



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


|                                       |  |                    |        |                 |                    |       |        |      |  |  |        |   |  |  |        |  
|-------------------------------------- |  | ------------------ | ------ | --------------- | ------------------ | ----- | ------ | ---- |  |  | ------ | - |  |  | ------ | -
|                                       |  |                    |        |                 |                    | Other |       
|                                       |  |                    |        | Post-retirement |                   
|                                       |  | Pensions Benefits  |        |                 | Benefits           |      
|                                       |  |                    |        |                 |                    |      
|                                       |  | 2005               |        |                 | 2004               |       |        | 2005 |  |  | 2004   |  
|                                       |  |                    |        |                 |                    |       |        |      |  |  |        |  
|                                       |  | (millions of euro) |        |                 | (millions of euro) |      
|Prepaid benefit cost                   |  |                    |       |                 |                    |       |       |      |  |  |       |   |  |  |       |  
|Accrued benefit cost                   |  |                    | (1,359 | )               |                    |       | (1,623 | )    |  |  | (1,152 | ) |  |  | (1,168 | )
|Intangible assets                      |  |                    |       |                 |                    |       |       |      |  |  |       |   |  |  |       |  
|Accumulated other comprehensive income |  |                    | 265    |                 |                    |       | 291    |      |  |  |       |   |  |  |       |  
|                                       |  |                    |        |                 |                    |       |        |      |  |  |        |  
|Net amount recognized                  |  |                    | (1,094 | )               |                    |       | (1,332 | )    |  |  | (1,152 | ) |  |  | (1,168 | )
|                                       |  |                    |        |                 |                    |       |        |      |  |  |        |  

|                                          |  |              |     |             |              |  |     |      |  |  |      |   |  |  |    |  
|----------------------------------------- |  | ------------ | --- | ----------- | ------------ |  | --- | ---- |  |  | ---- | - |  |  | -- | -
|                                          |  |              |     | Other Post- |             
|                                          |  | Pensions     |     |             | retirement   | 
|                                          |  | Benefits     |     |             | Benefits     | 
|                                          |  |              |     |             |              | 
|                                          |  | 2005         |     |             | 2004         |  |     | 2005 |  |  | 2004 |  
|                                          |  |              |     |             |              |  |     |      |  |  |      |  
|                                          |  | (millions of |     |             | (millions of | 
|                                          |  | euro)        |     |             | euro)        | 
|Components of Net Periodic Benefit Cost:  |  |              |     |             |              |  |     |      |  |  |      |   |  |  |    |  
|Service cost                              |  |              | 78  |             |              |  | 101 |      |  |  | 6    |   |  |  | 12 |  
|Interest cost                             |  |              | 78  |             |              |  | 104 |      |  |  | 48   |   |  |  | 56 |  
|Expected return on plan assets            |  |              | (13 | )           |              |  | (13 | )    |  |  | (1   | ) |  |  | (1 | )
|Amortization and of actuarial (gain) loss |  |              | 13  |             |              |  | 17  |      |  |  |     |   |  |  |   |  
|                                          |  |              |     |             |              |  |     |      |  |  |      |  
|Net periodic benefit cost                 |  |              | 156 |             |              |  | 209 |      |  |  | 53   |   |  |  | 67 |  
|                                          |  |              |     |             |              |  |     |      |  |  |      |  
|Settlement cost and other adjustments     |  |              | 39  |             |              |  | 71  |      |  |  |     |   |  |  | 2  |  
|                                          |  |              |     |             |              |  |     |      |  |  |      |  
|Total cost accrual                        |  |              | 195 |             |              |  | 280 |      |  |  | 53   |   |  |  | 69 |  
|                                          |  |              |     |             |              |  |     |      |  |  |      |  



| |                       
| | ----------------------
| | Additional Information

|                                                                                    |  |              |    |  |      |  |    | 
|----------------------------------------------------------------------------------- |  | ------------ | -- |  | ---- |  | -- | 
|                                                                                    |  | Pensions     |   
|                                                                                    |  | Benefits     |   
|                                                                                    |  |              |   
|                                                                                    |  | 2005         |    |  | 2004 | 
|                                                                                    |  |              |    |  |      | 
|                                                                                    |  | (millions of |   
|                                                                                    |  | euro)        |   
|Increase (decrease) in minimum liability included in other
    comprehensive income |  |              | 26 |  |      |  | 53 | 

|                                                                                      |  |      |      |   |      |  |      |  
|------------------------------------------------------------------------------------- |  | ---- | ---- | - | ---- |  | ---- | -
|                                                                                      |  | 2005 |      |   | 2004 | 
|                                                                                      |  |      |      |   |      | 
|Assumed health care cost trend rates at December 31                                   |  |      |      |   |      |  |      |  
|Health care cost trend rate assumed for next year                                     |  |      | 3.00 | % |      |  | 3.00 | %
|Rate to which the cost trend rate is assumed to decline (the
    ultimate trend rate) |  |      | 3.00 | % |      |  | 3.00 | %
|Year that the rate reaches the ultimate trend rate                                    |  |      | 2006 |   |      |  | 2005 |  

F-84



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                                         |  |                    |    |  |                |  |     |  
|-------------------------------------------------------- |  | ------------------ | -- |  | -------------- |  | --- | -
|                                                         |  | 1-Percentage-      |    |  | 1-Percentage-  | 
|                                                         |  | Point Increase     |    |  | Point Decrease | 
|                                                         |  |                    |    |  |                | 
|                                                         |  | (millions of euro) |   
|Effect on total cost                                     |  |                    | 1  |  |                |  | (1  | )
|Effect on accumulated post-retirement benefit obligation |  |                    | 28 |  |                |  | (22 | )





| |                                  
| | ---------------------------------
| | Estimated Future Benefit Payments



|                |  |                    |       |  |                     |  |     | 
|--------------- |  | ------------------ | ----- |  | ------------------- |  | --- | 
|                |  | Pension            |       |  | Other Post-         | 
|                |  | Benefits           |       |  | retirement Benefits | 
|                |  |                    |       |  |                     | 
|                |  | (millions of euro) |      
|2006            |  |                    | 103   |  |                     |  | 56  | 
|2007            |  |                    | 111   |  |                     |  | 58  | 
|2008            |  |                    | 129   |  |                     |  | 60  | 
|2009            |  |                    | 156   |  |                     |  | 61  | 
|2010            |  |                    | 187   |  |                     |  | 63  | 
|Years 2011-2015 |  |                    | 1,129 |  |                     |  | 326 | 



|      |                                                     
|----- | ----------------------------------------------------
|21.7. | Business Combination, Goodwill and Intangible Assets









F-85



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)










|       |                                  
|------ | ---------------------------------
|21.7.1 | Camuzzi Purchase Price Allocation







|                              |  |                  |        |  
|----------------------------- |  | ---------------- | ------ | -
|                              |  | Millions of euro |       
|                              |  |                  |       
|Current assets                |  |                  | 479    |  
|Fixed assets, net             |  |                  | 866    |  
|Intangible assets             |  |                  | 632    |  
|Other non-current assets      |  |                  | 98     |  
|Total assets acquired         |  |                  | 2,075  |  
|Current liabilities           |  |                  | (658   | )
|Long-term debt                |  |                  | (228   | )
|Minority interest             |  |                  | (2     | )
|Other non-current liabilities |  |                  | (142   | )
|Total liabilities assumed     |  |                  | (1,030 | )
|Net assets acquired           |  |                  | 1,045  |  



F-86



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|       |                  
|------ | -----------------
|21.7.2 | EUFER Acquisition





|                              |  |                  |      |  
|----------------------------- |  | ---------------- | ---- | -
|                              |  | Millions of euro |     
|                              |  |                  |     
|Current assets                |  |                  | 46   |  
|Fixed assets, net             |  |                  | 168  |  
|Goodwill                      |  |                  | 123  |  
|Other non-current assets      |  |                  | 39   |  
|Total assets acquired         |  |                  | 376  |  
|Current liabilities           |  |                  | (47  | )
|Long-term debt                |  |                  | (135 | )
|Minority interest             |  |                  | (14  | )
|Other non-current liabilities |  |                  | (2   | )
|Total liabilities assumed     |  |                  | (198 | )
|Net assets acquired           |  |                  | 178  |  





|       |                 
|------ | ----------------
|21.7.3 | Wind Acquisition



F-87



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                              |  |                  |        |  
|----------------------------- |  | ---------------- | ------ | -
|                              |  | Millions of euro |       
|                              |  |                  |       
|Current assets                |  |                  | 395    |  
|Fixed assets, net             |  |                  | 922    |  
|Goodwill                      |  |                  | 855    |  
|Intangible assets             |  |                  | 595    |  
|Other non-current assets      |  |                  | 1,284  |  
|Total assets acquired         |  |                  | 4,051  |  
|Current liabilities           |  |                  | (622   | )
|Long-term debt                |  |                  | (1,855 | )
|Minority interest             |  |                  | (7     | )
|Other non-current liabilities |  |                  | (178   | )
|Total liabilities assumed     |  |                  | (2,662 | )
|Net assets acquired           |  |                  | 1,389  |  





|       |                    
|------ | -------------------
|21.7.4 | Maritza Acquisition





|                              |  |                  |      |  
|----------------------------- |  | ---------------- | ---- | -
|                              |  | Millions of euro |     
|                              |  |                  |     
|Current assets                |  |                  | 95   |  
|Fixed assets, net             |  |                  | 57   |  
|Goodwill                      |  |                  | 28   |  
|Other non-current assets      |  |                  | 9    |  
|Total assets acquired         |  |                  | 189  |  
|Current liabilities           |  |                  | (53  | )
|Long-term debt                |  |                  |     |  
|Minority interest             |  |                  | (61  | )
|Other non-current liabilities |  |                  |     |  
|Total liabilities assumed     |  |                  | (114 | )
|Net assets acquired           |  |                  | 75   |  

F-88



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|       |                   
|------ | ------------------
|21.7.5 | Viesgo Acquisition





|                              |  |                  |       |  
|----------------------------- |  | ---------------- | ----- | -
|                              |  | Millions of euro |      
|                              |  |                  |      
|Current assets                |  |                  | 252   |  
|Fixed assets, net             |  |                  | 1,421 |  
|Goodwill                      |  |                  | 757   |  
|Other non-current assets      |  |                  | 123   |  
|Total assets acquired         |  |                  | 2,553 |  
|Current liabilities           |  |                  | (457  | )
|Long-term debt                |  |                  | (12   | )
|Minority interest             |  |                  | (19   | )
|Other non-current liabilities |  |                  | (145  | )
|Total liabilities assumed     |  |                  | (633  | )
|Net assets acquired           |  |                  | 1,920 |  





|       |                     
|------ | --------------------
|21.7.6 | Goodwill disclosures



|                                                      |  |            |        |            |            |        |                |          |  |  |               |  |  |       |        |   |       |  |   |  |  |  |        |  
|----------------------------------------------------- |  | ---------- | ------ | ---------- | ---------- | ------ | -------------- | -------- |  |  | ------------- |  |  | ----- | ------ | - | ----- |  | - |  |  |  | ------ | -
|                                                      |  |            |        |            |            | Sales, |                |          |  |  |               |  | 
|                                                      |  |            |        | Generation |            |        | Infrastructure |          |  |  |               |  |  |      
|                                                      |  | Telecommu- |        |            | and Energy |        |                | and      |  |  | International |  |  |       |        |  
|                                                      |  | nications  |        |            | Management |        |                | Networks |  |  | Operations    |  |  | Other |        |   | Total | 
|                                                      |  |            |        |            |            |        |                |          |  |  |               |  |  |       |        |   |       | 
|Balance as of January 1, 2004                         |  |            | 6,213  |            |            |        |               |          |  |  |              |  |  |       | 1,064  |   |       |  |  |  |  |  | 7,277  |  
|Reclassification due to change in reorganized segment |  |            |       |            |            |        | 1,064          |          |  |  |              |  |  |       | (1,064 | ) |       |  |  |  |  |  |       |  
|Goodwill acquired during the year                     |  |            |       |            |            |        | 7              |          |  |  | 8             |  |  |       |       |   |       |  | 7 |  |  |  | 22     |  
|Impairment                                            |  |            | (3,393 | )          |            |        |               |          |  |  |              |  |  |       |       |   |       |  |  |  |  |  | (3,393 | )
|                                                      |  |            |        |            |            |        |                |          |  |  |               |  |  |       |        |   |       | 
|Balance as of December 31, 2004                       |  |            | 2,820  |            |            |        | 1,071          |          |  |  | 8             |  |  |       |        |   |       |  | 7 |  |  |  | 3,906  |  
|Exchange differences                                  |  |            |        |            |            |        | 23             |          |  |  |               |  |  |       |        |   |       |  |   |  |  |  | 23     |  
|Disposals(1)                                          |  |            | (2,820 | )          |            |        |                |          |  |  |               |  |  |       |        |   |       |  |   |  |  |  | (2,820 | )
|                                                      |  |            |        |            |            |        |                |          |  |  |               |  |  |       |        |   |       | 
|Balance as of December 31, 2005                       |  |            |       |            |            |        | 1,094          |          |  |  | 8             |  |  |       |        |   |       |  | 7 |  |  |  | 1,109  |  
|                                                      |  |            |        |            |            |        |                |          |  |  |               |  |  |       |        |   |       | 






|    |                                                                                                                                                                   
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Following the disposal of the 62.75% of stake in Wind, the
    remaining goodwill, equal to euro 1,050 million, has
    been classified in the related investment.

F-89



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|       |                              
|------ | -----------------------------
|21.7.7 | Intangible Assets disclosures

|                                     |  |               |     |   |          |  |          |           |  |  |     |  
|------------------------------------ |  | ------------- | --- | - | -------- |  | -------- | --------- |  |  | --- | -
|                                     |  | Customer      |     |   |          |  | Customer |          
|                                     |  | Relationships |     |   | Licences |  |          | Portfolio | 
|                                     |  |               |     |   |          |  |          |           | 
|Balance as of January 1, 2004, net   |  |               | 599 |   |          |  | 135      |           |  |  | 100 |  
|Additions in 2004                    |  |               | 21  |   |          |  |          |           |  |  |     |  
|2004 amortization expense            |  |               | (59 | ) |          |  | (13      | )         |  |  | (14 | )
|                                     |  |               |     |   |          |  |          |           | 
|Balance as of December 31, 2004, net |  |               | 561 |   |          |  | 122      |           |  |  | 86  |  
|Additions in 2005                    |  |               |    |   |          |  |         |           |  |  |    |  
|2005 amortization expense            |  |               | (51 | ) |          |  | (11      | )         |  |  | (8  | )
|Disposals in 2005                    |  |               | (60 | ) |          |  | (72      | )         |  |  | (78 | )
|                                     |  |               |     |   |          |  |          |           | 
|Balance as of December 31, 2005, net |  |               | 450 |   |          |  | 39       |           |  |  |    |  
|                                     |  |               |     |   |          |  |          |           | 





|      |                  
|----- | -----------------
|21.8. | Negative Goodwill







F-90



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|      |                           
|----- | --------------------------
|21.9. | Current and Deferred Taxes









|       |                                            
|------ | -------------------------------------------
|21.10. | Accounting for Asset Retirement Obligations









|       |                                     
|------ | ------------------------------------
|21.11. | Gain on sale of real estate business











|       |                               
|------ | ------------------------------
|21.12. | Stock option compensation cost

Accounting for Stock Issued to Employees.


F-91



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








|        |                                      
|------- | -------------------------------------
|21.12.1 | Stock option compensation disclosures





|                                 |  |           |             |   |               |  |     | 
|-------------------------------- |  | --------- | ----------- | - | ------------- |  | --- | 
|                                 |  | Number of |             |   | Average Grant | 
|                                 |  | Options   |             |   | Price (euro)  | 
|                                 |  |           |             |   |               | 
|Outstanding at January 1, 2001   |  |           | 5,513,200   |   |               |  | 8.6 | 
|Granted                          |  |           | 34,274,050  |   |               |  | 7.3 | 
|Exercised                        |  |           |            |   |               |  |    | 
|Forfeited                        |  |           | (15,080,582 | ) |               |  | 7.3 | 
|                                 |  |           |             |   |               | 
|Outstanding at December 31, 2001 |  |           | 24,706,668  |   |               |  | 7.6 | 
|                                 |  |           |             |   |               | 
|Outstanding at January 1, 2002   |  |           | 24,706,668  |   |               |  | 7.6 | 
|Granted                          |  |           | 41,748,500  |   |               |  | 6.4 | 
|Exercised                        |  |           |            |   |               |  |    | 
|Forfeited                        |  |           |            |   |               |  |    | 
|                                 |  |           |             |   |               | 
|Outstanding at December 31, 2002 |  |           | 66,455,168  |   |               |  | 6.9 | 
|                                 |  |           |             |   |               | 
|Outstanding at January 1, 2003   |  |           | 66,455,168  |   |               |  | 6.9 | 
|Granted                          |  |           | 47,624,005  |   |               |  | 5.2 | 
|Exercised                        |  |           |            |   |               |  |    | 
|Forfeited                        |  |           |            |   |               |  |    | 
|                                 |  |           |             |   |               | 
|Outstanding at December 31, 2003 |  |           | 114,079,173 |   |               |  | 6.2 | 
|                                 |  |           |             |   |               | 
|Outstanding at January 1, 2004   |  |           | 114,079,173 |   |               |  | 6.2 | 
|Granted                          |  |           | 38,527,550  |   |               |  | 6.2 | 
|Exercised                        |  |           | (40,446,675 | ) |               |  | 6.0 | 
|Forfeited                        |  |           | (17,309,226 | ) |               |  | 6.8 | 
|                                 |  |           |             |   |               | 
|Outstanding at December 31, 2004 |  |           | 94,850,822  |   |               |  | 6.2 | 
|                                 |  |           |             |   |               | 
|Outstanding at January 1, 2005   |  |           | 94,850,822  |   |               |  | 6.2 | 
|Granted                          |  |           | 28,757,000  |   |               |  | 7.3 | 
|Exercised                        |  |           | (53,549,782 | ) |               |  | 4.1 | 
|Forfeited                        |  |           | (29,639,535 | ) |               |  | 7.2 | 
|                                 |  |           |             |   |               | 
|Outstanding at December 31, 2005 |  |           | 40,418,505  |   |               |  | 5.9 | 
|                                 |  |           |             |   |               | 

F-92



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                                           |  |      |       |   |      |  |       |  
|---------------------------------------------------------- |  | ---- | ----- | - | ---- |  | ----- | -
|                                                           |  | 2005 |       |   | 2004 | 
|                                                           |  |      |       |   |      | 
|Net income in accordance with U.S. GAAP, as reported       |  |      | 4,698 |   |      |  | 1,031 |  
|Stock-based employee compensation expense, as reported     |  |      | 165   |   |      |  | 139   |  
|Stock-based employee compensation expense under fair value |  |      | (179  | ) |      |  | (122  | )
|Pro forma net income                                       |  |      | 4,684 |   |      |  | 1,048 |  



|                                     |  |             |      |  |           |  |      |             |  |  |           |  |  |  |      | 
|------------------------------------ |  | ----------- | ---- |  | --------- |  | ---- | ----------- |  |  | --------- |  |  |  | ---- | 
|                                     |  | 2005        |      |  | 2004      | 
|                                     |  |             |      |  |           | 
|                                     |  | As Reported |      |  | Pro Forma |  |      | As Reported |  |  | Pro Forma | 
|                                     |  |             |      |  |           |  |      |             |  |  |           | 
|Basic and diluted earnings per share |  |             | 0.77 |  |           |  | 0.76 |             |  |  | 0.17      |  |  |  | 0.17 | 





|       |                                 
|------ | --------------------------------
|21.13. | Investments in Equity Securities







|       |                  
|------ | -----------------
|21.14. | Other differences





|       |                           
|------ | --------------------------
|21.15. | Classification Differences

Discontinued operations










|       |                                        
|------ | ---------------------------------------
|21.16. | Recently U.S. Accounting Pronouncements

Variable interest entities.


F-93



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




04-5, 04-5. 04-5


Financial instruments with characteristics of both
liabilities and equity.


Other than temporary impairment of investments. 03-1, 03-1 held-to held-to 03-1 03-1 03-1


Guidance in Determining Whether to Report Discontinued
Operations. 03-13, 03-13


F-94



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


03-13


Share-Based Payments. Share-Based
Payment Accounting for Stock-Based Compensation. Accounting for Stock Issued to Employees Statement of Cash Flows.


Exchanges of Nonmonetary Assets


Determining the Amortization period for leasehold
improvements. 05-6, 05-6


Accounting for Accumulated Other Comprehensive Income.


F-95



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|     |                                 
|---- | --------------------------------
|(22) | ADDITIONAL U.S. GAAP DISCLOSURES



|    |                            
|--- | ---------------------------
|(a) | Accounting for Income Taxes



|         |  |                    |       |              |               |  |       |      |  |  |       | 
|-------- |  | ------------------ | ----- | ------------ | ------------- |  | ----- | ---- |  |  | ----- | 
|         |  | 2005               |       |              | 2004          |  |       | 2005 | 
|         |  |                    |       |              |               |  |       |      | 
|         |  |                    |       | (millions of |              
|         |  | (millions of euro) |       |              | U.S. dollars) | 
|Current  |  |                    | 1,398 |              |               |  | 1,525 |      |  |  | 1,656 | 
|Deferred |  |                    | 688   |              |               |  | (40   | )    |  |  | 815   | 
|         |  |                    |       |              |               |  |       |      | 
|Total    |  |                    | 2,086 |              |               |  | 1,485 |      |  |  | 2,471 | 
|         |  |                    |       |              |               |  |       |      | 





|                                                      |  |      |      |    |      |  |      |   
|----------------------------------------------------- |  | ---- | ---- | -- | ---- |  | ---- | --
|                                                      |  | 2005 |      |    | 2004 | 
|                                                      |  |      |      |    |      | 
|Theoretical tax rate *                                |  |      | 33.0 | %  |      |  | 33.0 | % 
|Change in tax rates                                   |  |      | 0.0  | %  |      |  | 0.0  | % 
|Permanent differences                                 |  |      | (9.7 | )% |      |  | 13.8 | % 
|Minor items                                           |  |      | 0.7  | %  |      |  | (1.0 | )%
|Difference on estimated income taxes from prior years |  |      | 0.2  | %  |      |  | (0.5 | )%
|Regional taxes (IRAP)                                 |  |      | 5.4  | %  |      |  | 11.5 | % 
|                                                      |  |      |      |    |      | 
|Income tax rate for the year                          |  |      | 29.6 | %  |      |  | 56.8 | % 
|                                                      |  |      |      |    |      | 






|  |                                          
|- | -----------------------------------------
|* | Italian Corporate income tax rate (IRES).



| |                                                                                                                                                            
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------
| | The permanent differences mainly relate to the un-taxable gain
    on disposal of investment and undeductible impairment of
    Telecommunication goodwill.

F-96



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                                    |  |                     |        |              |               |  |        |      |  |  |        |  
|--------------------------------------------------- |  | ------------------- | ------ | ------------ | ------------- |  | ------ | ---- |  |  | ------ | -
|                                                    |  | For the Years Ended |       
|                                                    |  | December 31,        |       
|                                                    |  |                     |       
|                                                    |  | 2005                |        |              | 2004          |  |        | 2005 | 
|                                                    |  |                     |        |              |               |  |        |      | 
|                                                    |  |                     |        | (millions of |              
|                                                    |  | (millions of euros) |        |              | U.S. dollars) | 
|Deferred tax assets:                                |  |                     |        |              |               |  |        |      |  |  |        |  
|Deferred tax assets:                                |  |                     |        |              |               |  |        |      |  |  |        |  
|Other post retirement benefits accounting           |  |                     |       |              |               |  | 376    |      |  |  |       |  
|Assets write-downs                                  |  |                     |       |              |               |  | 377    |      |  |  |       |  
|Provision for litigation and contingent liabilities |  |                     | 515    |              |               |  | 658    |      |  |  | 610    |  
|Tax loss carryforwards                              |  |                     | 343    |              |               |  | 1,500  |      |  |  | 406    |  
|Customers connection fees                          |  |                     | 681    |              |               |  | 550    |      |  |  | 806    |  
|Measurement of financial assets                     |  |                     | 146    |              |               |  |       |      |  |  | 173    |  
|Deferred income                                     |  |                     | 174    |              |               |  | 220    |      |  |  | 206    |  
|Other                                               |  |                     | 821    |              |               |  | 479    |      |  |  | 972    |  
|                                                    |  |                     |        |              |               |  |        |      | 
|Total deferred tax assets                           |  |                     | 2,680  |              |               |  | 4,160  |      |  |  | 3,173  |  
|Valuation allowances                                |  |                     | (218   | )            |               |  | (595   | )    |  |  | (258   | )
|                                                    |  |                     |        |              |               |  |        |      | 
|Total deferred tax assets, net                      |  |                     | 2,462  |              |               |  | 3,565  |      |  |  | 2,915  |  
|                                                    |  |                     |        |              |               |  |        |      | 
|Deferred tax liabilities:                           |  |                     |        |              |               |  |        |      |  |  |        |  
|Other post retirement benefits accounting           |  |                     | (2     | )            |               |  |       |      |  |  | (2     | )
|Assets write-downs                                  |  |                     | (172   | )            |               |  |       |      |  |  | (204   | )
|Revaluation of utility plant                        |  |                     | (95    | )            |               |  | (222   | )    |  |  | (112   | )
|Accelerated depreciation of utility plant           |  |                     | (1,640 | )            |               |  | (2,087 | )    |  |  | (1,942 | )
|Capitalization of interest on utility plant         |  |                     | (460   | )            |               |  | (465   | )    |  |  | (545   | )
|Equity reserves                                     |  |                     | (282   | )            |               |  | (581   | )    |  |  | (334   | )
|Other                                               |  |                     | (20    | )            |               |  | (356   | )    |  |  | (24    | )
|                                                    |  |                     |        |              |               |  |        |      | 
|Total deferred tax liabilities                      |  |                     | (2,671 | )            |               |  | (3,711 | )    |  |  | (3,163 | )
|                                                    |  |                     |        |              |               |  |        |      | 
|Net deferred tax liabilities                        |  |                     | (209   | )            |               |  | (146   | )    |  |  | (248   | )
|                                                    |  |                     |        |              |               |  |        |      | 







| |   |                             
| | - | ----------------------------
| |  | 2006: euro 16 million;      
|
| |  | 2007: euro 16 million;      
|
| |  | 2008: euro 14 million;      
|
| |  | 2009: euro 12 million;      
|
| |  | 2010: euro 24 million;      
|
| |  | no limits: euro 864 million.

F-97



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|                                 |  |                    |     |   |      |  |    |  
|-------------------------------- |  | ------------------ | --- | - | ---- |  | -- | -
|                                 |  | 2005               |     |   | 2004 | 
|                                 |  |                    |     |   |      | 
|                                 |  | (millions of euro) |    
|Minimum Pension Liabilities      |  |                    | (17 | ) |      |  | 20 |  
|Investments in equity securities |  |                    | 2   |   |      |  | (2 | )





|    |                   
|--- | ------------------
|(b) | Earnings per Share



|                                                |  |                     |       |              |                |  |       |      |  |  |       | 
|----------------------------------------------- |  | ------------------- | ----- | ------------ | -------------- |  | ----- | ---- |  |  | ----- | 
|                                                |  | 2005                |       |              | 2004           |  |       | 2005 | 
|                                                |  |                     |       |              |                |  |       |      | 
|                                                |  |                     |       | (millions of |               
|                                                |  | (millions of euro)* |       |              | U.S. dollars)* | 
|Income available to common shareholders         |  |                     | 4,698 |              |                |  | 1,031 |      |  |  | 5,563 | 
|Weighted average shares  basic (in millions)   |  |                     | 6,142 |              |                |  | 6,087 |      |  |  | 6,142 | 
|Weighted average shares  diluted (in millions) |  |                     | 6,171 |              |                |  | 6,215 |      |  |  | 6,171 | 
|Earnings per share-basic:                       |  |                     | 0.76  |              |                |  | 0.17  |      |  |  | 0.91  | 
|Earnings per share-diluted:                     |  |                     | 0.76  |              |                |  | 0.17  |      |  |  | 0.90  | 






|    |                                                         
|--- | --------------------------------------------------------
|(*) | Except per-share data which is in euro and U.S. dollars.



|    |                      
|--- | ---------------------
|(c) | Effects of Regulation





|    |            
|--- | -----------
|(d) | Derivatives



F-98



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






| |                                                   
| | --------------------------------------------------
| | (d.1) Derivative Financial Instruments disclosures







| |   |                                                                                                                                                                                                                                                                                                                                                                                                                      
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | For cash flow hedges, the effective portion of the
    gain or loss from the derivative hedging instrument is
    accumulated in other comprehensive income (OCI) and
    recognized in earnings during the period that the hedged
    forecasted transaction impacts earnings. The ineffective portion
    of the gain or loss from the derivative hedging instrument is
    recognized in earnings immediately.
|
| |  | For fair value hedges, the gain or loss on the
    derivative instrument designated and qualifying as a fair value
    hedging instrument as well as the offsetting loss or gain on the
    hedged item attributable to the hedged risk is recognized
    currently in earnings in the same accounting period.                                                                                                     
|
| |  | For all other derivative contracts which do not qualify for the
    special hedge accounting treatment under SFAS 133, gains
    and losses are recorded in earnings each reporting period.                                                                                                                                                                                                                          







| |                                                                                                                                                                                                                                                         
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a. It has (1) one or more underlying and (2) one
    or more notional amounts or payment provisions or both.                                                                                                                                            
|
| | b. No initial net investment or an initial net investment
    that is smaller than would be required for other types of
    contracts that would be expected to have a similar response to
    changes in market factors.                               
|
| | c. Its terms require or permit net settlement, it can
    readily be settled net by a means outside the contract, or it
    provides for delivery of an asset that puts the recipient in a
    position not substantially different from net settlement.





| |                       
| | ----------------------
| | (d.2) Cash Flow Hedges





F-99



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








|                      |       |          |      |        |          |  |              |          |   |  |          |        |  |          |              |      |          |  |    |          |  |  |              |      |   |          |      |      |          |  |     |     |  |  |     |     |   |  |      |      |  
|--------------------- | ----- | -------- | ---- | ------ | -------- |  | ------------ | -------- | - |  | -------- | ------ |  | -------- | ------------ | ---- | -------- |  | -- | -------- |  |  | ------------ | ---- | - | -------- | ---- | ---- | -------- |  | --- | --- |  |  | --- | --- | - |  | ---- | ---- | -
|                      |       |          |      | Gains/ |          |  | Reclassified |          |   |  |          | Gains/ |  |          | Reclassified |      |          |  |    | Gains/   |  |  | Reclassified |      |   |         
|                      |       | OCI at   |      |        | Losses   |  |              | to       |   |  | OCI at   |        |  | Losses   |              |      | to       |  |    | OCI at   |  |  | Losses       |      |   | to       |      |      | OCI at   | 
|                      |       | December |      |        | Recorded |  |              | Earnings |   |  | December |        |  | Recorded |              |      | Earnings |  |    | December |  |  | Recorded     |      |   | Earnings |      |      | December | 
|Type of Operation:    |       | 31, 2002 |      |        | in 2003  |  |              | in 2003  |   |  | 31, 2003 |        |  | in 2004  |              |      | in 2004  |  |    | 31, 2004 |  |  | in 2005      |      |   | in 2005  |      |      | 31, 2005 | 
|                      |       |          |      |        |          |  |              |          |   |  |          |        |  |          |              |      |          |  |    |          |  |  |              |      |   |          |      |      |          | 
|Interest rate swaps   |       |          | (270 | )      |          |  | (29          | )        |   |  | 14       |        |  |          | (285         | )    |          |  | 24 |          |  |  | (106         | )    |   |          | (367 | )    |          |  | 188 |     |  |  | (80 | )   |   |  | (259 | )   
|Interest rate collars |       |          | (4   | )      |          |  | (3           | )        |   |  |          |        |  |          | (7           | )    |          |  | 11 |          |  |  | (5           | )    |   |          | (1   | )    |          |  | 1   |     |  |  |     |     |   |  | 0    |     
|Swaptions             |       |          | (2   | )      |          |  | 2            |          |   |  |          |        |  |          | 0            |      |          |  |    |          |  |  |              |      |   |          | 0    |      |          |  |     |     |  |  |     |     |   |  | 0    |     
|CFD with Single Buyer |       |          |      |        |          |  |              |          |   |  |          |        |  |          |              |      |          |  |    |          |  |  |              |      |   |          | 0    |      |          |  | 57  |     |  |  |     |     |   |  | 57   |     
|                      | Total |          |      | (276   | )        |  |              | (30      | ) |  |          | 14     |  |          |              | (292 | )        |  |    | 35       |  |  |              | (111 | ) |          |      | (368 | )        |  |     | 246 |  |  |     | (80 | ) |  |      | (202 | )













F-100



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                                   
| | ----------------------------------
| | (d.2.1) Other Derivative Contracts



|                                                |  |              |     |   |      |  |    |  
|----------------------------------------------- |  | ------------ | --- | - | ---- |  | -- | -
|                                                |  | Gain/Losses  |    
|                                                |  | included in  |    
|                                                |  | earnings     |    
|                                                |  |              |    
|Type of Operation                               |  | 2005         |     |   | 2004 | 
|                                                |  |              |     |   |      | 
|                                                |  | (millions of |    
|                                                |  | euro)        |    
|Interest rate swaps                             |  |              |    |   |      |  | (2 | )
|Interest rate collars                           |  |              | 12  |   |      |  | (8 | )
|Swaptions                                       |  |              |    |   |      |  |   |  
|Forward exchange agreements                     |  |              | (6  | ) |      |  | 1  |  
|Options                                         |  |              |    |   |      |  |   |  
|Commodity swaps                                 |  |              | (25 | ) |      |  | 7  |  
|Commodity futures                               |  |              | 13  |   |      |  | 2  |  
|Contract for differences                        |  |              | 43  |   |      |  |   |  
|National and International congestion contracts |  |              |    |   |      |  |   |  
|Options                                         |  |              | 2   |   |      |  |   |  
|Total                                           |  |              | 39  |   |      |  |   |  





| |                                                               
| | --------------------------------------------------------------
| | (d.3) Notional Amounts and Credit Exposures of
    Derivatives







F-101



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                                    
| | -----------------------------------
| | (d.4) Interest Rate Risk Management



|                      |  |                    |       |  |      |  |        | 
|--------------------- |  | ------------------ | ----- |  | ---- |  | ------ | 
|                      |  | Notional Amount    |      
|                      |  |                    |      
|                      |  | 2005               |       |  | 2004 | 
|                      |  |                    |       |  |      | 
|                      |  | (millions of euro) |      
|Interest rate swaps   |  |                    | 4,866 |  |      |  | 9,633  | 
|Interest rate collars |  |                    | 62    |  |      |  | 690    | 
|Swaptions             |  |                    | 69    |  |      |  | 60     | 
|                      |  |                    |       |  |      | 
|Total                 |  |                    | 4,997 |  |      |  | 10,383 | 
|                      |  |                    |       |  |      | 









| |                                            
| | -------------------------------------------
| | (d.5) Foreign Exchange Rate Risk Management



|                                                                       |  |              |       |  |      |  |       | 
|---------------------------------------------------------------------- |  | ------------ | ----- |  | ---- |  | ----- | 
|                                                                       |  | Notional     |      
|                                                                       |  | Amount       |      
|                                                                       |  |              |      
|                                                                       |  | 2005         |       |  | 2004 | 
|                                                                       |  |              |       |  |      | 
|                                                                       |  | (millions of |      
|                                                                       |  | euro)        |      
|Forward exchange contracts relating to Commodity hedging               |  |              | 1,357 |  |      |  | 536   | 
|Forward exchange contracts relating to hedges of commercial paper      |  |              | 35    |  |      |  | 715   | 
|Forward exchange contracts relating to hedges of future cash
    flows |  |              | 212   |  |      |  | 319   | 
|Other forward exchange contracts                                       |  |              | 194   |  |      |  | 215   | 
|Options                                                                |  |              | 73    |  |      |  | 85    | 
|                                                                       |  |              |       |  |      | 
|Total                                                                  |  |              | 1,871 |  |      |  | 1,870 | 
|                                                                       |  |              |       |  |      | 

F-102



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






| |   |                                                                                                                                                                                                                                                                        
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | contracts with a notional amount of euro 1,569 million
    used to hedge the foreign exchange risk related to fuel
    purchases, electricity imports and expected cash flows in
    currencies other than the euro (euro 855 million as of
    December 31, 2004); and
|
| |  | contracts with a notional amount of euro 35 million
    used to hedge the foreign exchange risk related to the repayment
    of the commercial paper the Company issued in foreign currency
    (euro 715 million as of December 31, 2004).                            





over-the




| |                                
| | -------------------------------
| | (d.6) Commodity Risk Management



over-the over-the




F-103



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)














| |   |                                                                                                                           
| | - | --------------------------------------------------------------------------------------------------------------------------
| |  | Futures on commodities: euro 290.7 million or 5,971
    contracts;                                                        
|
| |  | Options on commodities: euro 0.2 million or 24,165
    metric tons; euro 9 million for options on copper and
    aluminum;
|
| |  | Swaps on petroleum indexes: euro 613.2 million or
    2,013,355 metric tons;                                              
|
| |  | Swaps and forwards on power: euro 107.5 million;                                                                          
|
| |  | Swaps on gas transmission fee: euro 17.6 million,
    5 years and 1 billion cubic meters per year;                        
|
| |  | Contracts for differences: euro
    7,638 million; and                                                                    
|
| |  | National and International congestion contracts: no
    contracts for 2006.                                               





| |   |                                                                                                   
| | - | --------------------------------------------------------------------------------------------------
| |  | Futures on commodities: no contracts existing at the
    balance sheet date;                      
|
| |  | Options on commodities: no contracts existing at the
    balance sheet date;                      
|
| |  | Swaps on petroleum indexes: euro 537.56 million or
    4,133,000 tons;                            
|
| |  | Swaps on gas transmission fee: euro 17,9 million,
    6 years and 1 billion cubic meters per year;
|
| |  | Contracts for differences: euro
    5,133 million; and                                            
|
| |  | National and International congestion contracts: euro
    118 million.                            

(d.7)     Fair Value of Financial
Instruments








| |   |                                                                                                                                                     
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Cash and cash equivalents: the carrying values of cash and cash
    equivalents approximate their fair values because of their short
    maturities.

F-104



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |   |                                                                                                                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Investments in equity securities classified as available for
    sale: the carrying value of such investments reflects their fair
    value as of the balance sheet date.                          
|
| |  | Short-term debt: the carrying value of short-term debt
    approximates fair value because of the short period of time
    between the origination and maturity of the borrowings.                 
|
| |  | Other noncurrent assets: the carrying value of such assets
    reflects their fair value as of the balance sheet date.                                                                             
|
| |  | Bonds payable-listed: the fair value of bonds payable-listed is
    based upon period-end market prices.                                                                                           
|
| |  | Other bonds and long-term debt (including current maturities):
    the fair values of other bonds and long-term debt (including
    current maturities) are based on discounted cash flow analysis.

|                                                             |  |                    |       |  |       |  |       |          |  |  |        |  |  |  |        | 
|------------------------------------------------------------ |  | ------------------ | ----- |  | ----- |  | ----- | -------- |  |  | ------ |  |  |  | ------ | 
|                                                             |  | As of December 31, |      
|                                                             |  |                    |      
|                                                             |  | 2005               |       |  | 2005  |  |       | 2004     |  |  | 2004   | 
|                                                             |  | Carrying           |       |  | Fair  |  |       | Carrying |  |  | Fair   | 
|                                                             |  | Amount             |       |  | Value |  |       | Amount   |  |  | Value  | 
|                                                             |  |                    |       |  |       |  |       |          |  |  |        | 
|                                                             |  | (millions of euro) |      
|Bonds payable-listed                                         |  |                    | 6,465 |  |       |  | 6,864 |          |  |  | 7,610  |  |  |  | 7,989  | 
|Other bonds and long-term debt, including current maturities |  |                    | 5,520 |  |       |  | 5,573 |          |  |  | 14,212 |  |  |  | 14,207 | 
|                                                             |  |                    |       |  |       |  |       |          |  |  |        | 



|                                                                  |  |              |      |   |      |  |      |  
|----------------------------------------------------------------- |  | ------------ | ---- | - | ---- |  | ---- | -
|                                                                  |  | As of        |     
|                                                                  |  | December, 31 |     
|                                                                  |  |              |     
|                                                                  |  | 2005         |      |   | 2004 | 
|                                                                  |  |              |      |   |      | 
|                                                                  |  | Fair Value   |     
|                                                                  |  | (millions of |     
|                                                                  |  | euro)        |     
|Interest rate swaps                                               |  |              | (315 | ) |      |  | (408 | )
| assets                                                          |  |              | 12   |   |      |  | 46   |  
| liabilities                                                     |  |              | (327 | ) |      |  | (454 | )
|Interest rate collars                                             |  |              |     |   |      |  | (13  | )
| assets                                                          |  |              |     |   |      |  |     |  
| liabilities                                                     |  |              |     |   |      |  | (13  | )
|Swaptions                                                         |  |              |     |   |      |  |     |  
| assets                                                          |  |              |     |   |      |  |     |  
| liabilities                                                     |  |              |     |   |      |  |     |  
|Total interest rate derivatives                                   |  |              | (315 | ) |      |  | (421 | )
| assets                                                          |  |              | 12   |   |      |  | 46   |  
| liabilities                                                     |  |              | (327 | ) |      |  | (467 | )
|Forward exchange contracts relating to commodity hedging          |  |              | (5   | ) |      |  | (34  | )
| assets                                                          |  |              | 6    |   |      |  |     |  
| liabilities                                                     |  |              | (11  | ) |      |  | (34  | )
|Forward exchange contracts relating to hedge of commercial papers |  |              | 1    |   |      |  | (28  | )
| assets                                                          |  |              | 1    |   |      |  |     |  
| liabilities                                                     |  |              |     |   |      |  | (28  | )

F-105



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


|                                                                  |  |              |      |   |      |  |      |  
|----------------------------------------------------------------- |  | ------------ | ---- | - | ---- |  | ---- | -
|                                                                  |  | As of        |     
|                                                                  |  | December, 31 |     
|                                                                  |  |              |     
|                                                                  |  | 2005         |      |   | 2004 | 
|                                                                  |  |              |      |   |      | 
|                                                                  |  | Fair Value   |     
|                                                                  |  | (millions of |     
|                                                                  |  | euro)        |     
|Forward exchange contracts relating to hedge of future cash flows |  |              | (2   | ) |      |  | 4    |  
| assets                                                          |  |              | 1    |   |      |  | 8    |  
| liabilities                                                     |  |              | (3   | ) |      |  | (4   | )
|Other Forward exchange contracts                                  |  |              |     |   |      |  |     |  
| assets                                                          |  |              | 1    |   |      |  | 3    |  
| liabilities                                                     |  |              | (1   | ) |      |  | (3   | )
|Futures                                                           |  |              | 16   |   |      |  |     |  
| assets                                                          |  |              | 17   |   |      |  |     |  
| liabilities                                                     |  |              | (1   | ) |      |  |     |  
|Options                                                           |  |              | (8   | ) |      |  | (10  | )
| assets                                                          |  |              | 2    |   |      |  |     |  
| liabilities                                                     |  |              | (10  | ) |      |  | (10  | )
|Swaps on Petroleum and Coal indexes                               |  |              | (13  | ) |      |  | 12   |  
| assets                                                          |  |              | 11   |   |      |  | 22   |  
| liabilities                                                     |  |              | (24  | ) |      |  | (10  | )
|Swaps and forward (Power)                                         |  |              | (1   | ) |      |  | 2    |  
| assets                                                          |  |              | 397  |   |      |  | 2    |  
| liabilities                                                     |  |              | (398 | ) |      |  |     |  
|Gas Transmission fee                                              |  |              | (12  | ) |      |  | (12  | )
| assets                                                          |  |              |      |   |      |  |      |  
| liabilities                                                     |  |              | (12  | ) |      |  | (12  | )
|Contracts for differences                                         |  |              | 100  |   |      |  |     |  
| assets                                                          |  |              | 100  |   |      |  |     |  
| liabilities                                                     |  |              |     |   |      |  |     |  
|National and international congestion contracts differences       |  |              |     |   |      |  |     |  
| assets                                                          |  |              |     |   |      |  |     |  
| liabilities                                                     |  |              |     |   |      |  |     |  
|Total                                                             |  |              | (239 | ) |      |  | (487 | )
| assets                                                          |  |              | 548  |   |      |  | 81   |  
| liabilities                                                     |  |              | (787 | ) |      |  | (568 | )



|     |                  
|---- | -----------------
|(23) | SUBSEQUENT EVENTS



|    |                      
|--- | ---------------------
|(a) | Sale of stake in Wind





F-106



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|    |                                                
|--- | -----------------------------------------------
|(b) | Sale of Carbones Colombianos del Cerrejon (CCC)





|    |                          
|--- | -------------------------
|(c) | New acquisition in Russia









|    |                                               
|--- | ----------------------------------------------
|(d) | Disposal of power distribution and sale assets







|    |                                    
|--- | -----------------------------------
|(e) | Acquisition of Slovenské Elektrárne





F-107



---



##### Table of Contents



ENEL S.P.A. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|    |               
|--- | --------------
|(f) | Binding offers





|    |                                                                          
|--- | -------------------------------------------------------------------------
|(g) | Transfer to Union Fenosa of 30% stake of Enel Union Fenosa
    Renovables





|    |                           
|--- | --------------------------
|(h) | New acquisition in Romania







|    |                          
|--- | -------------------------
|(i) | New acquisition in Brazil







|    |                            
|--- | ---------------------------
|(j) | New acquisition in Bulgaria








F-108



---



##### Table of Contents



Report of Independent Registered Public Accounting Firm






|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1 | We have audited the consolidated balance sheets of Wind
    Telecomunicazioni SpA (an Italian corporation) and its
    subsidiaries (the Company) as of December 31,
    2004, and the related consolidated statements of income, of
    changes in shareholders equity and of cash flows for the
    year then ended (expressed in Euro). These financial statements
    are the responsibility of the Companys management. Our
    responsibility is to express an opinion on these financial
    statements based on our audits.                                                                                                                                                                                   
| 
|2 | We conducted our audits in accordance with the standards of the
    Public Company Accounting Oversight Board (United States). Those
    standards require that we plan and perform the audit to obtain
    reasonable assurance about whether the financial statements are
    free of material misstatement. 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
    management, as well as evaluating the overall financial
    statement presentation. We believe that our audits provide a
    reasonable basis for our opinion.
| 
|3 | The consolidated financial statements as of December 31,
    2004 do not include comparative information and notes for 2003
    that would be required to present the financial position, the
    result of operations and the cash flows in conformity with
    International Financial Reporting Standards as adopted by EU. As
    described in the notes, in fact, these consolidated financial
    statements are intended to comprise the comparative financial
    statements to the year ended December 31, 2005, which will
    be the first IFRS compliant consolidated financial statements.                                                                                                                   
| 
|4 | In our opinion, except for the matter reported in the previous
    paragraph regarding the omission of comparative financial
    information for 2003, the consolidated financial statements
    referred to above present fairly, in all material respects, the
    financial position of Wind Telecomunicazioni SpA and its
    subsidiaries as of December 31, 2004 and the results of
    their operations and their cash flows for the year then ended,
    in conformity with the International Financial Reporting
    Standards issued by the International Accounting Standards Board
    as adopted by EU.                                                                                                      
| 
|5 | We draw your attention to the matters regarding deferred tax
    assets and intangible assets as described in the notes to the
    consolidated financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| 
|6 | International Financial Reporting Standards vary in certain
    significant respects from accounting principles generally
    accepted in the United States of America. Information relating
    to the nature and effect of such differences is presented in the
    notes to the consolidated financial statements under the caption
    US GAAP schedules and additional disclosures.                                                                                                                                                                                                                                                                                                                                  

Rome, 22 June 2006




|                           | 
|-------------------------- | 
|PricewaterhouseCoopers SpA | 
|                          
|Sergio Duca                | 
|Partner                    | 

F-109



---



##### Table of Contents



SIGNATURES








| |                                
| | -------------------------------
| | ENEL S.P.A.                    
| |                                
| | (Registrant)                   
|
| | /s/ Luigi Ferraris             
| |                                
| | Name: Luigi Ferraris           
| | Title:  Chief Financial Officer
|
| | /s/ Claudio Machetti           
| |                                
| | Name: Claudio Machetti         
| | Title:  Chief Financial Officer

F-110