SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549  FORM 20-F  o
     REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934ORx
     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2009ORo
     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934ORo
     SHELL COMPANY REPORT PURSUANT TO SECTION 23 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  Date of event requiring this shell company report  For the transition period from                       to  Commission file number: 001-12440  ENERSIS S.A.(Exact name of Registrant as specified in its charter)ENERSIS S.A.(Translation of Registrant’s name into English)CHILE(Jurisdiction of incorporation or organization)SANTA ROSA 76, SANTIAGO, CHILE(Address of principal executive offices)Nicolás Billikopf,  (56-2) 353-4639,  nbe@enersis.cl, Santa Rosa 76, Piso 15, Santiago, Chile(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
  Securities registered or to be registered pursuant to Section 12(b) of the Act:  Title of Each Class
     
     Name of Each Exchange on Which RegisteredAmerican Depositary Shares representing Common Stock
     
     New York Stock ExchangeCommon Stock, no par value *
     
     New York Stock Exchange$ 249,734,000 7.40% Notes due December 1, 2016
     
     New York Stock Exchange$ 858,000 6.60% Notes due December 1, 2026
     
     New York Stock Exchange
  
 *Listed, not for trading, but only in connection with the registration of American Depositary Shares, pursuant to the requirements of the Securities and Exchange Commission.  Securities registered or to be registered pursuant to Section 12(g) of the Act: None  Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:  $ 350,000,000 7.375% Notes due January 15, 2014
  Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report: Shares of Common Stock:
     32,651,166,465
  Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act: xYesoNo  If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934: oYesxNo  Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: xYesoNo  Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act:  Large accelerated filerx
     
     Accelerated filero
     
     Non-accelerated filero
  Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:  U.S. GAAPo
     
     International Financial Reporting Standards as issued
by the International Accounting Standards Boardx
     
     Othero
  Indicate by check mark which financial statement item the registrant has elected to follow: oItem 17oItem 18  If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): oYesxNo


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Enersis Simplified Organizational Structure (*) as of December 31, 2009
  
 (*) Only principal operating subsidiaries are presented here. Percentage ownership includes Enersis direct and indirect equity interests.   2


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TABLE OF CONTENTS  PageGLOSSARY
     4INTRODUCTION
     6Financial Information
     6Technical Terms
     7Calculation of Economic Interest
     7Forward-Looking Statements
     7PART I
     9Item 1.
     Identity of Directors, Senior Management and Advisers
     9Item 2.
     Offer Statistics and Expected Timetable
     9Item 3.
     Key Information
     9Item 4.
     Information on the Company
     19Item 4A.
     Unresolved Staff Comments
     75Item 5.
     Operating and Financial Review and Prospects
     75Item 6.
     Directors, Senior Management and Employees
     96Item 7.
     Major Shareholders and Related Party Transactions
     105Item 8.
     Financial Information
     107Item 9.
     The Offer and Listing
     108Item 10.
     Additional Information
     110Item 11.
     Quantitative and Qualitative Disclosures about Market Risk
     124Item 12
     Description of Securities Other Than Equity Securities
     129PART II
     130Item 13.
     Defaults, Dividend Arrearages and Delinquencies
     130Item 14.
     Material Modifications to the Rights of Security Holders and Use of Proceeds
     130Item 15.
     Controls and Procedures
     130Item 16A.
     Audit Committee Financial Expert
     131Item 16B.
     Code of Ethics
     131Item 16C.
     Principal Accountant Fees and Services
     132Item 16D.
     Exemptions from Listing Requirements for Audit Committees
     133Item 16E.
     Purchases of Equity Securities by the Issuer and Affiliated Purchasers
     133Item 16F.
     Change in Registrant’s Certifying Accountants
     133Item 16G.
     Corporate Governance
     133PART III.
     134Item 17.
     Financial Statements
     134Item 18.
     Financial Statements
     134Item 19.
     Exhibits
     134
  3


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GLOSSARY  Acciona
     
     ACCIONA, S.A.
     
     Spanish construction holding company. Together with Enel, Acciona held a controlling interest in Endesa Spain until June 25, 2009.AFP
     
     Administradora de Fondos de Pensiones
     
     A legal entity that manages a Chilean pension fund.Ampla
     
     Ampla Energia e Serviços S.A.
     
     Brazilian distribution company operating in Rio de Janeiro, owned by Endesa Brasil, a subsidiary of Enersis.ANEEL
     
     Agéncia Nacional de Energia Elétrica
     
     Brazilian governmental agency for electric energy.Betania
     
     Central Hidroeléctrica de Betania S.A. E.S.P.
     
     Endesa Chile’s Colombian subsidiary which merged with Emgesa, another Endesa Chile subsidiary, in 2007.Bureau Veritas
     
     Bureau Veritas
     
     International independent certification company.Cachoeira Dourada
     
     Centrais Elétricas Cachoeira Dourada S.A.
     
     Brazilian generation company owned by Endesa Brasil, a subsidiary of Enersis.CAM
     
     Compañía Americana de Multiservicios Ltda.
     
     Enersis’ subsidiary engaged in the electrical parts procurement business.Cammesa
     
     Compañía Administradora del Mercado Mayorista Eléctrico S.A.
     
     Argentine autonomous entity in charge of the operation of theMercado Eléctrico Mayorista(Wholesale Electricity Market), or MEM. Cammesa’s stockholders are generation, transmission and distribution companies, large users and the Secretariat of Energy.CDEC
     
     Centro de Despacho Económico de Carga
     
     Autonomous entity in two Chilean electric systems in charge of coordinating the efficient operation and dispatch of units to satisfy demand.Celta
     
     Compañía Eléctrica Tarapacá S.A.
     
     Endesa Chile’s subsidiary that operates in the SING with thermal plants.Cemsa
     
     Endesa Cemsa S.A.
     
     Energy trading company with operations in Argentina, a subsidiary of Endesa Chile.Chilectra
     
     Chilectra S.A.
     
     Chilean electricity distribution company operating in the Santiago metropolitan area, a subsidiary of Enersis.CIEN
     
     Companhia de Interconexão Energética S.A.
     
     Brazilian transmission company, wholly-owned by Endesa Brasil, a subsidiary of Enersis.CNE
     
     Comisión Nacional de Energía
     
     Chilean National Energy Commission, governmental entity with responsibilities under the Chilean regulatory framework.
  4


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Codensa
     
     Codensa S.A. E.S.P.
     
     Colombian distribution company that operates mainly in Bogotá, and is a subsidiary of Enersis.Coelce
     
     Companhia Energética do Ceará S.A.
     
     Brazilian distribution company operating in the state of Ceará. Coelce is controlled by Endesa Brasil, a subsidiary of Enersis.CREG
     
     Comisión de Regulación de Energía y Gas
     
     Colombian Commission for the Regulation of Energy and Gas.CTM
     
     Compañía de Transmisión del Mercosur
     
     Endesa Brasil’s subsidiary transmission company with operations in Argentina.DECA
     
     Distribuidora de Energía de Cundinamarca S.A.
     
     Colombian distribution company, subsidiary of CodensaEdegel
     
     Edegel S.A.A.
     
     Peruvian generation company, subsidiary of Endesa Chile.Edelnor
     
     Empresa de Distribución Eléctrica de Lima Norte S.A.A.
     
     Peruvian distribution company with a concession area in the northern part of Lima, and a subsidiary of Enersis.Edesur
     
     Empresa Distribuidora Sur S.A.
     
     Argentine distribution company with concession area in the south of the Buenos Aires greater metropolitan area, and a subsidiary of Enersis.EEB
     
     Empresa de Energía de Bogota S.A.
     
     Colombian stated-owned financial and energy holding company, with investments in the electricity generation, transmission, commercialization and distribution sectors; and in the natural gas transmission, distribution and commercialization sectors.El Chocón
     
     Central Hidroeléctrica El Chocón S.A.
     
     Endesa Chile’s subsidiary with two hydroelectric plants, El Chocón and Arroyito, both located in the Limay River, Argentina.Elesur
     
     Elesur S.A.
     
     A former Chilean subsidiary of Enersis that absorbed Chilectra, and later changed its name to Chilectra.Emgesa
     
     Emgesa S.A. E.S.P.
     
     Colombian generation company controlled by Endesa Chile.Endesa Brasil
     
     Endesa Brasil S.A.
     
     Brazilian holding company, a subsidiary of Enersis.Endesa Chile
     
     Empresa Nacional de Electricidad S.A.
     
     Our generation subsidiary with operations in four countries in South America.Endesa Costanera
     
     Endesa Costanera S.A.
     
     Argentine generation company controlled by Endesa Chile.Endesa Eco
     
     Endesa Eco S.A.
     
     Chilean electricity company, owner ofCentral Eólica Canela S.A.and Ojos de agua mini hydro plant.Endesa Eco is an Endesa Chile subsidiary.Endesa Fortaleza
     
     Central Geradora Termelétrica Fortaleza S.A.
     
     Operates a combined cycle generating plant, located in the state of Ceará.  Endesa Fortaleza is wholly-owned by our subsidiary Endesa Brasil.Endesa Latinoamérica
     
     Endesa Latinoamérica, S.A.U.
     
     A subsidiary of Endesa Spain and our direct controller, formerly known as Endesa Internacional, S.A.Endesa Spain
     
     ENDESA, S.A.
     
     A Spanish electricity generation and distribution company with a 60.6% beneficial interest in Enersis.Enel
     
     Enel S.p.A.
     
     Italian power company, with a 92.1% controlling ownership of Endesa Spain.Enersis
     
     ENERSIS S.A.
     
     Our company, a publicly held limited liability stock company incorporated under the laws of the Republic of Chile, with subsidiaries engaged primarily in the generation, transmission and distribution of electricity in Chile, Argentina, Brazil, Colombia and Peru. Registrant of this report.ENRE
     
     Ente Nacional Regulatorio de la Energía
     
     Argentine national regulatory authority for the energy sector.Etevensa
     
     Empresa de Generación Termoeléctrica Ventanilla S.A.
     
     Peruvian generation company that merged with Edegel in 2006.Foninvenem
     
     Fondo Para Inversiones Necesarias Que Permitan Incrementar La Oferta De Energía Eléctrica En El Mercado Eléctrico Mayorista
     
     Argentine fund created to increase electricity supply in the MEM.GasAtacama
     
     GasAtacama S.A.
     
     Company involved in gas transportation and electricity generation in the north of Chile that is 50% owned by Endesa Chile.Gener
     
     AES Gener S.A.
     
     Chilean generation company that competes with the Company in Chile, Argentina, Brazil and Colombia.GNLQ
     
     Gas Natural Quintero S.A.
     
     Company created to develop, build, finance, own and operate a LNG regasification facility at Quintero Bay (Chile) in which LNG will be unloaded, stored and regasified.IFRS
     
     International Financial Reporting Standards
     
     Accounting standards adopted by the Company on January 1, 2009.IMV
     
     Inmobiliaria Manso de Velasco Ltda.
     
     Enersis’ wholly-owned subsidiary engaged in the real estate business.LNG
     
     Liquefied Natural Gas.
     
     Liquefied natural gas.MEM
     
     Mercado Eléctrico Mayorista
     
     Wholesale Electricity Market in Argentina.MME
     
     Ministério de Minas e Energia
     
     Ministry of Mines and Energy of Brazil.NCRE
     
     Non Conventional Renewable Energy
     
     Refers to energy sources which are continuously replenished by natural processes, such as wind, biomass, mini-hydro, geothermal, wave or tidal energy.NIS
     
     Sistema Interconectado Nacional
     
     National interconnected electric system. There are such systems in Chile, Argentina, Brazil and Colombia.ONS
     
     Operador Nacional do Sistema Elétrico
     
     Electric System National Operator. Brazilian non-profit private entity responsible for the planning and coordination of operations in interconnected systems.Osinergmin
     
     Organismo Supervisor de la Inversión en Energía y Minería
     
     Energy and Mining Investment Supervisor Authority, the Peruvian regulatory electricity authority.Pangue
     
     Empresa Eléctrica Pangue S.A.
     
     Chilean electricity company, owner of the Pangue power station. Pangue is an Endesa Chile subsidiary.Pehuenche
     
     Empresa Eléctrica Pehuenche S.A.
     
     Chilean electricity company, owner of three power stations in the Maule River basin. Pehuenche is an Endesa Chile subsidiary.San Isidro
     
     Compañía Eléctrica San Isidro S.A.
     
     Chilean electricity company, owner of a thermal power station.  San Isidro is wholly-owned by Endesa Chile.SEF
     
     Superintendencia de Electricidad y Combustible
     
     Chilean Superintendency of Electricity and Fuels, a Governmental entity in charge of supervising the Chilean electricity industry.SEIN
     
     Sistema Eléctrico Interconectado Nacional
     
     Peruvian interconnected electric system.SIC
     
     Sistema Interconectado Central
     
     Chilean central interconnected electric system covering all of Chile except the north and the extreme south.SING
     
     Sistema Interconectado del Norte Grande
     
     Electric interconnected system operating in northern Chile.SVS
     
     Superintendencia de Valores y Seguros
     
     Chilean authority in charge of supervising public companies, securities and the insurance business.TESA
     
     Transportadora del Energía de Mercosur S.A.
     
     Endesa Brasil’s transmission company subsidiary with operations in Argentina.UF
     
     Unidad de Fomento
     
     Chilean inflation-indexed, peso-denominated monetary unit.UTA
     
     Unidad Tributaria Anual
     
     Chilean annual tax unit. One UTA equals 12 UTM.UTM
     
     Unidad Tributaria Mensual
     
     Chilean monthly tax unit used to define fines, among other purposes.VAD
     
     Valor Agregado de Distribución
     
     Value added from distribution of electricity.VNR
     
     Valor Nuevo de Reemplazo
     
     The net replacement value of electricity assets.
  5


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INTRODUCTION  As used in this report on Form 20-F, first person personal pronouns such as “we,” “us” or “our” refer to ENERSIS S.A.  (Enersis or the Company) and our consolidated subsidiaries unless the context indicates otherwise.  Unless otherwise noted, our interest in our principal subsidiaries and affiliates is expressed in terms of our economic interest as of December 31, 2009.  We are a Chilean company with subsidiaries engaged primarily in the generation, transmission and distribution of electricity in Chile, Argentina, Brazil, Colombia and Peru.  As of the date of this report, we own 60.0% of Empresa Nacional de Electricidad S.A. (Endesa Chile) and 99.1% of Chilectra S.A.  As of the same date ENDESA S.A. (Endesa Spain), a Spanish electricity generation and distribution company, owns 60.6% of Enersis.  Enel S.p.A. (Enel), an Italian generation and distribution company, owns through a wholly-owned subsidiary 92.1% of Endesa Spain.  Financial Information  In this report on Form 20-F, unless otherwise specified, references to “dollars” or “$” are to dollars of the United States of America; references to “pesos” or “Ch$” are to Chilean pesos, the legal currency of Chile; references to “Ar$” or “Argentine pesos” are to the legal currency of Argentina; references to “R$” or “reais” are to the Brazilian real, the legal currency of Brazil; references to “soles” are to Peruvian Nuevo Sol, the legal currency of Peru; references to “CPs” or “Colombian pesos” are to the legal currency of Colombia; references to “€” or “Euros” are to the legal currency of the European Union; and references to “UF” are toUnidades de Fomento.  TheUnidad de Fomentois a Chilean inflation-indexed, peso-denominated monetary unit.  The UF rate is set daily in advance based on changes in the previous month’s inflation rate.  As of December 31, 2009, UF 1 was equivalent to Ch$ 20,942.88.  The dollar equivalent of UF 1 was $ 41.30 at December 31, 2009, using the Observed Exchange Rate, reported by theBanco Central de Chile(the Chilean Central Bank or the Central Bank) as of December 31, 2009 of Ch$ 507.10 per $ 1.00.  As of May 31, 2010, UF 1 was equivalent to Ch$ 21,112.41.  The dollar equivalent of UF 1 was $ 39.79 as of May 31, 2010, using the Observed Exchange Rate reported by the Central Bank of Ch$ 530.62 per $ 1.00.  Our Consolidated Financial Statements and, unless otherwise indicated, other financial information concerning to Enersis included in this report are presented in pesos.  Until the year ended December 31, 2008, Enersis prepared its financial statements in accordance with generally accepted accounting principles in Chile (Chilean GAAP).  In accordance with the rules of the Superintendency of Securities and Insurance (SVS), for 2009, Enersis has prepared its financial statements in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standard Board (IASB).  The opening IFRS statement of financial position was prepared as of January 1, 2008.  A description of the principal differences between Chilean GAAP and IFRS applicable to Enersis, a reconciliation of our shareholders’ equity as of January 1 and December 31, 2008, and a reconciliation to the net income for the year ended December 31, 2008 from Chilean GAAP to IFRS, are included in Note 40 to our Consolidated Financial Statements.  Subsidiaries are consolidated by the global integration method, incorporating into the Consolidated Financial Statements all assets, liabilities, income, expenses and cash flows after making the corresponding adjustments and eliminations for intra-company transactions.  Jointly-controlled entities, which are those that do not have a controlling shareholder but are governed by a joint management agreement, are consolidated by the proportional integration method. Enersis recognizes, line by line, its share of the assets, liabilities, income and expenses of such entities, so that the aggregation of balances and subsequent eliminations, takes place only in the proportions of Enersis’ shares in them.  Investments in associates over which the Company has significant influence, are recorded in our Consolidated Financial Statements under the equity method.  For detailed information regarding subsidiaries, jointly-controlled entities and associates, see Appendix No. 1 of the Consolidated Financial Statements.  For the convenience of the reader, this report contains translations of certain peso amounts into dollars at specified rates.  Unless otherwise indicated, the dollar equivalent for information in pesos is based on the Observed Exchange Rate, as defined in “Item 3.  Key Information — A. Selected Financial Data — Exchange Rates” as of December 31, 2009.  The Federal Reserve Bank of New York does not report a noon buying rate for pesos.  No representation is made that the peso or dollar amounts shown in this report could have been or could be converted into dollars or pesos, as the case may be, at such rate or at any other rate (See "Item 3.  Key Information — A. Selected Financial Data — Exchange Rates").  6


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Technical Terms  References to “GW” and “GWh” are to gigawatts and gigawatt hours, respectively; references to “MW” and “MWh” are to megawatts and megawatt hours, respectively; references to “kW” and “kWh” are to kilowatts and kilowatt hours, respectively; references to “kV” are to kilovolts, and references to “MVA” are to megavolt amperes.  Unless otherwise indicated, statistics provided in this report with respect to electricity generation facilities are expressed in MW, in the case of the installed capacity of such facilities.  One TW = 1,000 GW, one GW = 1,000 MW, and one MW = 1,000 kW.  Statistics relating to aggregate annual electricity production are expressed in GWh and based on a year of 8,760 hours, except for 2008, a leap year, based on 8,784 hours.  Statistics relating to installed capacity and production of the electricity industry do not include electricity of self-generators.  Statistics relating to our production do not include electricity consumed by us from our generators.  Energy losses experienced by generation companies during transmission are calculated by subtracting the number of GWh of energy sold from the number of GWh of energy generated (excluding own energy consumption and losses of the power plant), within a given period.  Losses are expressed as a percentage of total energy generated.  Energy losses during distribution are calculated as the difference between total energy purchased (GWh of physical demand, including own generation) and the energy sold (GWh), within a given period.  Losses are expressed as a percentage of total energy purchased.  Losses in distribution arise from illegally tapped energy as well as technical failures.  Calculation of Economic Interest  References are made in this report to the “economic interest” of Enersis in its related companies.  In circumstances where we do not directly own an interest in a related company, our economic interest in such ultimate related company is calculated by multiplying the percentage economic interest in a directly held related company by the percentage economic interest of any entity in the ownership chain of such related company.  For example, if we own 60% of a directly held subsidiary and that subsidiary owns 40% of an associate, our economic interest in such associate would be 24%.  Forward-Looking Statements  This report contains statements that are or may constitute forward-looking statements.  These statements appear throughout this report and include statements regarding our intent, belief or current expectations, including but not limited to any statements concerning:  ·our capital investment program;  ·trends affecting our financial condition or results from operations;  ·our dividend policy;  ·the future impact of competition and regulation;  ·political and economic conditions in the countries in which we or our related companies operate or may operate in the future;  ·any statements preceded by, followed by or that include the words “believes,” “expects,” “predicts,” “anticipates,” “intends,” “estimates,” “should,” “may” or similar expressions; and  ·other statements contained or incorporated by reference in this report regarding matters that are not historical facts.  Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements.  Factors that could cause actual results to differ materially include, but are not limited to:  7


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·changes in the regulatory framework of the electric industry in one or more of the countries in which we operate;  ·our ability to implement proposed capital expenditures, including our ability to arrange financing where required;  ·the nature and extent of future competition in our principal markets;  ·political, economic and demographic developments in the emerging market countries of South America where we conduct our business; and  ·the factors discussed below under “Risk Factors.”  You should not place undue reliance on such statements, which speak only as of the date that they were made.  Our independent public accountants have not examined or compiled the forward-looking statements, and, accordingly, do not provide any assurance with respect to such statements.  You should consider these cautionary statements together with any written or oral forward-looking statements that we may issue in the future.  We do not undertake any obligation to release publicly any revisions to forward-looking statements contained in this report to reflect later events or circumstances or to reflect the occurrence of unanticipated events.  For all these forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.  8


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PART I  Item 1.   Identity of Directors, Senior Management and Advisers  Not applicable.  Item 2.   Offer Statistics and Expected Timetable  Not applicable.  Item 3.   Key Information  A.            Selected Financial Data.  The following summary of consolidated financial data should be read in conjunction with our audited Consolidated Financial Statements, included in this report.  Our audited Consolidated Financial Statements as of and for the years ended December 31, 2009 and 2008 are prepared in accordance with International Financial Reporting Standards (IFRS), as issued by the IASB.  For further detail on the adoption of IFRS, please see Introduction  Financial Information.  The financial data as of and for each of the two years ended December 31, 2009 in the table below are presented in nominal pesos.  In general, amounts are expressed in million except for ratios, operating data, shares and ADS data.  For the convenience of the reader, all data presented in dollars in the following summary, from and at the end of the year ended December 31, 2009, are translated at the Observed Exchange Rate for December 31, 2009 of Ch$ 507.10 per $ 1.00.  No representation is made that the peso or dollar amounts shown in this report could have been or could be converted into dollars or pesos, at such rate or at any other rate.  For more information concerning historical exchange rates, see Exchange Rates below.   9


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The following table sets forth the selected consolidated financial data of Enersis S.A. in accordance with IFRS for the periods indicated:  As of and for the year ended December 31,2008
     
     2009
     
     2009 (1)Ch$ Million
     
     Million of $CONSOLIDATED INCOME STATEMENT DATAAmounts in accordance with IFRSRevenues from Operations
     
     6,559,591
     
     6,449,888
     
     12,719Operating Costs
     
     (4,695,941)
     
     (4,525,252)
     
     (8,924)Operating Income
     
     1,863,651
     
     1,924,636
     
     3,795Interest (Expense), Net
     
     (419,330)
     
     (309,118)
     
     (610)Total gain (loss) on sale of non-current assets not held for sale
     
     2,503
     
     53,311
     
     105Other non Operating Income (loss), net
     
     3,261
     
     2,236
     
     5Income (loss) before Income Taxes
     
     1,450,085
     
     1,671,065
     
     3,295Income taxes
     
     (415,903)
     
     (359,737)
     
     (709)Net Income
     
     1,034,182
     
     1,311,328
     
     2,586Net income attributable to: Shareholders of the company
     
     507,590
     
     660,231
     
     1,302Net income attributable to: Minority Interest
     
     526,592
     
     651,097
     
     1,284Net income (loss) from continuing operations per Share (Ch$/$ per share)
     
     15.55
     
     20.22
     
     0.0399Net income (loss) from continuing operations per ADS
     
     777.29
     
     1,011.04
     
     1.9938Net Income (loss) per Share (Ch$/$ per share)
     
     15.55
     
     20.22
     
     0.0399Net Income (loss) per ADS (Ch$/$ per ADS)
     
     777.29
     
     1,011.04
     
     1.9938Cash Dividends per Share (Ch$/$ per share)
     
     4.95
     
     7.02
     
     0.0138Cash Dividends per ADS (Ch$/$ per ADS)
     
     247.50
     
     351.00
     
     0.6922Capital stock
     
     2,983,642
     
     2,983,642Number of shares of common stock (thousands)
     
     32,651,166
     
     32,651,166Number of American Depository Shares (thousands)
     
     71,267
     
     81,303CONSOLIDATED BALANCE SHEET DATAAmounts in accordance with IFRSTotal Assets
     
     13,781,176
     
     13,210,140
     
     26,050Non-Current Liabilities
     
     5,049,265
     
     4,637,749
     
     9,146Equity Attributable to Shareholders of the Company
     
     3,091,315
     
     3,518,480
     
     6,780Equity Attributable to Minority Interest
     
     2,937,816
     
     2,858,524
     
     5,637Other Consolidated Financial DataAmounts in accordance with IFRSCapital Expenditures Paid (2)
     
     781,542
     
     736,474
     
     1,452Depreciation, amortization and impairment losses
     
     417,113
     
     520,297
     
     1,026
  (1)Solely for the convenience of the reader, peso amounts have been translated into dollars at the exchange rate of Ch$ 507.10 per dollar, the Observed Exchange Rate as of December 31, 2009. (2)Capex figures represent effective payments for each year.   10


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As of and for the year ended December 31,2005
     
     2006
     
     2007
     
     2008
     
     2009OPERATING DATA OF SUBSIDIARIESChilectra (Chile)Electricity Sold (GWh)
     
     11,851
     
     12,377
     
     12,923
     
     12,535
     
     12,585Number of Customers (thousands)
     
     1,404
     
     1,437
     
     1,483
     
     1,534
     
     1,579Total Energy Losses (%)(1)
     
     5.5%
     
     5.4%
     
     5.9%
     
     5.9%
     
     6.1%Edesur (Argentina)Electricity Sold (GWh)
     
     14,018
     
     14,837
     
     15,833
     
     16,160
     
     16,026Number of Customers (thousands)
     
     2,165
     
     2,196
     
     2,228
     
     2,262
     
     2,305Total Energy Losses (%)(1)
     
     11.4%
     
     10.5%
     
     10.7%
     
     10.6%
     
     10.5%Ampla (Brazil)Electricity Sold (GWh)
     
     8,174
     
     8,668
     
     8,985
     
     9,119
     
     9,394Number of Customers (thousands)
     
     2,216
     
     2,316
     
     2,379
     
     2,466
     
     2,522Total Energy Losses (%)(1)
     
     22.4%
     
     21.9%
     
     21.4%
     
     20.2%
     
     21.2%Coelce (Brazil)Electricity Sold (GWh)
     
     6,580
     
     6,769
     
     7,227
     
     7,571
     
     7,860Number of Customers (thousands)
     
     2,438
     
     2,543
     
     2,689
     
     2,842
     
     2,965Total Energy Losses (%)(1)
     
     14.0%
     
     13.0%
     
     12.5%
     
     11.7%
     
     11.6%Codensa (Colombia)(5)Electricity Sold (GWh)
     
     10,094
     
     10,755
     
     11,441
     
     11,822
     
     12,144Number of Customers (thousands)
     
     2,073
     
     2,138
     
     2,209
     
     2,285
     
     2,476Total Energy Losses (%)(1)
     
     9.4%
     
     8.9%
     
     8.7%
     
     8.1%
     
     8.4%Edelnor (Peru)Electricity Sold (GWh)
     
     4,530
     
     4,874
     
     5,201
     
     5,599
     
     5,716Number of Customers (thousands)
     
     925
     
     952
     
     986
     
     1,028
     
     1,061Total Energy Losses (%)(1)
     
     8.6%
     
     8.2%
     
     8.1%
     
     8.2%
     
     8.1%Endesa ChileInstalled capacity in Chile (MW)(4)
     
     4,477
     
     4,477
     
     4,779
     
     5,283
     
     5,650Installed capacity in Argentina (MW)
     
     3,623
     
     3,639
     
     3,644
     
     3,652
     
     3,652Installed capacity in Colombia (MW)
     
     2,657
     
     2,779
     
     2,829
     
     2,895
     
     2,895Installed capacity in Peru (MW)
     
     969
     
     1,426
     
     1,468
     
     1,467
     
     1,667Production in Chile (GWh)(2) (4)
     
     18,764
     
     19,973
     
     18,773
     
     21,267
     
     22,239Production in Argentina (GWh)(2)
     
     12,333
     
     13,750
     
     12,117
     
     10,480
     
     11,955Production in Colombia (GWh)(2)
     
     11,864
     
     12,564
     
     11,942
     
     12,905
     
     12,674Production in Brazil (GWh)(2)(3)
     
     2,645
     
     -
     
     -
     
     -
     
     -Production in Peru (GWh)(2)
     
     4,516
     
     6,662
     
     7,654
     
     8,102
     
     8,163Endesa BrasilInstalled capacity in Brazil (MW)(3)
     
     1,039
     
     980
     
     987
     
     987
     
     987Production in Brazil (GWh)(2)(3)
     
     3,954
     
     4,489
     
     3,954
     
     3,379
     
     3,319
  (1)Energy losses are calculated as the difference between total energy purchased (GWh of physical demand, including own generation) and the energy sold (GWh), within a given period.  Losses are expressed as a percentage of total energy purchased.  Losses in distribution arise from illegally tapped energy as well as technical failures. (2)Energy production is defined as total generation minus energy consumption and technical losses within our own power plants. (3)As a result of the creation of Endesa Brasil, Cachoeira Dourada became a subsidiary of Enersis as of October 2005.  As of the same date, Enersis also started to consolidate Endesa Fortaleza.  Ampla had generation facilities which were sold in 2006. (4)The differences in the 2008 figures of Chile compared to those reported in our 2008 Form 20‐F are explained by the consolidation of 50% of GasAtacama, a jointly controlled company, into Endesa Chiles financial statements due to the adoption of IFRS in January 2009, which requires proportional consolidation of the owned joint ventures. (5)   Values for year 2009 include the consolidation of 49.0% ofDistribuidora de Energía de Cundinamarca S.A.(DECA), a jointly-controlled company of Codensa, into Codensas financial statement, due to the adoption of IFRS in January 2009, which requires proportional consolidation of the owned joint ventures.  This consolidation also affects other 2009 figures such as capital expenditure, kilometers of concession area, transmission lines, sub-stations, transformers and employees.  The 2009 figure for electricity sold does not coincide with previously disclosed Company information, as the required data for DECA was not available at that earlier time.   11


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Exchange Rates  Fluctuations in the exchange rate between the peso and the dollar will affect the dollar equivalent of the peso price of our shares of common stock, without par value (the Shares or the Common Stock), on theBolsa de Comercio de Santiago(the Santiago Stock Exchange), theBolsa Electrónica de Chile(the Chilean Electronic Exchange) and theBolsa de Corredores de Valparaíso(the Valparaíso Stock Exchange) (collectively, the Chilean Exchanges).  These exchange rate fluctuations will likely affect the price of the Companys American Depositary Shares (ADSs) and the conversion of cash dividends relating to the Shares represented by ADSs from pesos to dollars.  In addition, to the extent financial liabilities of the Company are denominated in foreign currencies, exchange rate fluctuations may have a significant impact on earnings.  TheLey Orgánica del Banco Central de Chile18,840 (the Central Bank Act), provides that the Central Bank may require that certain purchases and sales of foreign currency be carried out in theMercado Cambiario Formal(the Formal Exchange Market), a market comprised of banks and other entities explicitly authorized by the Central Bank.  Purchases and sales of foreign currency, which can take place outside the Formal Exchange Market, can be carried out in theMercado Cambiario Informal(the Informal Exchange Market), which is a recognized currency market in Chile.  Free market forces drive both the Formal and Informal Exchange Markets.  Foreign currency for payments and distributions with respect to the ADSs may be purchased in either the Formal or the Informal Exchange Market, but such payments and distributions must be remitted through the Formal Exchange Market.  The Central Bank publishes daily thedólar observado(the Observed Exchange Rate), which is computed by taking the weighted average of the previous business days transactions in the Formal Exchange Market.  Since 1993, the Observed Exchange Rate and the Informal Exchange Rate have typically been within less than 1% of each other.  The Informal Exchange Rate means the average rate at which transactions are made in the Informal Exchange Market.  On December 31, 2009, the Informal Exchange Rate was Ch$ 507.45, or 0.07% higher than the published Observed Exchange Rate of Ch$ 507.10 per $ 1.00.  On May 31, 2010, the informal exchange rate was Ch$ 530.35 per $ 1.00, 0.05% lower than the Observed Exchange Rate corresponding to such date of Ch$ 530.62 per $ 1.00.  Unless otherwise indicated, amounts translated to dollars were calculated based on the exchange rates in effect as of December 31, 2009.  The following table sets forth, for the periods and dates indicated, certain information concerning the Observed Exchange Rate reported by the Central Bank.  Observed Exchange Rate(1)
(Ch$ per $)Year
     
     Low
     
     High
     
     Average(2)
     
     Period-
end2005
     
     509.70
     
     592.75
     
     558.06
     
     512.502006
     
     511.44
     
     549.63
     
     529.64
     
     532.392007
     
     493.14
     
     548.67
     
     521.06
     
     496.892008
     
     431.22
     
     676.75
     
     530.48
     
     636.452009
     
     491.09
     
     643.87
     
     554.22
     
     507.10
   12


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Monthly Observed Exchange Rate(1)
(Ch$ per $)Last six months
     
     Low
     
     High
     
     Average(2)
     
     Period-
end2009December
     
     495.51
     
     508.75
     
     
     
     507.102010January
     
     489.47
     
     531.75
     
     
     
     523.10February
     
     525.48
     
     546.18
     
     
     
     527.84March
     
     508.66
     
     533.87
     
     
     
     524.46April
     
     514.91
     
     527.38
     
     
     
     517.23May
     
     518.44
     
     549.17
     
     
     
     530.62
 
 Source: Chilean Central Bank. (1)Reflects pesos at historical values rather than in constant pesos. (2)The average of the exchange rates on the last day of each month during the period.  This is not applicable to monthly data.  B.            Capitalization and indebtedness.  Not applicable.  C.            Reasons for the offer and use of proceeds.  Not applicable.  D.            Risk factors.  South American economic fluctuations are likely to affect our results from operations.  All of our operations are located in five South American countries.  Accordingly, our consolidated revenues are sensitive to the performance of South American economies as a whole.  If local, regional or worldwide economic trends adversely affect the economy of any of the five countries in which we have investments or operations, our financial condition and results from operations could be adversely affected.  The South American financial and securities markets are, to varying degrees, influenced by economic and market conditions in other emerging market countries.  Although economic conditions are different in each country, investor reaction to developments in one country may have a significant effect on the securities of issuers in other countries, including Chile.  Chilean financial and securities markets may be adversely affected by events in other countries and such effects may affect the value of our securities.  Moreover, we have significant investments in relatively risky countries such as Argentina.  Generation and distribution of cash from such subsidiaries in these countries have proven to be volatile.  Our business is particularly dependent on the Chilean economy and our revenues are sensitive to its performance.  A substantial portion of our assets and operations are located in Chile and, accordingly, our financial condition and results of operations are to a certain extent dependent upon economic conditions prevailing in Chile.  In 2009, the Chilean GDP decreased by 1.5% compared to a 3.7% increase in 2008.  The latest Chilean Central Bank estimate for growth in 2010, is in the 4.25% - 5.25% range.  However, there is no assurance that such growth will be achieved, that the growth trend will be resumed in the future, or that future developments in the Chilean economy will not impair our ability to proceed with our strategic plans or adversely impact our financial condition or results of operations.  Our financial condition and results from operations could also be adversely affected by changes in economic or other policies of the Chilean government, which has exercised and continues to exercise a substantial influence over many aspects of the private sector.  In addition, our financial condition and results of operations could also be affected by other political or economic developments in Chile, a well as regulatory changes or administrative practices of Chilean authorities, over which we have no control.   13


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Certain South American economies have been characterized by frequent and occasionally drastic intervention by governmental authorities, which may adversely affect our business.  Governmental authorities have changed monetary, credit, tariff and other policies to influence the course of the economies of Argentina, Brazil, Colombia and Peru.  These governmental actions, intended to control inflation and affect other policies, have often involved wage, price and tariff rate controls as well as other interventionist measures, which in Argentina included freezing bank accounts and imposing capital restrictions in 2001, the nationalization of the private sector pension funds in 2008, and the use of Central Bank reserves of the Argentine Treasury in order to pay down indebtedness maturing in 2010. Changes in the policies of these governmental authorities with respect to tariff rates, exchange controls, regulations and taxation could adversely affect our business and financial results, as could inflation, devaluation, social instability and other political, economic or diplomatic developments, including the response by governments in the region to these circumstances.  If governmental authorities intervene materially in any of the countries in which we operate, it could cause our business to become less profitable, and our results from operations may be adversely affected.  Our electricity business is subject to risks arising from natural disasters,catastrophic accidents and acts of terrorismwhichcould adversely affect our operations, earnings and cash flow.  Our primary facilities include power plants, transmission and distribution assets, pipelines, LNG terminals and re‐gasification plants, storage and chartered LNG tankers.  Our facilities may be damaged by earthquakes, flooding, fires, other catastrophic disasters arising from natural or accidental human causes, as well as acts of terrorism.  For example, on February 27, 2010, Chile experienced a major earthquake measuring 8.8 on the Richter scale, followed by a tsunami.  Notwithstanding our insurance policies regarding these events, we could still experience severe business disruptions, significant decreases in revenues based on lower demand arising from catastrophic events, or significant additional costs to us not otherwise covered by business interruption insurance clauses.  There may be an important time lag between a major accident or catastrophic event and our definitive recovery from our insurance policies, which typically carry non‐recoverable deductible amounts, and in any event are subject to caps per event.  Some of these considerations, among others, could lead to an adverse effect on our operations, earnings and cash flow.  For information on the February 27, 2010 earthquake in Chile, please see Item 4.  Information on the CompanyA. History and Development of the Company. Recent Developments.  We are subject to refinancing risk and to debt covenants that could affect our liquidity.  As of December 31, 2009, our debt in financial terms was $ 8,224 million while, under accounting terms, it totaled $ 7,978 million.  These amounts differ since financial debt does not include accrued interest, which accounting debt includes, and considers other items that accounting debt does not include, such as derivatives mark to market effects.  Our financial debt had the following maturity timetable:  ·$ 1,313 million in 2010; ·$ 1,200 million in 2011; ·$ 4,451 million in the period 2012-2014; and ·$ 1,260 million thereafter.  Of the $ 1,313 million of financial debt maturing in 2010:  ·$ 369 million is in Chile; ·$ 123 million in Argentina; ·$ 478 million in Brazil; ·$ 242 million in Colombia; and ·$ 101 million in Peru.  Our debt agreements are subject to certain fairly standard debt to EBITDA and debt to equity financial covenant ratios, among others.  With IFRS adoption, all the financial covenants were amended, so as to leave the Company with approximately the same levels of covenant constraints as before the accounting standards change.  They also contain common affirmative and negative covenants, as well as events of default, and in some cases, mandatory prepayment events.   14


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As is customary for certain credit and capital market debt facilities, a significant portion of Enersis and Endesa Chiles financial indebtedness is subject to cross default provisions, with different definitions, criteria, materiality thresholds, and applicability as to the subsidiaries that could give rise to a cross default.  In the event that any of our cross default provisions are triggered and our existing creditors demand immediate repayment, a portion of our indebtedness could become due and payable.  For more information on covenants, cross default and relevant provisions for these credit facilities, see Item 5.  Operating and Financial Review and Prospects  B. Liquidity and Capital Resources.  We may be unable to refinance our indebtedness or obtain such refinancing on terms acceptable to us.  In the absence of such refinancing, we could be forced to dispose of assets in order to make up for any shortfall in the payments due on our indebtedness under circumstances that might not be favorable to obtaining the best price for such assets.  Furthermore, assets may not be sold quickly enough, or for amounts sufficient to enable us to make such payments.  As of the date of this report, Argentina continues to be the country with the highest refinancing risk.  As of December 31, 2009, the third-party financial debt of our Argentine subsidiaries amounted to $ 380 million.  As a matter of policy for all of our Argentine subsidiaries as long as fundamental issues concerning the electricity sector remain unresolved, we are rolling over our Argentine outstanding debt.  If our creditors do not continue to accept rolling over debt principal when it becomes due, we may be unable to refinance such indebtedness.  Since our generation business depends heavily on hydrological conditions, drought conditions may hurt our profitability.  Approximately 58% of our consolidated installed generation capacity is hydroelectric.  Accordingly, extreme hydrological conditions may affect our business and have an adverse effect on our results.  During periods of drought, thermal plants, such as ours that use natural gas, fuel oil or coal as a fuel are dispatched more frequently.  Our operating expenses increase during these periods, and depending on our commercial obligations, we may have to buy electricity from other generators in order to comply with our contractual supply obligations.  The cost of these electricity purchases in the spot market may exceed the price at which we sell contracted electricity, thus producing losses from those contracts.  Governmental regulations may impose additional operating costs which may reduce our profits.  We are subject to extensive regulation of tariffs and other aspects of our business in the five countries in which we operate, and these regulations may adversely affect our profitability.  In addition, changes in the regulatory framework, including changes that if adopted would significantly affect our operations, are often submitted to the legislators and administrative authorities in the countries in which we operate and could have a material adverse impact on our business.  For instance, in 2005 there was a change in the water rights law in Chile that requires us to pay for all the unused water rights.  The Chilean government can impose electricity rationing during drought conditions or prolonged failures in power facilities.  If, during rationing, we are unable to generate enough electricity to comply with our contractual obligations, we may be forced to buy electricity in the pool market at the spot price, since even a severe drought does not constitute aforce majeureevent.  The spot price may be significantly higher than our costs to generate the electricity and can be as high as the cost of failure set by the National Energy Commission, or the CNE.  This cost of failure, which is updated semiannually by the CNE, is a measurement of how much final users would pay for one extra MWh under rationing conditions.  If we are unable to buy enough electricity in the pool market to comply with all of our contractual obligations, then we would have to compensate our regulated customers for the electricity we failed to provide at the rationed price.  If material rationing policies are imposed by regulatory authorities in Chile, our business, financial condition and results from operations may be affected adversely in a material way.  Similarly, if material rationing policies are imposed by any regulatory authority as a result of adverse hydrological conditions in the other countries in which we operate, our business, financial condition and results from operations may be affected adversely in a material way.  Rationing periods may occur in the future and consequently, our generation subsidiaries may be required to pay regulatory penalties if such subsidiaries fail to provide adequate service under such conditions.   15


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Regulatory authorities may impose fines on our subsidiaries.  In Chile, our electricity businesses may be subject to regulatory fines for any breach of current regulations, including energy supply failure.  Such fines may range from 1Unidad Tributaria Mensual(UTM), or $ 73, to 10,000Unidades Tributarias Anuales(UTA), or $ 8.7 million, in each case using the UTM, UTA and foreign exchange rate as of December 31, 2009.  Any electricity company supervised by theSuperintendencia de Electricidad y Combustibles(Chilean Superintendence of Electricity and Fuels), or SEF, may be subject to these fines in cases where, in the opinion of the SEF, operational failures that affect the regular energy supply to the system are the fault of the company; for instance, when the coordination duty of the system agents is not fulfilled.  Our generation and distribution subsidiaries may be required to pay fines or to compensate customers if those subsidiaries are unable to deliver electricity to them even if such failure is due to forces outside of our control.  In 2004, the SEF imposed fines on Chilectra and Endesa Chile in the amount of UTA 1,830, or $ 1.6 million and UTA 2,030, or $ 1.8 million, respectively, due to a blackout that occurred in the Metropolitan Region in 2003.  As a result of an administrative resolution, Endesa Chiles fine has since been reduced to UTA 1,610, or $ 1.4 million.  In 2005, the SEF imposed fines of UTA 1,260, or $ 1.1 million, on Endesa Chile due to a blackout that occurred in the Metropolitan Region in 2003.  In February 17, 2009, the SEF imposed fines on Endesa Chile, Pehuenche and San Isidro for UTA 200, UTA 200 and UTA 100, respectively, or $ 0.4 million in total.  Also in 2009, the SEF fined Chilectra for UTA 2,000, or $ 1.7 million, due to billing management procedures challenged by our customers.  In June 2009, the SEF imposed fines on Chilectra in the amount of UTA 1,630, or $ 1.4 million, due to a blackout that occurred in the Metropolitan Region in 2004.  We are currently appealing all these fines, but these appeals may be unsuccessful.  We depend in part on payments from our subsidiaries and affiliates to meet our payment obligations.  We have no significant assets other than the stock of our subsidiaries.  In order to pay our obligations, we rely on cash from dividends, loans, interest payments, capital reductions and other distributions from our subsidiaries and equity affiliates, as well as cash from proceeds of the issuance of new securities.  Our ability to pay our obligations will depend on the receipt of distributions from our subsidiaries.  The ability of our subsidiaries and equity affiliates to pay dividends, interest payments, loans and other distributions to us is subject to legal constraints such as dividend restrictions, fiduciary duties, contractual limitations and foreign exchange controls that may be imposed in any of the five countries where they operate.  Historically, we have been able to access the cash flows of our Chilean subsidiaries, but we have not been similarly able to access at all times the cash flows of our non‐Chilean operating subsidiaries due to government regulations, strategic considerations, economic conditions and credit restrictions.  Our future results from operations outside Chile may continue to be subject to greater economic and political uncertainties than what we have experienced in Chile, thereby reducing the likelihood that we will be able to rely on cash flows from operations in those entities to repay our debt.  Dividend Limits and Other Legal Restrictions.Some of our non‐Chilean subsidiaries are subject to legal reserve requirements and other restrictions on dividend payments.  In addition, the ability of any of our subsidiaries which are not wholly owned to distribute cash to us may be limited by the fiduciary duties of the directors of such subsidiaries to their minority shareholders.  Furthermore, some of our subsidiaries may be forced by local authorities to diminish or eliminate dividend payments, such as the temporary restrictions for distributing dividends faced by our Argentine subsidiary, Edesur, during 2009. As a consequence of such restrictions, our subsidiaries could, under certain circumstances, be prevented from distributing cash to us.  Contractual Constraints.Distribution restrictions in our subsidiaries contractual agreements include the following:  prohibitions against dividend distributions by many companies in the case of default, and in the case of Pangue, Edegel, Fortaleza and Cien, if they are not in compliance with certain financial ratios; and prohibitions against dividend distributions, capital reductions, intercompany interest payments and debt repayment by Ampla and Coelce in Brazil, and Endesa Costanera and El Chocón in Argentina, in the case of default and if not in compliance with certain financial ratios.  Operating Results of Our Subsidiaries.The ability of our subsidiaries and equity affiliates to pay dividends or make loan payments or other distributions to us is limited by their operating results.  To the extent that the cash requirements at any of our subsidiaries exceed available cash, such subsidiary will not be able to make cash available to us.   16


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Foreign Currency Controls.The ability of our non-Chilean subsidiaries and equity affiliates to pay dividends and make loan payments or other distributions to us may be subject to restrictions that may be imposed by Central Banks or other governmental authorities in the various jurisdictions in which we operate.  For example, during the economic crisis of 2001, the Central Bank of Argentina imposed restrictions on the transfer of funds outside Argentina.  Foreign exchange risks may adversely affect our results, and the dollar value of dividends payable to ADS holders.  Most South American currencies in which we and our subsidiaries operate have been subject to large devaluations and appreciations against the dollar and may be subject to significant fluctuations in the future.  Historically, a significant portion of our consolidated indebtedness has been denominated in dollars and, although a substantial portion of our revenues are linked to dollars, we generally have been and will continue to be materially exposed to fluctuations of our local currencies against the dollar because of time lags and other limitations in the indexation of our tariffs to the dollar.  Because of this exposure the cash generated by our subsidiaries can be diminished materially when the local currencies devalue against the dollar.  Future volatility in the exchange rate of the currencies in which we receive revenues or incur expenditures, may affect our financial condition and results from operations.  For more information on the risks associated with foreign exchange rates, see Item 11.  Quantitative and Qualitative Disclosures About Market Risk.  As of December 31, 2009, using financial rather than accounting conventions, Enersis total consolidated financial debt was $ 8,224 million (net of currency hedging instruments).  Of this amount $ 2,357 million, or 29%, was denominated in dollars and $ 1,804 million in pesos.  In addition to the dollar and the peso, our foreign currency denominated consolidated indebtedness included the equivalent of:  ·$ 159 million in Argentine pesos; ·$ 1,847 million in reais; ·$ 2 million in Euro; ·$ 1,585 million in Colombian pesos; and ·$ 470 million in soles.  This totals an aggregate of $ 4,063 million in currencies other than dollars or pesos.  For the twelve‐month period ended December 31, 2009, our operating revenues amounted to $ 12,897 million (before consolidation adjustments) of which:  ·$ 750 million, or 6%, was denominated in dollars; and ·$ 2,436 million, or 19%, was linked in some way to the dollar.  In the aggregate, 25% of our operating revenues (before consolidation adjustments) was either denominated in dollars or linked to dollars through some form of indexation, while 18% were in pesos.  Revenues, before consolidation adjustments, in other currencies for the year ended December 31, 2009, included the equivalent of:  ·$ 1,124 million in Argentine pesos; ·$ 3,594 million in reais; ·$ 2,070 million in Colombian pesos; and ·$ 643 million in soles.  Despite the fact that we generate revenues and incur debt in these same currencies, we believe that we are subject to risk in terms of our foreign exchange exposure to these four currencies.  The most material case is that of our Argentine generation companies, where most of our debt is denominated in dollars while our revenues are mostly in Argentine pesos.  Furthermore, trading in the shares of our common stock underlying ADSs is conducted in pesos.  Our depositary bank will receive cash distributions that we make with respect to the shares underlying the ADSs in pesos.  The depositary bank will convert such pesos to dollars at the then-prevailing exchange rate to make dividend and other distribution payments in respect of ADSs.  If the peso depreciates against the dollar, the value of the ADSs and any dollar distributions ADS holders receive from the depositary bank will decrease.  17


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Construction of new facilities may be adversely affected by factors associated with these projects.  Factors that may adversely affect our ability to build new facilities include: delays in obtaining regulatory approvals, including environmental permits;  shortages or increases in the price of equipment, materials or labor; opposition by local or international political, environmental and ethnic groups; strikes; adverse changes in the political and regulatory environment in the five countries where we operate; adverse weather conditions, natural disasters, accidents or other unforeseen events; and the inability to obtain financing at affordable rates.  Any of these factors may cause delays in the completion of all or part of our capital investment program and may increase the cost of the projects.  We are involved in litigation proceedings.  We are currently involved in various litigation proceedings, which could result in unfavorable decisions or financial penalties against us, and we will continue to be subject to future litigation proceedings, which could have material adverse consequences to our business.  We are a party to a number of legal proceedings, some of which have been pending for several years.  Some of these claims may be resolved against us.  Our financial condition or results from operations could be adversely affected in a material way if certain material claims are resolved against us.  See Note 22.2 of our audited Consolidated Financial Statements.  The values of our subsidiaries long-term energy supply contracts are subject to fluctuations in the market prices of certain commodities.  We have economic exposure to fluctuations in the market prices of certain commodities as a result of the long‐term energy sales contracts we have entered into.  Our subsidiaries have material obligations under long‐term fixed-price electricity sales contracts, the values of which fluctuate with the market price of electricity.  In addition, we have material obligations as selling parties under long‐term energy supply contracts with prices that vary in accordance with the market price of electricity, which, in turn, depend on water levels in reservoirs, the market prices of commodities such as natural gas, fuel oil, coal and other energy-related products, as well as the dollar exchange rate.  Changes in the market price of these commodities and in the dollar exchange rate do not always correlate with changes in the market price of electricity or with our cost of production of electricity.  Accordingly, there may be times when the price paid to us under these contracts is less than our cost of production or acquisition of electricity.  We do not carry out transactions in commodity derivative instruments to manage our exposure to commodity price fluctuations.  For further discussion, please refer to Item 11 ‐Quantitative and Qualitative Disclosures about Market Risk ‐ Commodity Price Risk.  Our controlling shareholders may have conflicts of interest relating to our business.  Enel through a wholly-owned subsidiary owns 92.1% of Endesa Spain which owns 60.6% of Enersis share capital.  Our controlling shareholders have the power to determine the outcome of most material matters that require shareholders votes, such as the election of the majority of our board members and, subject to contractual and legal restrictions, the distribution of dividends.  Our controlling shareholders also can exercise influence over our operations and business strategy.  Their interests may in some cases differ from those of our other shareholders.  Enel and Endesa Spain conduct their business in South America through us as well as through entities in which we do not have an equity interest.  Environmental regulations in the countries in which we operate may increase our costs of operations.  Our operating subsidiaries are also subject to environmental regulations which, among other things, require us to perform environmental impact studies for future projects and obtain permits from both local and national regulators.  Approval of these environmental impact studies may be withheld by governmental authorities.  In addition, public opposition may cause delays or modifications to any proposed project and laws or regulations may change or be interpreted in a manner that could adversely affect our operations or our plans for companies in which we hold investments.  See Item 4.  Information on the Company  B. Business Overview  Electricity Industry Regulatory Framework.   18


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The relative illiquidity and volatility of Chilean securities markets could adversely affect the price of our common stock and ADSs.  Chilean securities markets are substantially smaller and less liquid than the major securities markets in the United States.  In addition, Chilean securities markets may be affected materially by developments in other emerging markets.  The low liquidity of the Chilean market may impair the ability of holders of ADSs to sell shares of our common stock withdrawn from the ADS program into the Chilean market in the amount and at the price and time they wish to do so.  Lawsuits against us brought outside of Chile or complaints against us based on foreign legal concepts may be unsuccessful.  All of our assets are located outside of the United States.  All of our directors and officers reside outside of the United States and most of their assets are located outside the United States as well.  If any shareholder were to bring a lawsuit against our directors, officers or experts in the United States, it may be difficult for them to effect service of legal process within the United States upon these persons or to enforce against them, in United States or Chilean courts, judgments obtained in United States courts based upon the civil liability provisions of the federal securities laws of the United States.  In addition, there is doubt as to whether an action could be brought successfully in Chile on the basis of liability based solely upon the civil liability provisions of the United States federal securities laws.  New share issuances might not have the rights granted by former Chapter XXVI.  The Chilean Central Bank Decision 1333‐01‐070510 adopted on May 10, 2007 extended the effects of the former Chapter XXVI to capital increases approved after April 18, 2001.  Under the former Chapter XXVI and the Foreign Investment Contracts, the Chilean Central Bank agreed to grant access to the formal exchange market to convert pesos into dollars (See Item 10.  Additional Information. D  Exchange Rate Controls for further detail).  Enersis formally requested permission from the Central Bank to enter into a new Foreign Investment Contract to include its capital increase approved by Enersis shareholders meeting held on March 31, 2003, which was granted by the Central Bank on September 7, 2007, subject to the execution and delivery of a new Foreign Investment Contract, dated September 24, 2008.  Nevertheless, the Central Banks approval, aimed at extending the effects of the former Chapter XXVI to the last capital increase of Enersis, is subject to the condition that Enersis previously inform the Central Bank with respect to the measures adopted in the issuance of new shares of a future capital increase in order to sufficiently differentiate new shares from the shares issued previously, under the former Chapter XXVI, so that the shareholders would have the necessary information to learn about such difference.  If Enersis does not comply with this condition, the Central Bank could revoke its approval and the benefits granted to the shares issued in the last capital increase of Enersis by the former Chapter XXVI.  Furthermore, it is not certain that additional Chilean restrictions applicable to the holders of ADRs, the disposition of underlying shares of common stock or the repatriation of the proceeds from such disposition will not be imposed in the future, nor can there be any assessment of the duration or impact of such restrictions if imposed.  Item 4.   Information on the Company  A.            History and Development of the Company.  History  Enersis was originally organized asCompañía Chilena Metropolitana de Distribución EléctricaS.A., as recorded in a public deed on June 19, 1981.  The existence of our company was authorized, and its bylaws were approved, pursuant to Resolution 409-S on July 17, 1981, issued by the Chilean SVS.  The bylaws have been amended subsequently.  The existence of our company under its current name, ENERSIS S.A., or Enersis, dates back to August 1, 1988.  Enersis is a publicly held limited liability stock company domiciled in Santiago, Chile, and operates under Chilean law and regulations.  Main office:
     Santa Rosa 76, Santiago, Código Postal 8330099, Chile.Telephone:
     (562) 353-4400Fax:
     (562) 378-4788Web Site:
     www.enersis.cl
    19


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The Companys authorized representative in the United States of America is Puglisi & Associates, whose contact information is:  Main office:
     850 Library Avenue, Suite 204, Newark, DelawareTelephone:
     (302) 738-6680Fax:
     (302) 738-7210
  We are an electric utility company engaged through our subsidiaries and affiliates in the generation, transmission and distribution of electricity in Chile, Argentina, Brazil, Colombia and Peru.  We are one of the largest private companies in the electricity sector in South America.  We trace our origin toCompañía Chilena de Electricidad Ltda., or CCE, which was formed in 1921 as a result of the merger of Chilean Electric Tramway and Light Co., founded in 1889, andCompañía Nacional de Fuerza Eléctrica, with operations dating back to 1919.  In 1970, the Chilean government nationalized CCE.  In 1981, CCEs operations were divided into one generation company, the current AES Gener S.A.(Gener), and two distribution companies, one with a concession in the Valparaíso Region, the currentChilquinta S.A., and the other with a concession in the Santiago Metropolitan Region,Compañía Chilena Metropolitana de Distribución Eléctrica S.A.From 1982 to 1987, the Chilean electric utility sector went through a process of re-privatization.  On August 1, 1988,Compañía Chilena Metropolitana de Distribución Eléctrica S.A.changed its name to ENERSIS S.A. and became the new parent company ofDistribuidora Chilectra Metropolitana S.A., later renamed Chilectra S.A.In the 1990s, we diversified into electricity generation and transmission through our increasing equity stakes in Endesa Chile.  We began our international operations with the 1992 investment in Edesur, an Argentine electricity distribution company.  We then expanded primarily into electricity generation, transmission and distribution businesses in four South American countries: Argentina, Brazil, Colombia and Peru.  We remain focused on the electricity sector, although we also have small operations in other businesses.  In 2005, Endesa Brasil was formed as a company to manage all generation, transmission and distribution assets that Endesa Latinoamérica S.A.U., or Endesa Latinoamérica, (formerly known as Endesa Internacional, a subsidiary of Endesa Spain), Enersis, Endesa Chile and Chilectra held in Brazil, namely, through Ampla, Endesa Fortaleza, Investluz, CIEN, Cachoeira Dourada and Coelce.  Enersis began consolidating Endesa Brasil in October 2005.  In 2006, the International Finance Corporation (IFC) became a new shareholder in Endesa Brasil, contributing $ 50 million or a 2.7% share of capital of Endesa Brasil.  As of December 31, 2009, Enersis directly and indirectly controlled 54.3% of Endesa Brasils share capital.  In order to optimize taxes, simplify the organizational structure and diminish corporate costs, on April 2006, Enersis decided to merge Elesur S.A. (Elesur), a virtually wholly-owned subsidiary, and Chilectra in Chile.  As a consequence of this merger, Elesur absorbed Chilectra; the surviving company retained the name of Chilectra.  In order to achieve synergies in Peru, in 2006, we conducted the merger of Edegel and Etevensa (60% owned by Endesa Spain), which was a 457 MW thermoelectric generation company.  In September 2007, we merged our subsidiaries in Colombia, Emgesa and Betania, resulting in a new company which retained the name Emgesa.  Following the merger, as of December 31, 2009, Enersis indirectly controlled 16.1% of Emgesas share capital.  Due to a shareholders agreement, we control Emgesa through Endesa Chile.  In February 2009, Codensa, our Colombian distribution subsidiary, acquired approximately 49% ofDistribuidora de Energía de Cundinamarca S.A.,or DECA, for Ch$ 23.7 billion.  The remaining 51% was acquired byEmpresa Eléctrica de Bogotá(EEB).  Codensa and EEB jointly control DECA.  On March 13, 2009, DECA acquired 82.3% ofEmpresa Eléctrica de Cundinamarca S.A., a Colombian distribution company, for Ch$ 48.5 billion.  On March 26, 2007, Spanish company Acciona, S.A. (Acciona) and Italian company Enel, executed an agreement for the joint management of Spanish company, Endesa Spain.  The latter, through its Spanish subsidiary Endesa Latinoamérica, holds 60.6% of the share capital of Enersis.  On February 20, 2009, Acciona and Enel reached an agreement whereby Acciona would transfer directly and indirectly to Enel Energy Europe S.L., wholly owned by Enel, its 25.0% shareholding in Endesa Spain, subject to certain conditions, which were subsequently met.  In accordance with the agreement, Enel paid Acciona  9,627 million.  The amount was determined by subtracting the dividends distributed by Endesa Spain and received by Acciona after February 20, 2009 ( 1,561 million) from the cash consideration of the agreement established on that same date ( 11,107 million) and adding interest accrued as from the agreement date ( 81 million).  On June 25, 2009, the shares were transferred, making Enel the ultimate controller of Enersis by virtue of its 92.1% shareholding in Endesa Spain.  This transaction was reported to the Spanish National Securities Market Commission (CNMV in its Spanish acronym) as material information on the same date.  In addition, during 2009, Endesa Spain transferred to Acciona certain wind and hydroelectric energy generation assets in Spain and Portugal priced at  2,814 million.   20


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In October 2009, Endesa Chile purchased an additional 29.4% of Edegel from Generalima, a Peruvian indirect subsidiary of Endesa Spain.  With this transaction, Endesa Chile increased its economic interest in Edegel to 62.5%. In the same month, Enersis acquired an additional 24% of the share capital of our Peruvian subsidiary Edelnor, increasing our direct and indirect ownership stake in Edelnor from 33.5% to 57.5%.  As of December 31, 2009 we had 14,851 MW of installed capacity with 56 power plants in the five countries in which we operate, 12.9 million distribution customers covering 45 million inhabitants, consolidated assets of $ 26.1 billion and our operating revenues were $ 12.7 billion.  Recent Developments  On January 28, 2010 Enersis and Endesa Chile held four bondholder meetings for our Chilean bonds denominated in UF, with the purpose of carrying out certain proposed amendments.  The bondholders approved the amendments, which dealt with both technical adjustments for setting the proper financial covenants as a consequence of the adoption of IFRS on January 1, 2009, as well as new borrower‐friendly language on certain cross acceleration and bankruptcy/insolvency clauses.  After giving legal effect to such amendments on March 10, 2010, all series of our Chilean bonds reference only the borrower, and no longer reference any of our subsidiaries in Chile and abroad, in these Event of Default provisions.  On February 27, 2010, Chile experienced a major earthquake measuring 8.8 on the Richter scale, in the Bío-Bío Region, followed by a tsunami.  As a consequence, few of our facilities were affected, and the Company did not suffer any casualty.  Our generation thermal plants Bocamina I (128 MW) and Bocamina II (370 MW, still under construction), which are located near the epicenter, presented some structural damages, causing the interruption of operations in the former plant and an expected delay in the construction on the latter.  Bocamina I represents 2% of our generating capacity in Chile.  The rest of our generating facilities in the country were impacted within the limits of the original design, and there was no discontinuity in their normal operations.  In our distribution business centered in Santiago, 24 hours after the earthquake, service was reinstated to 77% of our Chilectra customers and it took nine days to reach a 99.9% coverage.  Damages suffered by some of our customers affected our business, due to the impact on electricity demand. Also some suppliers (such as Transelec, a transmission company not owned by us) experienced difficulties in their facilities, with negative effects on our capacity to effectively deliver electricity to our clients. We have insurance policies which provide us coverage (while in compliance with our property policy), including property damages, business interruptions and contingent business interruptions (i.e., attributable to our customers and/or suppliers). In the case of Bocamina II, we also have insurance for the construction phase of our projects, covering damages and advance loss of profits for up to two years.  All these insurance policies have their customary deductibles.  There may be an important time lag until we finally receive total compensation.  For additional information, see  D. Property Plants and Equipment.  Capital Investment Program  We coordinate the overall financing strategy of our subsidiaries and intercompany advances to optimize debt management as well as the terms and conditions of our financing.  Our operating subsidiaries independently plan capital expenditure financed by internally generated funds or direct financings.  One of our goals is to focus on investments that will provide long-term benefits, such as energy loss reduction projects.  Additionally, by focusing on Enersis as a whole and seeking to provide services across the group of companies, we are aiming to reduce the level of investment necessary at the individual subsidiary level in items such as procurement, telecommunication and information systems.  Although we have considered how these investments will be financed as part of the Companys budget process, we have not committed to any particular financial structure, and investments will depend on the market conditions at the time the cash flows are needed.  Our investment plan is flexible enough so as to adapt to changing circumstances by giving different priorities to each project in accordance with profitability and strategic fit.  Investment priorities are currently focused on developing the capacity plan in Chile and Colombia, so as to guarantee adequate levels of quality of supply and manage environmental issues.   21


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For the period between 2010 and 2014, we expect to make capital expenditures of Ch$ 3,022 billion in our majority‐owned subsidiaries.  The table below sets forth the capital expenditures made by our subsidiaries in 2008 and 2009 and the expected capital expenditures for the 2010-2014 period.  Capital Expenditure (1)(in million of Ch$)2008
     
     2009
     
     2010-2014Electricity Generation/Transmission
     
     363,698
     
     395,107
     
     1,280,430Electricity Distribution
     
     504,040
     
     394,099
     
     1,706,847Other Businesses
     
     8,980
     
     12,108
     
     34,664Total
     
     876,718
     
     801,314
     
     3,021,940
 
 (1)Capex figures represent accrued investments for each year, except for future projections.  Electricity Generation  Investments in Chile  Reinforcing our commitment with sustainability and with our non-conventional renewable energy (NCRE) project development initiatives, and following the commercial start-up of the Canela 18 MW wind farm in December 2007, our subsidiary Endesa Eco completed the commissioning of 40 wind generators of the wind farm Canela II on November 25, 2009, thereby adding 60 MW of new capacity in theSistema Interconectado Central(SIC), the Central Interconnected System, with an investment of approximately $ 150 million.  Commercial operations started on December 11, 2009.  With respect to the Quintero LNG project, in which Endesa Chile holds a 20% stake in the re-gasification terminal, the Early Gas phase started commercial operations on September 12, 2009, requiring the presence in port of the tanker to operate the re-gasification plant.  This re-gasification plant is already operating in a fast-track mode, and plans to be fully operational in its total storage capacity in August 2010.  Total investment for this project is approximately $ 1.1 billion.  On June 20, 2009, the first unit of the Quintero thermal-plant project, which Endesa Chile built in the Valparaíso Region, successfully made its first synchronization with the SIC, beginning its commercial operations on July 23, 2009.  The second unit successfully made its synchronization with the SIC on August 28, 2009, and has been in commercial operations since September 4, 2009.  This project, located on a site alongside the Quintero re-gasification plant, has a declared capacity of 257 MW, and will operate with either natural gas or diesel oil.  Total investment was approximately $ 140 million.  Works continue for the construction of the Bocamina II coal-fired plant in Coronel, in the Bío-Bío Region.  With a capacity of 370 MW, it will be equipped with the latest emission-reduction technologies, reaching an estimated investment of $ 750 million.  The start-up is expected for June 2011.  Investments in Argentina  In Argentina, Endesa Chile, through its subsidiaries Endesa Costanera S.A. and Hidroeléctrica El Chocón S.A., carried out investments between 2004 and 2007 in theFondo Para Inversiones Necesarias Que Permitan Incrementar La Oferta De Energía Eléctrica En El Mercado Eléctrico Mayorista(Foninvemem), which translated into a 21% shareholding inTermoeléctrica José de San Martín S.A.(San Martín) andTermoeléctrica Manuel Belgrano S.A.(Manuel Belgrano), corresponding to two 800 MW combined-cycle plants.  Both plants started operating in open cycle during 2008.  The closing of the cycles (combined-cycle operation) took place in January 2010 in the case of the Manuel Belgrano plant and in February 2010 in the case of the San Martín plant.  Investments in Colombia  Following the conclusion of the Firm Energy Obligation process (see  B. Business OverviewElectricity Industry Regulatory Framework) for the projects which start operations between December 2014 and November 2019, in June 2009, the Colombian Ministry of Mines and Energy chose Emgesas El Quimbo hydroelectric project, with a capacity of 400 MW.  In line with the projects schedule, the principal civil works and equipment supply and assembly contracts are currently in their tender processes, in order to estimate the required investment.   22


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Investments in Peru  In January 2008 Edegel signed a turnkey contract with Siemens Power Generation for the installation of a 189 MW turbine at the Santa Rosa plant, to operate with natural gas from Camisea.  On September 2, 2009, the turbine started its commercial operations with a capacity of 193 MW, with an investment of approximately $ 90 million.  On November 28, 2009, an increase of 7 MW was recognized, reaching a total capacity of 200 MW, allowing Edegel to increase its installed capacity to 1,667 MW, thereby enabling it to meet the Peruvian market demand growth.  Also, in October 2009, Endesa Chile purchased a 29.4% stake of Edegel for $ 375 million.  With this transaction, Endesa Chile increased its economic interest in Edegel from 33.1% to 62.5%.  Electricity Distribution  Our distribution business in Chile, Argentina, Brazil, Colombia and Peru is carried out by our subsidiaries listed in the table below.  In 2009, we incurred total capital expenditures of Ch$ 394 billion, principally to better service demographic growth and new clients, as well as to reduce energy losses.  InChile, during 2009, Chilectra made progress on its investment plan for meeting the growth in energy demand and providing an increasingly reliable service to all its customers, as well as supporting service quality, safety and loss-prevention projects. The company continued with the tension change from 12 kV to 23 kV, incorporating a capacity of 24 MVA in medium tension. High-tension networks were also reinforced with a high-capacity conductor such as the 110 kV El Salto-San Cristóbal line of the sub-transmission system.  Chilectra also continued to develop its intelligent networks plan which integrates electricity infrastructure with new electronic technologies, information systems and communications.  InArgentina, during 2009, Edesur carried out important electricity infrastructure works including the increase in capacity of Perito Moreno substation, a mobile substation in Bosques substation, and the renovation and/or installation of many kilometers of electricity networks and medium and low-tension transformers.  Regarding the expansion of the Perito Moreno substation, in order to provide a solution to the problem of meeting demand in the southeast of the Capital Federal, the project contemplated the expansion of 2x40 MVA  132/13.2 kV to 3x40 MVA  132/13.2 kV. These works began in 2008 and their completion and start-up occurred in 2009.  Also important was the installation of a new mobile substation at Bosques, in order to meet the high demand growth in the Greater Buenos Aires districts of Berazategui, Hudson, Gutiérrez, Bosques, Florencio Varela and El Pato. The project consisted of connecting a mobile substation within the site of the Bosques substation and incorporating five new medium‐tension feeders.  In order to sustain the operative reliability of the network, two 220 kV switches have been replaced at the Costanera substation and three 132 kV at the Perito Moreno substation, as well as installing/renovating considerable distances in electricity networks, medium/low tension transformers and monophase and three-phase meters.  In all such cases, this is new equipment with the latest technology and optimum performance.  In the case ofBrazilin 2009, investment was concentrated on projects for reducing losses and improving the quality of the distribution network.  Important improvements have been achieved in both in recent years, although the results in 2009 were affected by the global crisis and certain effects that impacted the supply service, with the consequent worsening of the quality indicators.  Regarding the quality of service, the DEC (fault duration) and FEC (fault frequency) indicators since 2003 have improved substantially, showing the effectiveness of the investments made by the company in these matters. However, in 2009, these indicators were affected by an event outside the companys control.  In November 2009, a blackout occurred in the Brazilian electricity grid as a result of high-tension transmission line problems.  This affected 60 million people and generated a total loss of load of 28,800 MW.   23


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The Ampla loss indicator was also affected by non-manageable external factors, such as the prohibition on billing new customers with electronic meters and the lower production of the industrial sector due to the global economic crisis, which caused an increase in the indicator of 1 percentage point with respect to 2008, from 20.2% to 21.2%.  Coelce connected 117,000 new customers to the low-tension electricity network, with an implied investment of R$ 62.7 million ($ 36 million as of December 31, 2009).  Maintaining its target of continuing to improve the quality of service and reliability of the system, various investments amounting to R$ 60.1 million ($ 34.5 million as of December 31, 2009) were made in the low, medium and high-tension electricity systems, in order to provide better stability for the growth experienced in recent years.  The agreement signed between the federal government, Coelce and the state government for the Light for Everyone project (for serving and supplying energy to consumer units located in the rural area), continued in 2009, as a result of which 20,410 new customers were connected.  During 2010, projects regarding the control of illegally tapped energy will continue, specifically the Loss Plan in Ampla.  On the other hand, Coelce will continue collaborating with the Light for Everyone project.  InColombiain 2009, through Codensa, investments were mainly directed to expansion projects for servicing new customers and growth in demand, and for incorporating equipment and renovating distribution networks in order to continue improving the continuity and quality of energy supplies.  In particular, in the technical area, investments for a total amount of Col$ 220,054 million ($108 million as of December 31, 2009) were made in order to service centers of demand growth, normalize the high and medium-tension infrastructure, and improve the service quality and reliability indicators of the distribution system.  The principal investments were made:  ·To meet the energy demand in the urban, savanna and rural areas for 61,412 new customers, with an additional 40 MVA installed to meet demand in the northwestern districts of Bogotá, together with the construction and remodeling of the associated medium-tension networks.  ·To improve service quality and reliability and ensure capacity to meet demand in the industrial and business zone of the Medellín Highway corridor, 42.5 MVA were installed and the medium-tension network was extended.  ·The modernization of the Calle Primera substation with GIS technology was completed, with an installed capacity of 60 MVA and the normalization of the high transmission lines in addition to the medium-tension networks. We also invested in the normalization of the high-transmission infrastructure in ten substations and the renovation of several kilometers of the high-transmission network.  ·Distribution transformers were replaced and the low-tension network in the urban zone renovated.  Twenty substations were also integrated into the control center system and 13 medium-tension substations were adapted.  InPeruin 2009, Edelnor carried out an investment program focused mainly on the expansion and reinforcement of low and medium-tension networks, plus the expansion of capacity in medium and low-tension feeders and the increase in capacity of the transforming substations.  According to the secondary transmission investment plan, prepared together with the regulator, Osinergmin, the beginning of the construction of the new Zárate and UNI substations, plus the expansion of capacity at other substations were carried out in 2009.  The Peruvian company also continued to improve attention and electrification for new human-settlement projects, and also for reducing commercial losses and improving street lighting and infrastructure of customer service centers.  On October 2009, we acquired an additional 24% of the share capital of Edelnor, increasing our direct and indirect ownership stake from 33.5% to 57.5%.   24


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B.            Business Overview.  We are a publicly held limited liability stock company with consolidated operations in Chile, Argentina, Brazil, Colombia and Peru.  Our core business is electricity generation, transmission and distribution.  We also participate in other activities which are not part of our core business.  Since these activities represent less than 1% of our 2009 operating income, we do not report them as a separate business segment for purposes of this discussion, or under IFRS.  Information relating to operating revenue by business segment is set forth in Note 35 to our Consolidated Financial Statements.  Electricity Generation Business Segment  As of December 31, 2009, electricity generation represented 42% of our operating revenues and 61% of our operating income, in both cases before consolidation adjustments.  Our consolidated physical sales for 2009 were 66,728 GWh and our production was 58,349 GWh, 3.4% and 3.9% higher than in 2008, respectively.  The total installed capacity in 2009 was 14,851 MW as compared to 14,284 MW in 2008.  Our electricity generation business is conducted primarily through Endesa Chile, which has operating subsidiaries in Chile, Argentina, Colombia and Peru.  Since October 2005, the generation, transmission and distribution business in Brazil has been managed through our subsidiary, Endesa Brasil.  Endesa Chile also holds an equity interest in Endesa Brasil.  The following tables summarize the information relating to Enersis electricity generation:  Physical Data per Country  As of December 31, each year2007
     
     2008 (4)
     
     2009ChileNumber of generating facilities (1) (5)
     
     25
     
     27
     
     29Installed capacity (MW) (2) (5)
     
     4,779
     
     5,283
     
     5,650Energy generated (GWh) (3)
     
     18,773
     
     21,267
     
     22,239Energy sales (GWh)
     
     19,212
     
     21,532
     
     22,327ArgentinaNumber of generating facilities (1)
     
     5
     
     5
     
     5Installed capacity (MW) (2)
     
     3,644
     
     3,652
     
     3,652Energy generated (GWh) (3)
     
     12,117
     
     10,480
     
     11,955Energy sales (GWh)
     
     12,406
     
     11,098
     
     12,405BrazilNumber of generating facilities (1)
     
     2
     
     2
     
     2Installed capacity (MW) (2)
     
     987
     
     987
     
     987Energy generated (GWh) (3)
     
     3,954
     
     3,379
     
     3,319Energy sales (GWh)
     
     7,349
     
     7,093
     
     6,869ColombiaNumber of generating facilities (1)
     
     11
     
     11
     
     11Installed capacity (MW) (2)
     
     2,829
     
     2,895
     
     2,895Energy generated (GWh) (3)
     
     11,942
     
     12,905
     
     12,674Energy sales (GWh)
     
     15,613
     
     16,368
     
     16,806PeruNumber of generating facilities (1) (5)
     
     9
     
     9
     
     9Installed capacity (MW) (2) (5)
     
     1,468
     
     1,467
     
     1,667Energy generated (GWh) (3)
     
     7,654
     
     8,102
     
     8,163Energy sales (GWh)
     
     7,994
     
     8,461
     
     8,321TotalNumber of generating facilities (1)
     
     52
     
     54
     
     56Installed capacity (MW) (2)
     
     13,707
     
     14,284
     
     14,851Energy generated (GWh) (3)
     
     54,440
     
     56,133
     
     58,349Energy sales (GWh)
     
     62,574
     
     64,552
     
     66,728
  (1)For details on generation facilities, see  D. Property Plants and Equipment. (2)Total installed capacity is defined as the maximum MW capacity of generation units, under specific technical conditions and characteristics, in most cases confirmed by satisfaction guarantee tests performed by equipment suppliers certified by Bureau Veritas, an international independent certification company.  Figures may differ from installed capacity declared to regulating authorities and customers in each country, according to criteria defined by each authority and corresponding contractual frameworks. We have not restated capacities based on this certification. (3)Energy generated defined as total generation minus own power plant consumption and technical losses. (4)  The differences in the 2008 figures of Chile compared to those reported in our 2008 Form 20-F are explained by the consolidation of the 50% of GasAtacama, a jointly controlled company, into Endesa Chiles financial statements due to the adoption of IFRS in January 2009, which requires proportional consolidation of the owned joint ventures.  This change also explains differences in other 2008 figures such as physical sales, generation, purchases, installed capacity, main customers and number of power plants. (5)San Isidro 2, Palmucho and Canelas generation in Chile consolidated since April, November and December 2007, respectively; Quintero and Canela II generation in Chile consolidated since July and December 2009, respectively; Santa Rosa TG8s generation in Peru consolidated since November 2009. 25


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In the electricity industry, it is common to segment the business into hydroelectric and thermoelectric generation, because each method of generation has different variable costs.  Thermoelectric generation requires the purchase of fuel rather than the use of water from reservoirs or rivers, thereby increasing the variable costs of generation.  Of our total consolidated generation, 65% was from hydroelectric sources, 35% came from thermal sources, and wind energy represented less than 1%.  The following table summarizes Enersis consolidated generation by type of energy:  Year ended December 31,2007
     
     2008 (1)
     
     2009(GWh)
     
     %
     
     (GWh)
     
     %
     
     GWh
     
     %Hydroelectric
     
     36,575
     
     67.0
     
     35,605
     
     63.5
     
     37,693
     
     64.6Thermal
     
     17,862
     
     33.0
     
     20,479
     
     36.5
     
     20,563
     
     35.2Other generation (2)
     
     3
     
     0
     
     49
     
     0.1
     
     94
     
     0.2Total generation
     
     54,440
     
     100.0
     
     56,133
     
     100.0
     
     58,349
     
     100.0
 
 (1)The difference in the values reported in our 2008 Form 20-F is explained by the incorporation of the mini hydroOjos de Aguainto the item Other generation and the consolidation of GasAtacama. (2)Other generation refers to the generation of our subsidiary Endesa Eco (Renewable energy: mini hydroOjos de Aguaand wind farm Canela and Canela II).  In general, in the countries in which we operate, the potential for contracting electricity is related to the volume of electricity demand.  Customers identified as small volume-regulated customers, such as residential customers subject to government regulated electricity tariffs, must purchase electricity directly from a distribution company.  These distribution companies, which purchase large amounts of electricity for small residential customers, generally enter into contractual agreements with generators at a regulated tariff price.  Those identified as large volume industrial customers also enter into contractual agreements with energy suppliers.  However, such large volume industrial customers are not subject to the regulated tariff price.  Instead, these customers are allowed to negotiate the price of energy with generators based on the characteristics of the service required.  Finally, the market pool, where energy is normally sold at the spot price, is not carried out through contractual agreements, but instead complies with pool market operations.    26


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The following table contains information regarding our subsidiary Endesa Chiles consolidated sales of electricity by type of customer for each of the periods indicated:
 ENDESA CHILE CONSOLIDATED PHYSICAL SALES BY TYPE OF CUSTOMER (GWh)  Year ended December 31,2007
     
     2008
     
     2009Sales
(GWh)
     
     % of Sales 
Volume
     
     Sales
(GWh)
     
     % of Sales
 Volume
     
     Sales
(GWh)
     
     % of Sales 
VolumeRegulated customers
     
     22,881
     
     41.4
     
     24,479
     
     42.6
     
     25,517
     
     42.6Unregulated customers
     
     14,374
     
     26.0
     
     15,512
     
     27.0
     
     14,280
     
     23.9Electricity pool market sales
     
     17,970
     
     32.5
     
     17,467
     
     30.4
     
     20,062
     
     33.5Total electricity sales
     
     55,225
     
     100.0
     
     57,458
     
     100.0
     
     59,859
     
     100.0
  The specific energy consumption limit (measured in GWh) for regulated and unregulated customers is country specific.  Moreover, regulatory frameworks often require that regulated distribution companies have contracts to support their commitments to small customers and also determine which customers can purchase energy in electricity pool markets.  The following table contains information regarding Endesa Chiles physical sales of electricity per customer segment:  ENDESA CHILE CONSOLIDATED PHYSICAL SALES PER CUSTOMER PRICE SEGMENT (GWh)  Year ended December 31,2007
     
     2008
     
     2009Sales
(GWh)
     
     % of
Sales
Volume
     
     Sales
(GWh)
     
     % of
Sales
Volume
     
     Sales
(GWh)
     
     % of
Sales
VolumeContracted sales (1)
     
     37,255
     
     67.5
     
     39,991
     
     69.6
     
     39,797
     
     66.5Non-contracted sales
     
     17,970
     
     32.5
     
     17,467
     
     30.4
     
     20,062
     
     33.5Total electricity sales
     
     55,225
     
     100.0
     
     57,458
     
     100.0
     
     59,859
     
     100.0
 
 (1)Includes the sales to distribution companies not backed by contracts in Chile and Peru.  Generation in Chile  We accounted for 42% of Chiles physical sales, 39% of generation and 40% of total installed capacity, as of December 31, 2009, measured by the maximum capacity calculated by theCentro de Despacho Económico de Cargaof both interconnected systems (CDECs).  Our hydroelectric installed capacity represents 61% of our total installed capacity in Chile.  We own and operate, through our subsidiary, Endesa Chile, 29 generation facilities in Chile with an aggregate installed capacity of 5,650 MW as of December 31, 2009, compared to 5,283 MW in 2008.  The most important increases in our total installed capacity in Chile were mainly due to the start-up of commercial operations of the LNG terminal; the incorporation of Quintero (257 MW, thermal) in September 2009; and the increase in the installed capacity of San Isidro 2 (from 353 to 399 MW) in December 2009.  Also, the incorporation of Canela II (60 MW, wind farm) in December 2009 contributed to the increased capacity.  The following table sets forth the installed generation capacity for each of the Companys Chilean subsidiaries:  INSTALLED CAPACITY PER SUBSIDIARY IN CHILE (MW) (1)  2007
     
     2008
     
     2009Endesa Chile
     
     3,034
     
     3,139
     
     3,446Pehuenche
     
     699
     
     699
     
     699Pangue
     
     467
     
     467
     
     467San Isidro
     
     379
     
     379
     
     379Celta
     
     182
     
     182
     
     182GasAtacama
     
     ‐
     
     390
     
     390Endesa Eco
     
     18
     
     27
     
     87Total
     
     4,779
     
     5,283
     
     5,650
 
 (1)The installed capacity was certified by Bureau Veritas.   27


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Our total electricity generation in Chile (in both the SIC and the SING) reached 22,239 GWh in 2009, 4.6% higher than in 2008, and accounted for approximately 39.1% of total electricity production in Chile during 2009.  The following table sets forth the electricity generation for each of our Chilean subsidiaries:  ELECTRICITY GENERATION IN CHILE (GWh)  Year ended December 31,2007
     
     2008
     
     2009Endesa Chile
     
     11,093
     
     12,204
     
     12,265Pehuenche
     
     3,437
     
     3,589
     
     3,613Pangue
     
     1,351
     
     1,763
     
     2,113San Isidro
     
     1,956
     
     1,289
     
     1,616Celta
     
     933
     
     912
     
     981GasAtacama
     
     ‐
     
     1,460
     
     1,558Endesa Eco
     
     3
     
     49
     
     94Total
     
     18,773
     
     21,267
     
     22,239
   Hydroelectric generation in 2009 was 7.7% higher than in 2008.  The potential energy in reservoirs at December 31, 2009 was 2% higher than at December 31, 2008, as shown in the following table.  Year ended December 31,2008
     
     2009(GWh)
     
     (GWh)
     
     % ChangeReservoirLaja
     
     3,107
     
     3,045
     
     -2Maule
     
     1,111
     
     957
     
     -14Colbún
     
     406
     
     485
     
     19Ralco
     
     398
     
     484
     
     22Chapo
     
     266
     
     372
     
     40Invernada
     
     296
     
     314
     
     6Rapel
     
     60
     
     76
     
     26Melado
     
     9
     
     13
     
     44Total
     
     5,652
     
     5,746
     
     2
  Hydroelectric generation accounted for 66.7% of our total electricity generation in 2009 compared with the 64.7% of 2008.  Generation by type in Chile is shown in the following table:  OUR GENERATION IN CHILE (GWh)  Year ended December 31,2007
     
     2008(1)
     
     2009Generation
(GWh)
     
     %
     
     Generation
(GWh)
     
     %
     
     Generation
(GWh)
     
     %Hydroelectric generation
     
     13,179
     
     70.2
     
     13,765
     
     64.8
     
     14,826
     
     66.7Thermal generation
     
     5,591
     
     29.8
     
     7,453
     
     35.0
     
     7,319
     
     32.9Other generation (2)
     
     3
     
     0.0
     
     49
     
     0.1
     
     94
     
     0.4Total generation
     
     18,773
     
     100.0
     
     21,267
     
     100.0
     
     22,239
     
     100.0
 
 (1)The differences in the generation of 2008 compared to last years Form 20-F are explained by the incorporation of the mini hydro Ojos de Agua into the item Other generation and also to the consolidation of 50% of GasAtacama as previously explained in this report. (2)Other generation refers to the generation of our subsidiary Endesa Eco (Renewable energy: mini hydro Ojos de Agua and wind farms Canela and Canela II)   28


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Our thermal electric generation facilities are either gas, LNG, coal or oil-fired.  In order to satisfy our natural gas and transportation requirements, we enter into long-term gas contracts with suppliers who establish maximum supply amounts and prices and long-term gas transportation agreements with the pipeline companies, currently Gas Andes and Electrogas (the latter a related company of Endesa Chile).  Since March 2008, all of Endesa Chiles natural gas units can operate with natural gas and diesel and since December 2009, San Isidro, San Isidro 2 and Quintero can operate with LNG.  Because of the lack of Argentine gas since 2006, Endesa Chile has been using coal and diesel in an extensive way.  Diesel consumption during the last four years was 23,000 tons, 591,000 tons, 728,000 tons and 430,000 tons in 2006, 2007, 2008 and 2009, respectively.  On the other hand, coal consumption was 438,000 tons, 851,000 tons, 774,000 tons and 760,000 tons in 2006, 2007, 2008 and 2009, respectively.  In May 2007, as part of a consortium with Enap, Metrogas and British Gas, in which Endesa Chiles participation is 20%, we agreed to the construction of the LNG re-gasification facility in Quintero Bay, in order to deal with the Argentine gas.  In July 2008, we started the construction of a pipeline that supplies the gas obtained at the re-gasification plant in Quintero to Quillota and to San Isidro and other off-takers.  The pipeline is 28 km long and has a capacity of 15 million m3/d.  The construction was completed in February 2009.  The LNG terminal commissioning began in July 2009 and partial fast-track commercial operations started in March 2009; full commercial operations should begin in August 2010.  On June 29, 2009, the first ship with LNG arrived, and after that, another seven commercial ships arrived with LNG during 2009.  Endesa Chile consumed 206 million m3 of LNG in 2009.  Thermal Unit Quintero began partial commercial operations in July 2009 and full commercial operations in September 2009 using diesel fuel.  Partial commercial operations burning LNG began in November 2009 and full commercial operations on December 2009.  ELECTRICITY SALES PER SYSTEM IN CHILE (GWh)  Year ended December 31,2007
     
     2008
     
     2009Sales
(GWh)
     
     Sales
(GWh)
     
     Sales
(GWh)Electricity sales in the SIC
     
     39,982
     
     39,594
     
     39,401Electricity sales in the SING
     
     12,674
     
     13,219
     
     13,657Total electricity sales
     
     52,656
     
     52,813
     
     53,058
  Our physical energy sales in Chile reached 21,532 GWh in 2008 and 22,327 GWh in 2009 which represent a 40.8% and 42.1% market share, respectively.  The percentage of the energy purchases to satisfy our contractual obligations to third parties has declined from 5.3% in 2007 to 2.3% in 2009, as a result of the increase in our generation.  The following table sets forth our electricity purchases and production in Chile:  ENDESA CHILE PHYSICAL GENERATION AND PURCHASES IN CHILE (GWh)  Year ended December 31,2007
     
     2008
     
     2009(GWh)
     
     %
of Volume
     
     (GWh)
     
     %
of Volume
     
     (GWh)
     
     %
of VolumeElectricity generation
     
     18,773
     
     94.7
     
     21,267
     
     96.8
     
     22,239
     
     97.7Electricity purchases
     
     1,042
     
     5.3
     
     698
     
     3.2
     
     532
     
     2.3Total (1)
     
     19,815
     
     100.0
     
     21,965
     
     100
     
     22,772
     
     100
 
 (1)
     Total GWh generation plus purchases differs from GWh sales due to transmission losses, as power plant consumption and technical losses have already been deducted.
   29


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Endesa Chile supplies electricity to the major regulated electricity distribution companies, large unregulated industrial firms (primarily in the mining, pulp and steel sectors) and the pool market.  Commercial relationships with customers are usually governed by contracts.  Supply contracts with distribution companies must be auctioned, are generally standardized and have an average term of ten years.  Supply contracts with unregulated customers (large industrial customers) are specific to the needs of each client and the conditions are agreed between both parties, reflecting competitive market conditions.  In 2007, 2008 and 2009, Endesa Chile had 35, 40 and 44 customers in Chile, respectively, including for 2009 eight main distribution companies in the SIC, 33 unregulated industrial customers in the SIC and the SING and three minor commercial customers.  There were 22 distribution companies which presented energy withdrawals under the provisions of Resolution 88, accounting for 11.4% of total sales.  (See   B. Business OverviewElectricity Industry Regulatory Framework.).Sociedad Austral de Electricidad S.A., or Saesa, a non-related Chilean distribution company, was the largest with purchases of 669 GWh/year.  The following table sets forth information regarding our sales of electricity in Chile by type of customer:  ENDESA CHILE PHYSICAL SALES PER CUSTOMER PRICE SEGMENT
IN CHILE (GWh)  Year ended December 31,2007
     
     2008
     
     2009Sales
(GWh)
     
     % of 
Sales
Volume
     
     Sales
(GWh)
     
     % of 
Sales
Volume
     
     Sales
(GWh)
     
     % of 
Sales
VolumeRegulated customers (1)
     
     11,502
     
     59.9
     
     12,166
     
     56.5
     
     11,966
     
     53.6Unregulated customers
     
     5,281
     
     27.5
     
     6,034
     
     28.0
     
     6,177
     
     27.7Electricity pool market sales
     
     2,430
     
     12.6
     
     3,331
     
     15.5
     
     4,183
     
     18.7Total electricity sales
     
     19,212
     
     100.0
     
     21,532
     
     100.0
     
     22,327
     
     100.0
 
 (1)
     Includes the sales to distribution companies pursuant to Resolution 88.
  Endesa Chiles most significant supply contracts with regulated customers are with Chilectra S.A. (Chilectra) andCompañía General de Electricidad S.A.(CGE), the two largest distribution companies in Chile in terms of sales.  Endesa Chiles current contracts with Chilectra expire in December 2010.  Endesa Chiles contracts with CGE expired in December 2009.  In March 2008, Chilectra and other distributors allocated the third long-term energy bid for 1,800 GWh for the period 2011-2021 and 1,500 GWh for the period 2022-2023, in both cases to Gener.  In January 2009, Chilquinta, Saesa and CGE allocated 8,010 GWh, divided in four blocks (BB1, BB2, BB3 and BB4) to be delivered starting on January 2010 for 14, 12, 14 and 15 years, respectively.  The energy allocated was 7,110 GWh and represented 88.7% of the bidders demand.  The energy allocation per company and per block was as follows:  BB1 - 
Chilquinta
(GWh)
     
     BB2 - Saesa
(GWh)
     
     BB3 - CGE
(GWh)
     
     BB4 - CGE
(GWh)
     
     Total per 
company
(GWh)Gener
     
     1,100
     
     
     
     
     
     
     
     1,100Endesa
     
     660
     
     
     
     
     
     2,000
     
     2,660Campanario
     
     
     
     850
     
     900
     
     
     
     1,750Monte Redondo
     
     
     
     
     
     100
     
     
     
     100Colbún
     
     
     
     
     
     1,500
     
     
     
     1,500Total allocated
     
     1,760
     
     850
     
     2,500
     
     2,000
     
     7,110Total required
     
     1,760
     
     850
     
     2,700
     
     2,700
     
     8,010% allocated
     
     100.0
     %
     100.0
     %
     92.6
     %
     74.1
     %
     88.7
     %
  In July 2009, CGE allocated the fourth long-term bid for 850 GWh per year, from 2010 to 2021, as follows:   30


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CGE
(GWh)Endesa
     
     400Monte Redondo
     
     175Emelda
     
     200Eléctrica Puntilla
     
     75Total allocated
     
     850
  Endesa Chiles contracts with unregulated customers are generally long term, and typically range from five to fifteen years.  Such contracts are usually automatically extended at the end of the applicable term, unless terminated by either party upon prior notice.  Some of them include a price adjustment mechanism in the case of high marginal costs, which also reduces the hydrological risk.  Contracts with unregulated customers may also include specifications regarding power sources and equipment, which may be provided at special rates, as well as provisions for technical assistance to the customer.  Endesa Chile has not experienced any supply interruptions under its contracts.  In case offorce majeurewith unregulated customers, as contractually defined, Endesa Chile is also allowed to reject purchases and is not required to supply electricity.  Disputes are typically subject to binding arbitration between the parties, subject to limited exceptions.  The following table sets forth our sales by volume to our five largest distribution and unregulated customers in Chile for each of the periods indicated:  MAIN CUSTOMERS IN CHILE (GWh)  Year ended December 31,2007
     
     2008 (5)
     
     2009Sales
(GWh)
     
     % of total
Sales
     
     Sales
(GWh)
     
     % of total
Sales
     
     Sales
(GWh)
     
     % of total
SalesDistribution companies:Chilectra
     
     4,017
     
     20.9
     
     3,727
     
     17.3
     
     3,731
     
     16.7CGE
     
     4,835
     
     25.2
     
     4,800
     
     22.3
     
     4,727
     
     21.2Saesa (1)
     
     746
     
     3.9
     
     766
     
     3.6
     
     669
     
     3.0Empresa Eléctrica de la Frontera S.A. (2)
     
     756
     
     3.9
     
     1
     
     0.0
     
     1
     
     0.0Grupo Emel (3)
     
     195
     
     1.0
     
     845
     
     3.9
     
     869
     
     3.9Total sales to five largest distribution companies
     
     10,548
     
     54.9
     
     10,139
     
     47.1
     
     9,997
     
     44.8Unregulated customers:Codelco
     
     494
     
     2.6
     
     482
     
     2.2
     
     540
     
     2.4CMPC
     
     1,103
     
     5.7
     
     973
     
     4.5
     
     912
     
     4.1Cía. Minera Los Pelambres
     
     871
     
     4.5
     
     874
     
     4.1
     
     926
     
     4.1Cía. Minera Collahuasi (4)
     
     869
     
     4.5
     
     1,043
     
     4.8
     
     1,099
     
     4.9Cía. Minera Escondida
     
     0
     
     0
     
     645
     
     3.0
     
     692
     
     3.1Cía. Acero del Pacífico  Huachipato
     
     588
     
     3.1
     
     568
     
     2.6
     
     500
     
     2.2Total sales to six largest unregulated customers
     
     3,925
     
     20.4
     
     4,586
     
     21.3
     
     4,667
     
     20.9
 
 (1)
     Endesa Chile does not have a contract with Saesa. Sales are the result of government Resolution 88 that forces the generators of the CDEC-SIC system to supply distribution companies without contracts.(2)
     Until December 2007,Empresa Eléctrica de la Frontera S.A., Frontel, was a party to two contracts; one was with Endesa Chile and one with Pangue.  In 2008, the contract with Endesa Chile terminated.  The consumption by Frontel as the result of government Resolution 88 is not included in this table.  Frontel is a subsidiary of Saesa.(3)
     The values of theEmel Groupfor 2007 includes the consumption of Empresa Eléctrica de Atacama S.A, Emelat andfor years 2008 and 2009includes the 50% of the consumptions of the distributorsEmpresa Eléctrica de Arica, Emelari,Empresa Eléctrica de Iquique S.A., Eliqsa, andEmpresa Eléctrica de Antofagasta, Elecda, clients of GasAtacama, and the consumptions of theEmpresa Eléctrica de Atacama S.A., Emelat, customer of Celta.  The consumptions as the result of governments Resolution 88 are not included in this table.EmelGroupis a subsidiary of CGE.(4)
     Consumptions ofCía Minera Collahuasiinclude the 50% of the contract of GasAtacama with this client and the contracts with Celta.(5)
     In2008 Endesa Chile agreed on a reduction of energy consumption with some customers, including CMPC and Codelco  Salvador.
  31


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Endesa Chile competes in the SIC primarily with two generation companies, Gener and Colbún S.A. (Colbún).  According to CDEC-SIC in 2009, Gener and its subsidiaries in the SIC counted on an installed capacity of 2,097 MW, of which 88.3% was thermal electric, and Colbún on 2,484 MW, of which 51.8% was thermal electric.  In addition to these two large competitors, there are a number of smaller entities with an aggregate installed capacity of 1,750 MW that generate electricity in the SIC.  Endesa Chiles primary competitors in the SING are Edelnor (GDF Suez Group) and Gener, which have 1,757 MW and 931 MW of installed capacity, respectively.  Endesa Chiles direct participation in the SING, includes a 182 MW Tarapacá thermal plant, owned by its subsidiary Celta and our indirect participation through our jointly-controlled company, GasAtacama, whose power plant has 781 MW of installed capacity.  An installed capacity of 390 MW is included in this report as installed capacity of Endesa Chile, an amount that corresponds to the 50% of the participation of Endesa Chile in GasAtacama.  Electricity generation companies compete largely on the basis of technical experience and reliability in the regulated markets and in the case of unregulated customers, also on price.  In addition, because 68.2% of our installed capacity in the SIC derives from hydroelectric power plants, we have lower marginal production costs than companies generating electricity with thermal plants.  During periods of extended droughts, however, we may be forced to buy more expensive electricity from thermoelectric generators at spot prices in order to satisfy our contractual obligations.  Our subsidiary Endesa Chile and its subsidiaries Pehuenche, Pangue, San Isidro and Endesa Eco, are the principal operators in the SIC, with 44.5% of the total installed capacity and 49.3% of the physical energy sales of this system in 2009.  In the SING, our subsidiary Celta and our jointly-controlled company GasAtacama, account for 15.5% of the total installed capacity in 2009.  Celta has a two-turbine 182 MW thermal power plant connected to the SING, which represents 4.9% of the total capacity of the SING.  For Endesa Chile, GasAtacama represents a total of 390 MW, or 10.6% of the total capacity in the SING.  The following table sets out information relating to Endesa Chiles electricity generation capacity in Chile:  POWER PLANTS IN CHILE (MW) (1) Type (2)
     
     System
     
     Installed 
Capacity
(MW)HydroelectricRalco
     
     Reservoir
     
     SIC
     
     690Pehuenche
     
     Reservoir
     
     SIC
     
     570Pangue
     
     Reservoir
     
     SIC
     
     467El Toro
     
     Reservoir
     
     SIC
     
     450Rapel
     
     Reservoir
     
     SIC
     
     377Cipreses
     
     Reservoir
     
     SIC
     
     106Antuco
     
     Pass-through
     
     SIC
     
     320Abanico
     
     Pass-through
     
     SIC
     
     136Curillinque
     
     Pass-through
     
     SIC
     
     89Sauzal
     
     Pass-through
     
     SIC
     
     77Isla (3)
     
     Pass-through
     
     SIC
     
     70Loma Alta
     
     Pass-through
     
     SIC
     
     40Palmucho (4)
     
     Pass-through
     
     SIC
     
     34Los Molles
     
     Pass-through
     
     SIC
     
     18Sauzalito
     
     Pass-through
     
     SIC
     
     12Ojos de Agua
     
     Pass-through
     
     SIC
     
     9Total hydroelectric
     
     
     
     
     
     3,465ThermalTarapacá coal
     
     Steam Turbine /Coal
     
     SING
     
     158Bocamina
     
     Steam Turbine/Coal
     
     SIC
     
     128Tarapacá GT
     
     Steam Turbine/Diesel Oil
     
     SING
     
     24Huasco ST
     
     Steam Turbine/Coal
     
     SIC
     
     16Taltal
     
     Gas Turbine/Gas & Diesel Oil
     
     SIC
     
     245Huasco GT
     
     Gas Turbine/IFO 180 Oil
     
     SIC
     
     64Diego de Almagro
     
     Gas Turbine/Diesel Oil
     
     SIC
     
     47San Isidro 2 (5)
     
     Combined Cycle/Gas & Diesel Oil
     
     SIC
     
     399GasAtacama (7)
     
     Combined Cycle/Gas & Diesel Oil
     
     SING
     
     390San Isidro
     
     Combined Cycle/Gas & Diesel Oil
     
     SIC
     
     379Quintero (6)
     
     Combined Cycle/Gas & Diesel Oil
     
     SIC
     
     257Total thermal
     
     
     
     
     
     2,107WindCanela II (8)
     
     Wind Power
     
     SIC
     
     60Canela
     
     Wind Power
     
     SIC
     
     18Total wind
     
     
     
     
     
     78Total capacity
     
     
     
     
     
     5,650
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(1)
     Total installed capacity is defined as the maximum capacity, under specific technical conditions and characteristics.(2)
     Reservoir and pass-through refer to a hydroelectric plant that uses a dam or a river, respectively, to move the turbines which generate electricity. Steam Turbine refers to a thermal power plant that uses natural gas, coal, diesel or fuel oil to produce steam, which moves the turbines to generate the electricity. Gas Turbine (GT) or open cycle refers to a thermal power plant that uses diesel oil, fuel oil, natural gas or other fuels to produce gas that moves the turbines to generate the electricity. Combined Cycle refers to a thermal power plant that uses natural gas, diesel oil or fuel oil to generate gas that moves the turbines to generate electricity, and then recovers the heat of the exhaust gases to generate steam to move another turbine.(3)
     In December 2009, the installed capacity recognized by the CDEC-SIC of the unit Isla increased from 68 MW to 70 MW.(4)
     In December 2009, the installed capacity recognized by the CDEC-SIC of the unit Palmucho increased from 32 MW to 34 MW(5)
     In December 2009, the installed capacity recognized by the CDEC-SIC of the unit San Isidro 2 due to the arrival of LNG increased from 353 MW to 399 MW.(6)
     Quinteros project started operations with one unit in July 2009 (129 MW), and with the second unit (128 MW) in September 2009.(7)
     Since 2009, 50% of GasAtacama is included into Endesa Chiles financial statements.(8)
     Canela II started operations in December 2009 with 40 generators.
  Generation in Argentina  We participate in electricity generation in Argentina through our subsidiaries Endesa Costanera and El Chocón, with a total of five power plants.  El Chocón owns two hydroelectric power plants, with total installed capacity of 1,328 MW and Endesa Costanera owns three thermal plants, with a total installed capacity of 2,324 MW.  Our hydro and thermal generation plants in Argentina represented 13.5% of theSistema Interconectado Nacional(the Argentine NIS) generation capacity in 2009.  Our Argentine subsidiaries participate in two new companies, Manuel Belgrano and San Martín.  These companies were formed to undertake the construction of two new generation facilities for Foninvemen.  These power plants started operations using gas turbines in 2008, with 1,125 MW of aggregate capacity, and operation as combined cycles was complete for Manuel Belgrano in January 2010 and for San Martín in February 2010 with an additional 522 MW.  The total aggregate capacity of these units is 1,647 MW (823 MW for Manuel Belgrano and 824 MW for San Martín).  Since 2002, government intervention and energy industry authority actions, including limiting the spot price of electricity by considering the variable cost of generating electricity with natural gas without the hydrological conditions of rivers and reservoirs or the use of more expensive fuels, have led to the lack of investment in the electric power sector.  (See  Electricity Industry Regulatory Framework for further detail).   33


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As of December 31, 2009, Endesa Costaneras installed capacity accounted for 8.6% of the total installed capacity in the Argentine NIS.  Endesa Costaneras second combined-cycle plant can operate with natural gas and diesel.  Its 1,138 MW steam turbine power plant can operate with either natural gas or fuel oil.  El Chocón accounted for 4.9% of the installed capacity in the Argentine NIS as of December 31, 2009.  El Chocón has a 30-year concession, ending in 2023, for two hydroelectric generation facilities with an aggregate of 1,328 MW of installed capacity.  The larger of the two facilities for which El Chocón has a concession of 1,200 MW in installed capacity and is the primary flood control installation on the Limay River.  The facilitys large reservoir, Ezequiel Ramos Mejía, enables El Chocón to be one of the Argentine MEMs major peak suppliers.  Variations in El Chocóns water discharge are moderated by El Chocóns Arroyito facility, a downstream dam with 128 MW of installed capacity.  In November 2008 we finished the construction work on the Arroyito dam, and increased the elevation of the reservoir water level, that allows releasing water at an additional 1,150 m3/sec, for a total of 3,750 m3/sec.  The additional energy (69 GWh/year) was sold on the spot market until April 2009 and on the Energy Plus market thereafter.  Energy Plus Service is the offer of new electricity capacity to supply the electricity demand growth, on top of the demand level for electricity in 2005.  (For details on Energy Plus, see  Electricity Industry Regulatory Framework).  The following table sets forth the installed capacity of our Argentine subsidiaries:  INSTALLED CAPACITY PER SUBSIDIARY IN ARGENTINA (MW)  As of December 31,2007
     
     2008
     
     2009Endesa CostaneraCostanera (steam turbine)
     
     1,138
     
     1,138
     
     1,138Costanera (combined cycle II)
     
     859
     
     859
     
     859Central Termoeléctrica Buenos Aires (combined cycle I)
     
     327
     
     327
     
     327El ChóconEl Chocón (reservoir)
     
     1,200
     
     1,200
     
     1,200Arroyito (pass-through)
     
     120
     
     128
     
     128Total
     
     3,644
     
     3,652
     
     3,652
  Our total generation in Argentina reached 11,955 GWh in 2009, 14.1% higher than our 10,480 GWh total electricity generation in 2008.  Our generation market share was approximately 10.7% of total electricity production in Argentina during 2009.  The following table sets forth the electricity generation of our Argentine subsidiaries:  ELECTRICITY GENERATION PER SUBSIDIARY IN ARGENTINA (GWh)  Year Ended December 31,2007
     
     2008
     
     2009Endesa Costanera
     
     8,421
     
     8,540
     
     8,172El Chocón
     
     3,696
     
     1,940
     
     3,783Total
     
     12,117
     
     10,480
     
     11,955
  Hydroelectric generation accounted for nearly 31.6% of total generation in 2009, higher than in 2008 due to the restrictions of the operation of El Chocón imposed by Cammesa and the low level of the reservoir during the first half of 2008; the hydrological conditions presented during 2009 were classified as normal.  The level of El Chocón measured bi-annually in 2008 and 2009, in terms of GWh, is shown in the following table:  2008
     
     2009Reservoir El Chocón
     
     (GWh)
     
     (GWh)June 30,
     
     500
     
     1,100December 31,
     
     1,400
     
     1,460
  The volumes and percentages of hydroelectric and thermal generation are shown in the following table:   34


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HYDRO/THERMAL GENERATION IN ARGENTINA (GWh) (1)  Year ended December 31,2007
     
     2008
     
     2009(GWh)
     
     %
     
     (GWh)
     
     %
     
     (GWh)
     
     %Hydroelectric generation
     
     3,696
     
     30.5
     
     1,940
     
     18.5
     
     3,783
     
     31.6Thermal generation
     
     8,421
     
     69.5
     
     8,540
     
     81.5
     
     8,172
     
     68.4Total generation
     
     12,117
     
     100.0
     
     10,480
     
     100.0
     
     11,955
     
     100.0
 
 (1)
     Generation minus our own power plant consumption and technical losses.
  The amount of energy generated and purchased in the last three years is shown in the following table:  PHYSICAL GENERATION AND PURCHASES IN ARGENTINA (GWh)  2007
     
     2008
     
     2009(GWh)
     
     %
     
     (GWh)
     
     %
     
     (GWh)
     
     %Electricity generation
     
     12,117
     
     97.1
     
     10,480
     
     93.8
     
     11,955
     
     95.8Electricity purchases
     
     367
     
     2.9
     
     694
     
     6.2
     
     528
     
     4.2Total(1)
     
     12,484
     
     100.0
     
     11,174
     
     100.0
     
     12,483
     
     100.0
 
 (1)
     Energy generation plus energy purchases differs from electricity sales due to power plant consumption of electricity that had been uploaded to the grid, referred to as non billed electricity consumption.
  The distribution of physical sales in Argentina, in terms of customer segment, is shown in the following table:  PHYSICAL SALES PER CUSTOMER SEGMENT IN ARGENTINA (GWh)  Year Ended December 31,2007
     
     2008
     
     2009(GWh)
     
     % of 
Sales 
Volume
     
     (GWh)
     
     % of Sales 
Volume
     
     (GWh)
     
     % of Sales 
VolumeContracted sales
     
     2,364
     
     19.1
     
     2,397
     
     21.6
     
     2,128
     
     17.2Non-contracted sales
     
     10,042
     
     80.9
     
     8,701
     
     78.4
     
     10,278
     
     82.8Total electricity sales
     
     12,406
     
     100.0
     
     11,098
     
     100.0
     
     12,405
     
     100.0
  PHYSICAL SALES PER SUBSIDIARY IN ARGENTINA (GWh)  Year Ended December 31,2007
     
     2008
     
     2009Endesa Costanera
     
     8,450
     
     8,543
     
     8,284El Chocón
     
     3,956
     
     2,554
     
     4,122Total
     
     12,406
     
     11,098
     
     12,405
  During 2009, Endesa Costanera served an average of 46 unregulated customers.  Endesa Costanera has no contracts with distribution companies.  Given the regulatory measures adopted since 2003, the current Argentine electricity industry price scenario makes sales to distribution companies less attractive than sales to the wholesale market.   35


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The following table sets forth Endesa Costaneras sales to its largest unregulated customers for each of the periods indicated:  ENDESA COSTANERAS MAIN CUSTOMERS (GWh)
 Year ended December 31,2007
     
     2008
     
     2009Sales 
(GWh)
     
     % of contracted 
Sales
     
     Sales 
(GWh)
     
     % of contracted Sales
     
     Sales 
(GWh)
     
     % of contracted SalesYPF
     
     159
     
     15.5
     
     233
     
     22.5
     
     122
     
     15.8Acindar
     
     88
     
     8.6
     
     88
     
     8.5
     
     29
     
     3.7Solvay
     
     87
     
     8.5
     
     130
     
     12.5
     
     96
     
     12.4Transclor
     
     81
     
     7.9
     
     63
     
     6.1
     
     58
     
     7.5Peugeot
     
     79
     
     7.7
     
     63
     
     6.1
     
     48
     
     6.2Cencosud
     
     119
     
     11.6
     
     59
     
     5.7
     
     71
     
     9.2Total sales to our largest unregulated customers
     
     611
     
     59.7
     
     635
     
     61.5
     
     424
     
     54.9
  Sales to the pool market remained stable at 7,511 GWh during 2008 and 2009.  The Argentine energy crisis, which began in 2004, continues as of the date of this report.  In accordance with the open season regulations, in 2008 the gas transportation capacity was expanded by 3.7 million m3/day.  Argentina imported 1,700 million m3 of natural gas from Bolivia in 2009.  The 2008 season of re-gasification from ships started in June and ended in September in Bahía Blanca and injected 440 million m3 of gas.  The 2009 season of re-gasification from ships started in May 2009 and finished in September in Bahía Blanca and injected 770 million m3 of gas.  During 2008 and 2009, Endesa Costanera, through its subsidiary Endesa Cemsa S.A. (Cemsa), negotiated with a number of gas producers, which allowed Costanera to diversify and improve the availability of gas for supply to Costaneras units, including the ability to trade gas with other generators.  During 2009, El Chocón served an average of 25 unregulated customers.  El Chocón has no contracts with distribution companies.  The following table sets forth sales by volume to the largest unregulated customers of El Chocón for each of the periods indicated:  EL CHOCONS MAIN CUSTOMERS (GWh)  Year ended December 31,2007
     
     2008
     
     2009Sales 
(GWh)
     
     % of 
contract 
Sales
     
     Sales 
(GWh)
     
     % of 
contract 
Sales
     
     Sales 
(GWh)
     
     % of 
contract 
SaleMinera Alumbrera
     
     569
     
     42.4
     
     571
     
     41.9
     
     542
     
     40.0Profertil (Cemsa) (1)
     
     145
     
     10.8
     
     94
     
     6.9
     
     115
     
     8.5Massuh
     
     109
     
     8.1
     
     85
     
     6.2
     
     
     
     0.0Chevron
     
     112
     
     8.3
     
     136
     
     10.0
     
     120
     
     8.8Acindar (Cemsa) (1)
     
     88
     
     6.5
     
     88
     
     6.4
     
     75
     
     5.5Praxair
     
     
     
     0.0
     
     89
     
     6.5
     
     80
     
     5.9Air Liquide (2)
     
     9
     
     0.6
     
     30
     
     2.2
     
     122
     
     9.0Total sales to our largest unregulated customers
     
     1,032
     
     76.9
     
     1,093
     
     80.1
     
     1,055
     
     77.8
  (1)
     Profertil and Acindar do not have contracts with El Chocón, but are served through Cemsa, an Endesa Chile affiliate.(2)
     During 2009, Air Liquide was the second largest customer of El Chocón.  These values differ from those reported in the 2008 Form 20-F for 2007 and 2008, because Air Liquide was not incorporated at that time since its sales reported less than 3% of El Chocóns total sales.
  Our subsidiary Endesa Chile operates El Chocón pursuant to an operating agreement with a term equal to the duration of the concession that expires in 2023.  El Chocón does not have the right to terminate the operating agreement, unless Endesa Chile fails to perform its obligations under the agreement.  Under the terms of the operating agreement, Endesa Chile is entitled to a fee payable in dollars based on El Chocóns annual gross revenues, payable in monthly installments. The management fee for 2007, 2008 and 2009 was $2.2 million, $2.2 million and $2.4 million, respectively.    36


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Our Argentine subsidiaries compete with all the major power plants connected to the Argentine NIS.  According to the installed capacity reported by Cammesa in the monthly report for December 2009, our major competitors in Argentina are the state-controlled companies Enarsa (with an installed capacity of 554 MW), nuclear units -NASA- (1,005 MW) and the binational hydro units Yacyreta and Salto Grande (3,225 MW in total).  The main private competitors are: AES Group,Sociedad Argentina de Energía S.A.(Sadesa), and Pampa Energía.  The AES Group has nine power plants connected to the Argentine NIS with a total capacity of 2,810 MW (43% hydro) and one plant that is not connected to the Argentine NIS that delivers energy to the Chilean SING, Termo Andes, with a total capacity of 411 MW.  On the other hand, Sadesa owns a total of approximately 3,860 MW, the most important of which are Piedra del Aguila (hydro 1,400 MW) and Central Puerto (thermal 1,777 MW); while Pampa Energíacompetes with us through five power plants, Diamante and Nihuiles (both hydro, 612 MW in total), and Güemes,Loma de la Lata and Piedra Buena (thermal, 1,356 MW in total).  Generation in Brazil  Endesa Brasil consolidates operations of generation companies Endesa Fortaleza and Cachoeira Dourada; CIEN, which transmits electricity from two transmission lines between Argentina and Brazil; CTM and TESA, subsidiaries of CIEN, which are owners of the Argentine side of the lines; a distribution company, Ampla, which is the second largest electricity distribution company in the State of Rio de Janeiro; and Coelce, which is the sole electricity distributor in the State of Ceará.  As of December 2009, we had a total installed capacity of 987 MW in Brazil.  Of this amount, 665 MW corresponds to Cachoeira Dourada and 322 MW to Endesa Fortaleza.  The following table sets forth information relating to Enersis installed capacity in Brazil:  INSTALLED CAPACITY IN BRAZIL (MW) (1)  (MW)2007
     
     2008
     
     2009Cachoeira Dourada (hydro)
     
     665
     
     665
     
     665Fortaleza (thermal)
     
     322
     
     322
     
     322Total
     
     987
     
     987
     
     987
    (1)Total installed capacity is defined as the maximum MW capacity of generation units, under specific technical conditions and characteristics.  The following table sets forth the physical energy production of Cachoeira Dourada and Endesa Fortaleza:  OUR PHYSICAL PRODUCTION IN BRAZIL (GWh)  Year ended December 31,2007
     
     2008
     
     2009(GWh)
     
     %
     
     (GWh)
     
     %
     
     (GWh)
     
     %Cachoeira Dourada
     
     3,888
     
     98.3
     
     3,308
     
     97.9
     
     2,820
     
     85.0Endesa Fortaleza
     
     66
     
     1.7
     
     71
     
     2.1
     
     499
     
     15.0Total
     
     3,954
     
     100.0
     
     3,379
     
     100.0
     
     3,319
     
     100.0
  Cachoeira Dourada is a hydroelectric company with an installed capacity of 665 MW, located in the south of Brazil.  It has long-term contracts with 34 distribution companies due to the bids realized for regulated consumers by theContrato de Comercialización de Energía en Ambiente Regulado(CCEAR).The contract sales with regulated clients were for 1,165 GWh. During 2009, Cachoeira also sold 2,246 GWh to unregulated clients.   37


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The following table sets forth the levels of electricity production and purchases for our Brazilian subsidiaries for the past three years:  PHYSICAL PRODUCTION AND PURCHASES IN BRAZIL (GWh)  Year ended December 31,2007
     
     2008
     
     2009(GWh)
     
     %
     
     (GWh)
     
     %
     
     (GWh)
     
     %Electricity production
     
     3,954
     
     51
     
     3,379
     
     48
     
     3,319
     
     44Electricity purchases
     
     3,814
     
     49
     
     3,611
     
     52
     
     4,284
     
     56Total (1)
     
     7,768
     
     100.0
     
     6,990
     
     100.0
     
     7,603
     
     100.0
 
 (1)
     Energygeneration plus energy purchases differs from electricity sales due to power plant consumption of electricity that had been uploaded to the grid, referred to as non billed electricity consumption.
  The following table sets forth certain statistical information regarding Cachoeira Douradas electricity sales:  Year ended December 31,2007
     
     2008
     
     2009(GWh)
     
     % of
Sales
Volume
     
     (GWh)
     
     % of
Sales
Volume
     
     (GWh)
     
     % of
Sales
VolumeContracted sales
     
     3,884
     
     83.6
     
     3,947
     
     89.8
     
     3,411
     
     88.3Non-contracted sales
     
     760
     
     16.4
     
     457
     
     10.2
     
     451
     
     11.7Total electricity sales
     
     4,644
     
     100.0
     
     4,403
     
     100.0
     
     3,862
     
     100.0
  Endesa Fortaleza is wholly-owned by Endesa Brasil, in which Enersis holds a 53.6% interest.  Endesa Fortaleza owns a combined cycle plant which uses natural gas.  The plant is located 50 kilometers from the capital of the Brazilian state of Ceará, and began commercial operations in 2003.  The following table sets forth certain statistical information regarding Endesa Fortalezas installed capacity and electricity sales:  Year ended December 31,2007
     
     2008
     
     2009Installed capacity (MW)
     
     322
     
     322
     
     322Electricity sales (GWh)
     
     2,705
     
     2,690
     
     3,007
  Endesa Fortalezas market share is 0.3% of the total installed capacity of the Brazilian system and 1.1% of the thermoelectric generators.  The following table sets forth certain statistical information regarding Endesa Fortalezas electricity sales:  Year ended December 31,2007
     
     2008
     
     2009(GWh)
     
     % of
Sales
Volume
     
     (GWh)
     
     % of
Sales
Volume
     
     (GWh)
     
     % of
Sales
VolumeContracted sales
     
     2,690
     
     99.4
     
     2,690
     
     100.0
     
     2,918
     
     97.1Non-contracted sales
     
     15
     
     0.6
     
     0
     
     0.0
     
     88
     
     2.9Total electricity sales
     
     2,705
     
     100.0
     
     2,690
     
     100.0
     
     3,007
     
     100.0
  Generation in Colombia  Until August 2007, we controlled two electricity generation companies in Colombia, Betania and Emgesa.  These companies were merged into Betania, which then changed its name to Emgesa S.A. E.S.P.  We have a 16.1% stake in Emgesa as of December 31, 2009, and due to a shareholders agreement, we have the right to appoint the majority of the Board members and, therefore, control Emgesa.   38


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As of December 31, 2009, our Colombian subsidiary operated eleven generation plants in Colombia, with a total installed capacity of 2,895 MW.  Emgesa has 2,451 MW in hydroelectric plants and 444 MW in thermoelectric plants.  During 2009, there were no changes in Emgesas installed capacity.  Our hydroelectric and thermal generation plants in Colombia represent 21.4% of the countrys total electricity generation capacity as of December 2009.  The following table sets forth the installed generation capacity of our Colombian subsidiaries for the last three years:  INSTALLED CAPACITY IN COLOMBIA (MW)(1)(2)  Year ended December 31,2007
     
     2008
     
     2009(MW)EmgesaGuavio (reservoir)
     
     1,213
     
     1,213
     
     1,213Cadena Nueva (reservoir/pass-through)(3)
     
     601
     
     601
     
     601Betania (reservoir)
     
     541
     
     541
     
     541Termozipa (steam turbine/coeal)
     
     236
     
     236
     
     236Cartagena (steam turbine/gas + diesel oil)
     
     142
     
     208
     
     208Minor Plants (pass-through) (4)
     
     96
     
     96
     
     96Total
     
     2,829
     
     2,895
     
     2,895
  (1)
     The figure includes the capacity used for power plant consumption.(2)
     The installed capacity was certified during the three years by Bureau Veritas.(3)
     Includes two power plants named La Guaca and Paraiso.(4)
     As of December 31, 2009 Emgesa owned and operated five minor plants:Charquito,ElLimonar,LaTinta,TequendamaandLaJunca.
  Approximately 85% of our installed capacity in Colombia is hydroelectric.  As a result, our physical generation depends on the reservoir levels and rainfalls.  Our generation market share in Colombia was 22% in 2007, 23.7% in 2008 and 22.6% in 2009.  In addition to hydrological conditions, the amount of generation depends on our commercial strategy.  Companies are free to offer their electricity at prices driven by market conditions being dispatched by a centralized operating entity to generate according to the prices offered, as opposed to being dispatched according to the operating costs.  During 2009, thermal generation represented 7.7% of total generation and hydroelectric generation the remaining 92.3% of our generation in Colombia.  During the second half of 2009, there were very dry hydrological conditions in the Colombian system, which translated into less hydro electrical generation. Emgesa reduced its hydro generation by 703 GWh as compared with the 2008 generation.  Part of this decrease was replaced by thermal generation (471 GWh more than 2008), as is shown in the following table:  HYDRO/THERMAL GENERATION IN COLOMBIA (GWh) (1)  Year ended December 31,2007
     
     2008
     
     2009(GWh)
     
     %
     
     (GWh)
     
     %
     
     (GWh)
     
     %Hydroelectric generation
     
     11,427
     
     95.7
     
     12,403
     
     96.1
     
     11,700
     
     92.3Thermal generation
     
     515
     
     4.3
     
     503
     
     3.9
     
     974
     
     7.7Total generation
     
     11,942
     
     100.0
     
     12,905
     
     100.0
     
     12,674
     
     100.0
   39


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The main reservoir of Emgesa isEl Guavio, which level measured bi-annually in 2008 and 2009, in terms of GWh, is shown in the following table:  2008
     
     2009Reservoir El Guavio
     
     (GWh)
     
     (GWh)June 30,
     
     1,434
     
     1,029December 31,
     
     1,887
     
     1,310
  The following table sets forth the levels of electricity production and purchases for our Colombian subsidiaries for the past three years:  PHYSICAL PRODUCTION AND PURCHASES IN COLOMBIA (GWh)  Year ended December 31,2007
     
     2008
     
     2009(GWh)
     
     %
     
     (GWh)
     
     %
     
     (GWh)
     
     %Electricity production
     
     11,942
     
     75.8
     
     12,905
     
     78.1
     
     12,674
     
     74.7Electricity purchases
     
     3,814
     
     24.2
     
     3,611
     
     21.9
     
     4,284
     
     25.3Total
     
     15,756
     
     100.0
     
     16,517
     
     100.0
     
     16,958
     
     100.0
  The only interconnected electricity system in Colombia is theSistema Interconectado Nacional, the Colombian NIS.  Electricity demand in the Colombian NIS increased 1.5% during 2009.  Total electricity consumption was 52,851 GWh in 2007; 53,870 GWh in 2008 and 54,679 GWh in 2009.  The demand in Colombias electricity market has been affected by the agreement on International Transactions of Energy governing the interconnection with Ecuadors electricity system, which began operations in 2003.  During 2009, physical sales to Ecuador reached 1,077 GWh, 567 GWh higher than the 510 GWh reached in 2008.  The distribution of Endesa Chiles physical sales in Colombia, in terms of customer segment, is shown in the following table:  PHYSICAL SALES PER CUSTOMER SEGMENT IN COLOMBIA (GWh)  Year ended December 31,2007
     
     2008
     
     2009Sales
(GWh)
     
     % of
Sales
Volume
     
     Sales
(GWh)
     
     % of
Sales
Volume
     
     Sales
(GWh)
     
     % of Sales
VolumeContracted sales
     
     10,539
     
     67.5
     
     11,169
     
     68.2
     
     11,960
     
     71.2Non-contracted sales
     
     5,074
     
     32.5
     
     5,199
     
     31.8
     
     4,847
     
     28.8Total electricity sales
     
     15,613
     
     100.0
     
     16,368
     
     100.0
     
     16,806
     
     100.0
  During 2009, Emgesa served an average of 717 contracts with unregulated customers and 16 distribution and trading companies.  Our sales to the distribution company Codensa accounted for 39.3% of our total contract sales in 2009.  Physical sales to the five largest unregulated customers altogether reached 5.6% of total contracted sales.   40


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The following table sets forth our sales by volume to our six largest distribution customers in Colombia for the last three years:
 MAIN DISTRIBUTION AND TRADING CUSTOMERS IN COLOMBIA (GWh)  Year ended December 31,2007
     
     2008
     
     2009Sales
(GWh)
     
     % of
Sales
     
     Sales
(GWh)
     
     % of
Sales
     
     Sales
(GWh)
     
     % of
SalesCodensa (1)
     
     3,036
     
     28.8
     
     3,784
     
     33.9
     
     4,697
     
     39.3Enertolima
     
     437
     
     4.1
     
     150
     
     1.3
     
     471
     
     3.9Electrocosta
     
     652
     
     6.2
     
     79
     
     0.7
     
     517
     
     4.3Electricaribe
     
     479
     
     4.5
     
     1,194
     
     10.7
     
     954
     
     8.0EPM
     
     1,102
     
     10.5
     
     1,455
     
     13.0
     
     720
     
     6.0Meta
     
     649
     
     6.2
     
     624
     
     5.6
     
     163
     
     1.4Total sales to our largest distribution customers
     
     6,355
     
     60.3
     
     7,286
     
     65.2
     
     7,523
     
     62.9
 
 (1)  Our subsidiary.  Our most important competitors in Colombia include the following state-owned companies: Empresas Públicas de Medellín (with an installed capacity of 2,601 MW), Isagen (with an installed capacity of 2,106 MW), and Gecelca (with an installed capacity of 1,195 MW).  We also compete with the following privately owned companies in Colombia: Colinversiones (with a installed capacity of 1,719 MW, which includes the companies: Termoflores with 441 MW; Merieléctrica with 167 MW; and Epsa with 1,111 MW, which was acquired from the Union Fenosa group during 2009) and Chivor (with a installed capacity of 1,000 MW), which is owned by Gener, all as of December 2009.  Generation in Peru  Through our subsidiary Edegel, we operate a total of nine generation plants in Peru, with a total installed capacity of 1,667 MW as of December 2009.  Edegel owns seven hydroelectric power plants, with a total installed capacity of 745 MW, two of which are located 280 kilometers from Lima and five of which are located approximately 50 kilometers from Lima.  The company has two thermal plants which represent the remaining 922 MW of total installed capacity.  Our hydroelectric and thermal generation plants in Peru represent 28.5% of the countrys total electricity generation capacity according to the information reported in December 2009 by theOrganismo Supervisor de la Inversión en Energía y Minería,Supervisory Entity of the Investment on Energy and Mining (Osinergmin).  The following chart sets forth the installed capacity of Edegel:  INSTALLED CAPACITY IN PERU (MW)(1)  Year Ended December 31,2007
     
     2008
     
     2009(MW)Edegel S.A. (mixed)Huinco (hydroelectric)
     
     247
     
     247
     
     247Matucana (hydroelectric)
     
     129
     
     129
     
     129Callahuanca (hydroelectric)
     
     80
     
     80
     
     80Moyopampa (hydroelectric)
     
     65
     
     65
     
     65Huampani (hydroelectric)
     
     30
     
     30
     
     30Yanango (hydroelectric)
     
     43
     
     43
     
     43Chimay (hydroelectric)
     
     151
     
     151
     
     151Santa Rosa (thermal) (2)
     
     231
     
     229
     
     430Ventanilla (thermal)
     
     493
     
     493
     
     493Total.
     
     1,468
     
     1,467
     
     1,667
 
 (1)  The installed capacity was certified during 2007, 2008 and 2009 by Bureau Veritas. (2)  During 2009, Santa Rosa increased its installed capacity due to the incorporation of Unit TG8, which started operations in September 2009 with 193 MW and with an additional 7 MW since November 2009 (200 MW in total).   41


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Our generation market share was approximately 27% of total electricity production in Peru for 2008 and 2009.  HYDRO/THERMAL GENERATION IN PERU (GWh)(1)  Year ended December 31,2007
     
     2008
     
     2009(GWh)
     
     %
     
     (GWh)
     
     %
     
     (GWh)
     
     %Hydroelectric generation
     
     4,385
     
     57.3
     
     4,189
     
     51.7
     
     4,564
     
     55.9Thermal generation
     
     3,270
     
     42.7
     
     3,913
     
     48.3
     
     3,599
     
     44.1Total generation
     
     7,654
     
     100.0
     
     8,102
     
     100.0
     
     8,163
     
     100.0
 
 (1) Generation minus power plant own consumption and technical losses.  Hydrological generation represented 55.9% of Edegels total production in 2009.  Hydro generation increased by 375 GWh (9.0%) compared with 2008 generation, due to the rainy conditions presented during 2009.  For Edegel, the flow of the rivers associated at the Rimac basin was one of the highest since 1965.  Thermal generation in 2009 decreased by 314 GWh or 8.0%.  The portion of electricity supplied by Edegels own generation was 96.0% of total physical sales, requiring only a small amount of purchases to satisfy contractual obligations to customers.  Edegel has supply, transportation and distribution contracts for gas in Ventanilla and Santa Rosa.  During 2007, the gas pipeline Camisea-Lima, owned by TGP, reached its full capacity.  However, since May 2008, TGP started restrictions on the gas transfer through the pipeline.  In order to guarantee the transportation capacity for its natural gas demand, Edegel modified its agreements during 2007 and 2008, shifting from interruptible to firm mode, with a capacity of 1.5 million m3/d (from August 2008 to July 2009) and 2.7 million m3/d (from August 2009 to July 2019).  Thus, Edegel expects it will have enough capacity for the combined cycle of Ventanilla plant and part of Santa Rosa.  On the other hand, in 2009 Edegel extended the contract for transportation and distribution until 2025 at a level of 2.1 million m3/d from August 2019.  PHYSICAL GENERATION AND PURCHASES IN PERU (GWh) (1)  Year ended December 31,2007
     
     2008
     
     2009(GWh)
     
     %
     
     (GWh)
     
     %
     
     (GWh)
     
     %Electricity generation
     
     7,654
     
     93.9
     
     8,102
     
     93.9
     
     8,163
     
     96.0Electricity purchases
     
     499
     
     6.1
     
     525
     
     6.1
     
     337
     
     4.0Total(1)
     
     8,153
     
     100.0
     
     8,627
     
     100.0
     
     8,499
     
     100.0
 
 (1)Total GWh production plus purchases differs from GWh sales due to transmission losses, given that our own power plant consumption and technical losses have already been deducted.  Sistema Eléctrico Interconectado Nacional, or the SINAC, is the only interconnected system in Peru.  Electricity sales in the SINAC increased 0.3% during 2009 compared to 2008, reaching total annual sales of 27,082 GWh.  The distribution of Edegels physical sales, in terms of customer segment, is shown in the following table:  PHYSICAL SALES PER CUSTOMER SEGMENT IN PERU (GWh)  Year ended December 31,2007
     
     2008
     
     2009Sales
(GWh)
     
     % of
Sales
Volume
     
     Sales
(GWh)
     
     % of
Sales
Volume
     
     Sales
(GWh)
     
     % of
Sales
VolumeContracted sales (1)
     
     7,569
     
     94.7
     
     8,225
     
     97.2
     
     7,565
     
     90.9Non-contracted sales
     
     424
     
     5.3
     
     235
     
     2.8
     
     755
     
     9.1Total electricity sales
     
     7,994
     
     100.0
     
     8,461
     
     100.0
     
     8,321
     
     100.0
 
 (1) Includes the sales to distributors without contracts.   42


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Edegels physical sales in 2009 decreased by 1.7% compared to 2008.  Sales in the spot market increased 221.5% and contracted sales decreased by 8.0%.  The decrease in contracted sales is primarily due to the reduction in the energy sold to ElectroPerú whose contract with Ventanilla ended in September 2009, and compensated with the increase in sales to distributors for the bids realized during 2006, 2007 and 2008.  During 2009, Edegel had eight regulated customers.  Edegel has had contracts since 1997 withLuz del Surand Edelnor.  Edegel also won the bids launched by other distributors during 2006 and 2007.  The company has eleven unregulated customers.  Sales to unregulated customers represented 46.3% of Edegels total contracted sales in 2009, compared to 56.5% in 2008.  During 2009, there were nine bids for the supply of various distributors for the period 2009-2013.  The energy required was variable by year with values between 2,400 GWh and 14,100 GWh.  Of these processes, Edegel allocated 600, 2,775 and 3,362 GWh for the years 2011, 2012 and 2013, respectively.  The following table sets forth our sales by volume to our largest customers in Peru for each of the periods indicated:  MAIN CUSTOMERS IN PERU (GWh)  Year ended December 31,2007
     
     2008
     
     2009Sales
(GWh)
     
     % of contracted Sales
     
     Sales
(GWh)
     
     % of contracted Sales
     
     Sales
(GWh)
     
     % of contracted SalesDistribution companies:Edelnor (Regulated) (1)
     
     1,039
     
     13.7
     
     1,693
     
     20.6
     
     2,663
     
     35.2Luz del Sur (Regulated) (1)
     
     1,222
     
     16.1
     
     1,346
     
     16.4
     
     949
     
     12.5Hidrandina
     
     52
     
     0.7
     
     58
     
     0.7
     
     60
     
     0.8Electronoroeste
     
     46
     
     0.6
     
     49
     
     0.6
     
     50
     
     0.7Electronorte
     
     45
     
     0.6
     
     50
     
     0.6
     
     54
     
     0.7Electrosur
     
     27
     
     0.4
     
     30
     
     0.4
     
     32
     
     0.4Total sales to our largest distribution companies
     
     2,431
     
     32.1
     
     3,226
     
     39.2
     
     3,808
     
     50.3Unregulated costumers:ElectroPerú (2)
     
     2,427
     
     32.1
     
     2,775
     
     33.7
     
     1,821
     
     24.1Antamina
     
     682
     
     9.0
     
     644
     
     7.8
     
     652
     
     8.6Refinería
     
     516
     
     6.8
     
     635
     
     7.7
     
     614
     
     8.1Siderperú
     
     362
     
     4.8
     
     334
     
     4.1
     
     253
     
     3.3Total sales to our largest unregulated companies
     
     3,987
     
     52.7
     
     4,387
     
     53.3
     
     3,339
     
     44.1Total sales to our largest costumers
     
     6,418
     
     84.8
     
     7,613
     
     92.6
     
     7,147
     
     94,5
 
 (1)The figures for Edelnor andLuz del Surrepresent sales under bilateral contracts with Edegel only, and not withdrawals of these companies assigned to Edegel for non contract-related consumption.  For 2007, 2008, and 2009, the energy sold to these distributors includes the amount won by Edegel in the bids realized during 2006 and 2007. (2)Since 2006, ElectroPerú has been a customer of Edegel due to a merger with Etevensa.  The contract with ElectroPerú expired in September 2009.  Our most important competitors in Peru are Enersur (GDF-SUEZ group, with an installed capacity of 1,030 MW); ElectroPerú (state-owned competitor, with an installed capacity of 990 MW); Egenor (Duke Energy Group, with an installed capacity of 492 MW) and Kallpa (Inkia Energy group, with an installed capacity of 368 MW).  Electricity Transmission Business Segment  CIEN  CIEN is wholly-owned by Endesa Brasil, and we hold a 53.6% economic interest in CIEN.  CIEN consolidates CTM and TESA, which operate the Argentine side of the interconnection line with Brazil. CIEN represented 1.4% of our 2009 operating revenues and 2.2% of our operating income, both before consolidation adjustments.  During 2009, CIEN received toll payments for using transmission lines from Uruguay and Argentina (February to October).  43


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CIEN permits the energy integration of Mercosur and the import and export of electricity between Argentina, Uruguay and Brazil.  It has two transmission lines covering a distance of 500 kilometers between Rincón in Argentina and the Santa Catarina substation in Brazil, and a total installed capacity of 2,100 MW.   Electricity Distribution Business Segment  Our electricity distribution business has been conducted in Chile through Chilectra, in Argentina through Edesur, in Brazil through Ampla and Coelce, in Colombia through Codensa and Empresa Eléctrica Cundinamarca, and in Peru through Edelnor.  For the year ended December 31, 2009, our principal distribution subsidiaries and affiliates sold 63,789 GWh of electricity.  For more information on energy sales by our distribution subsidiaries for the past five fiscal years, see Item 3. Key Information  A. Selected Financial Data.  Currently, Chilectra is the technical operator of Edesur, Edelnor, Ampla and Coelce.  Chilectra  Chilectra is one of the largest electricity distribution companies in Chile as measured by the number of regulated clients, distribution assets and energy sales. Chilectra had consolidated operating income of Ch$ 129 billion for the year ended December 31, 2009.  Our economic interest in Chilectra is 99.1%.  Chilectra operates in a concession area of 2,118 square kilometers.  Chilectra transmits and distributes electricity in 33 municipalities of the Santiago Metropolitan Region.  Its service area is defined primarily as a high density area under the Chilean tariff regulations governing electricity distribution companies and includes all residential, commercial, industrial, governmental and toll customers.  The Santiago Metropolitan Region is Chiles most densely populated area and has the highest concentration of industries, industrial parks and office facilities in the country.  As of December 31, 2009, Chilectra served approximately 1.6 million customers.  As of December 31, 2009, Chilectra had an economic interest of 9% in Endesa Brasil.  Chilectra holds a 35.6% economic interest in Ampla and a 10.8% in Coelce through Investluz and Endesa Brasil.  Chilectra also owns a 9.4% interest in Codensa in Colombia, a 15.6% interest in Edelnor in Peru, and currently owns a 34.0% interest in Edesur.  There are no operator fees associated with Chilectras involvement in these companies.  Chilectras energy losses were 6.1% in 2009, compared to 5.9% in 2008.  Chilectra has implemented proprietary billing and accounts receivable management systems, increased labor productivity and improved information systems.  For the fiscal year ended December 31, 2009, residential, commercial, industrial and other customers, who are primarily public and municipal, represented 26%, 28%, 23% and 23%, respectively, of Chilectras total energy sales of 12,585 GWh.  For the five-year period ended December 31, 2009, physical energy sales increased at a compounded annual rate of 1.5%.  For the year ended December 31, 2009, revenues from electricity sales were Ch$ 1,002 billion.  Edesur  Edesur is the second largest electricity distribution company in Argentina as measured by energy purchases.  Our economic interest in Edesur is 65.4%.  Edesur operates in a concession area of 3,309 square kilometers.  Edesur distributes electricity in the south-central part of the greater Buenos Aires metropolitan area.  Its service area comprises the major business district of Buenos Aires and several residential areas of the southern part of Buenos Aires.  As of December 31, 2009, Edesur distributed electricity to 2.3 million customers.  Residential, commercial, industrial and other customers, primarily public and municipal, represented 41%, 26%, 8% and 24%, respectively, of Edesurs total energy sales.  It had energy losses of 10.5% in 2009, compared to 10.6% in 2008.  For the year ended December 31, 2009, revenues from electricity sales amounted to Ch$ 297.4 billion.  In 2009, Edesurs physical energy sales amounted to 16,026 GWh, increasing at a compounded annual rate of 3.4% during the 2005-2009 period.  Ampla  Ampla is the second largest electricity distribution company in the State of Rio de Janeiro, Brazil.  As of December 31, 2009, we had a 70.2% economic interest in Ampla.  Chilectra is Amplas technical operator but does not receive any fees for such role.  Ampla is engaged mainly in the distribution of electricity to 66 municipalities of the State of Rio de Janeiro and serves 2.5 million customers in a concession area of 32,615 square kilometers, where an estimated 8.0 million people live.  As of December 31, 2009, residential, commercial, industrial and other customers represented 38%, 19%, 11% and 31%, respectively, of Amplas total sales of 9,394 GWh, increasing at a compounded annual rate of 3.5% during the 2005-2009 period.  For the year ended December 31, 2009, revenues from electricity sales amounted to Ch$ 821.3 billion.  As of December 31, 2009, Amplas energy losses were 21.2% compared to 20.2% in 2008.   44


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Coelce  We hold a 35.3% economic interest in Coelce, the sole electricity distributor in the State of Ceará, in northeastern Brazil through a 60.1% interest in Investluz, which owns 56.6% of the capital stock of Coelce.  Chilectra is Coelces technical operator but does not receive fees for such role.  As of December 31, 2009, Coelce served over 3.0 million customers within a concession area of 148,825 square kilometers.  During 2009, Coelce had annual sales of 7,860 GWh of energy, increasing at a compounded annual rate of 4.5% during the 2005-2009 period.  These sales represented Ch$ 640.0 billion.  Coelce has a relatively stable customer base with residential customers representing 33% of energy sold.  In 2009, Coelce bought 33% of its energy from Endesa Fortaleza, 24% from CCEARs, 20% from Furnas, 15% from CHESF and 8% from other suppliers.  As of December 31, 2009, residential, commercial, industrial and other customers represented 33%, 19%, 17% and 30%, of Coelces total energy sales.  As of such date, Coelces energy losses were 11.6% compared to 11.7% in 2008.  Codensa  Lastly, in the framework of the sale process of state owned distribution companies, EEB and Codensa, formed a public vehicle called DECA, with EEB holding 51% of the capital and Codensa the remaining 49%. The government awarded DECA an 82% shareholding inEmpresa de Energía de Cundinamarca S.A.  We hold a 21.7% economic interest in Codensa, and due to a shareholders agreement, we have the right to appoint the majority of the Board members and, therefore, control this company.  Codensa is an electricity distribution company that serves a concession area of 18,217 square kilometers in Bogotá and 96 other municipalities in the Department of Cundinamarca, Tolima and Boyacá.  More than 9.6 million people, or 23% of the Colombian population, live in Codensas service area, where it serves approximately 2.5 million customers.  For the year ended December 31, 2009, revenues from electricity sales amounted to Ch$ 585 billion.  During 2009, Codensas annual sales reached 12,144 GWh, increasing at a compounded annual rate of 4.9% during the 2005-2009 period.  Of these sales, residential, commercial, industrial and other customers represented 36%, 16%, 6% and 41%, respectively.  Codensa purchased 55% of its energy in 2009 from Emgesa, a generating company controlled by Endesa Chile, and 45% from other suppliers.  Since 2001, Codensa only services regulated clients.  The unregulated market is serviced directly by our generation company, Emgesa, with the exception of the public lighting in Bogotá.  In 2009, Codensa had energy losses of 8.4%, compared to 8.1% in 2008.  Edelnor  Edelnor is a Peruvian electricity distribution company of which 60% is owned by Distrilima.  As of December 31, 2009, we owned an equity interest of 55.9% in Distrilima which represents a 33.5% interest in Edelnor.  Chilectra is Edelnors operator but does not receive any fees for such role.  Edelnor operates in a concession area of 2,440 square kilometers.  For the year ended December 31, 2009, the company had revenues from electricity sales of Ch$ 277.4 billion.  Edelnor has an exclusive concession to distribute electricity in the northern part of the Lima metropolitan area, some provinces of the Lima department such as Huaral, Huaura, Barranca and Oyón, and in the adjacent province of Callao.  As of December 31, 2009, Edelnor distributed electricity to approximately 1.1 million customers, an increase of 3.2% from December 31, 2008.  For the year ended December 31, 2009, Edelnor had total energy sales of 5,716 GWh.  The compounded annual growth rate in energy sales for the 5-year period from 2005 to 2009 was 6.0%.   45


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Edelnor had energy losses of 8.1% in 2009, compared to 8.2% in 2008.  Non-Electricity Businesses  Non-electricity business represented less than 4% of our 2009 operating revenues and less than 1% of our 2009 operating income, both before consolidation adjustments.  Compañía Americana de Multiservicios (CAM)  CAM is a wholly-owned subsidiary that represented around 2.2% of our 2009s operatingrevenues before consolidation adjustments.  CAM is engaged in the electrical parts procurement business and is the entity in charge of providing continuity to our engineering and electrical service activities, both in Chile and abroad, and concentrates on managing large-scale services for public utility companies, especially in the electricity, telecommunications, gas and water distribution sectors.  During the last quarter of 2009, the Board of Directors of Enersis authorized CAMs sale because it was considered a non core business. The sale process includes at first a market research and the hiring of a financial advisor to provide assistance in the sale process, so that, upon offers being received, final decision about the sale and its specific conditions will be submitted to the Board. As of the date of this report, certain offers have been received, but the Company is still searching for potential buyers.  Synapsis  Synapsis is a wholly owned subsidiary that represented 1.2% of our 2009s operatingrevenues before consolidation adjustments.  It is engaged in the information system business.  Synapsis provides IT solutions (outsourcing, hardware, data center, consulting) to the services, energy, telecommunications and public administration markets.  Inmobiliaria Manso de Velasco (IMV)  IMV, a wholly owned subsidiary, develops real estate projects in Chile and represented less than 0.5% of our 2009 operating revenues before consolidation adjustments.  ELECTRICITY INDUSTRY REGULATORY FRAMEWORK  Chile  Industry Structure  The electricity industry in Chile is divided into three business segments: generation, transmission and distribution.  The generation segment consists of companies that produce electricity.  They sell their production to distribution companies, unregulated customers, or to other generation companies.  The transmission segment consists of companies that transmit at high voltage the electricity produced by generation companies.  Finally, the distribution segment is defined for regulatory purposes to include all electricity supply to final customers at a voltage no higher than 23 kV.  The electricity sector in Chile is regulated pursuant to Decree with force of Law No. 4 of 2006, as amended, known as the Chilean Electricity Law.  In Chile there are four separate interconnected electricity systems.  The main systems that cover the most populated areas of Chile are theSistema Interconectado Central,orSIC, that services the central and south central part of the territory, where 93% of the Chilean population lives, and theSistema Interconectado del Norte Grande, or SING, which operates in the northern part of the country, where most of the mining industry is located.  According to the 2002 census, 6.1% of the Chilean population lives in the territory serviced by the SING.  In addition to the SIC and the SING, there are two isolated systems in southern Chile that provide electricity in remote areas.  The operation of electricity generation companies in each of the two major interconnected electricity systems is coordinated by their respective dispatch center,(CDEC), an autonomous entity that involves industry groups, transmission companies and large customers.  CDECs coordinate the operation of their system as efficient markets for the sale of electricity, in which the lowest marginal cost producer is usually used to satisfy demand.  As a result, at any specific level of demand, the appropriate supply will be provided at the lowest possible cost of production available in the system at any moment.   46


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Chilean Electricity Law  General  The goal of the Chilean Electricity Law is to provide incentives to maximize efficiency and to provide a simplified regulatory scheme and tariff‐setting process which limits the discretionary role of the government by establishing objective criteria for setting prices.  The expected result is an economically efficient allocation of resources.  The regulatory system is designed to provide a competitive rate of return on investment to stimulate private investment, while ensuring the availability of electricity service to all who request it.  Three governmental entities have primary responsibility for the implementation and enforcement of the Chilean Electricity Law.  Twice a year (in April and October), the CNE calculates thePrecio de Nudo(node price), or energy and capacity regulated prices that distribution companies pay to generators.  In 2005, bid processes were introduced for distribution companies energy supply, and therefore after 2010 the energy node price will be necessary only to set the maximum offer price for each energy bid to regulated customers.  The CNE also prepares the Indicative Plan, a ten‐year guide for the expansion of the generation and transmission system.  The SEFsets and enforces the technical standards of the system and the proper compliance with the law.  In addition, the Ministry of Energy was created in 2009.  The Ministry grants final approvals for tariffs and node prices set by the CNE, and regulates the granting of concessions to electricity generation, transmission and distribution companies.  Companies engaged in generation must coordinate their operations through the pertinent CDEC in order to minimize the operating costs of the electricity system and monitor the quality of service provided by the generation and transmission companies.  Generation companies satisfy their contractual sales requirements with dispatched electricity, whether produced by them or purchased from other generation companies in the spot market.  The principal purpose of a CDEC in operating the dispatch system is to ensure that only the most efficiently produced electricity is dispatched to customers.  Sales by Generation Companies to Unregulated Customers  Sales by generation companies may be made to final unregulated customers or to other generation companies under contracts with freely determined terms.  To balance their contractual obligations with their dispatch, generators have to trade deficit and surplus electricity at the spot market price, which is set hourly by each CDEC, based on the marginal cost of production of the next kWh to be dispatched.  Sales to Distribution Companies and Certain Regulated Customers  Regulated customers are those with a maximum consumption capacity not exceeding 0.5 MW. Customers between 0.5 and 2 MW may choose their status as regulated or unregulated.  Customers with capacity needs over 2 MW are unregulated.  Historically, sales to distribution companies for resale to regulated customers have been made through contracts at regulated prices (node prices) in effect at the relevant locations (or nodes) on the interconnected system through which such electricity is supplied.  Nevertheless, since 2005 all new contracts between generation and distribution companies for the supply to regulated customers must arise from international bids which have a maximum offer energy price based on the average price paid by the unregulated customers at the time that the bid is made, which is calculated twice a year by the CNE.  If a first bid is unsuccessful, authorities may increase this maximum price by an additional 15%.  The bids are awarded on a minimum price basis.  The price associated with these bids will be transferred directly to final customers, replacing the current regulated price regime.  During the life of the contract, the energy and capacity prices will be indexed according to formulas set forth in the bid documentation and linked to fuel, investment and other costs of energy generation.  Under the bid system, all distribution companies will have electricity contracts from 2011 onwards.  Distribution companies may also pay for their capacity consumption at the capacity node price determined by the CNE, and calculated based on the marginal cost of increasing the existing capacity of the electricity system with the least expensive dispatch by any generating facility.  International Bids for Supplying Regulated Customers  The first international auction for the supply to distribution companies regulated customers took place in 2006.  This auction met 100% of the energy needs required by participating distribution companies.  During 2008, Chilectra launched a bidding process for the supply of its regulated customers and contracted a total of 1,800 GWh from 2011 onwards.  During 2009, Chilectra did not launch any bidding process.  With its existing contracts, Chilectra is expected to meet the demand of its regulated customers until 2013.   47


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Sales of Capacity to Other Generation Companies  Each CDEC annually determines a firm capacity for each power plant.  Firm capacity is the highest capacity which a generator may supply to the system at certain peak hours, taking into consideration statistical information regarding the time it is out of service for maintenance and extremely dry conditions for the operation of hydroelectric plants.  A generation company may be required to purchase or sell capacity in the spot market at any time, depending upon its contractual requirements in relation to the amount of electricity to be dispatched from such company and to its firm capacity.  Transmission  Since transmission assets are built pursuant to concessions granted by the government, the law requires a company to operate on an open access basis, in which users may obtain access to the system by contributing towards the costs of operating, maintaining and, if necessary, expanding the system.  Transmission companies recover their investment in transmission assets through tolls, or wheeling rates, which are charged to generation companies and final customers in the proportion 80% to generators and 20% to final customers.  Transmission tariffs are determined every four years by a decree of the Ministry of Energy.  Subtransmission  On January 9, 2009, the Ministry of Economy enacted a decree that established subtransmission tariffs that will last through October 2010.  The process for the new subtransmission tariffs is under way and will cover the period for the following four years beginning in November 2010.  Distribution Tariffs to Final Customers  The tariffs charged by distribution companies to final customers are determined by the sum of the cost of electricity purchased by the distribution company, a transmission charge and the value added by the distribution network, or VAD, which allows distribution companies to recover their operating costs.  The price for both generation and distribution capacity sold to customers includes a factor which reflects the simultaneous contribution of each customer to peak capacity demand of the system as a whole.  The transmission charge reflects the cost paid for electricity transmission and transformation.  The VAD includes an allowed return on investment.  VAD Rates  The VAD is based on a model company and includes: selling, general and administrative distribution costs; maintenance and operating costs of distribution assets; energy cost and losses; and an expected return on investment, before taxes, of 10% per year in real terms based on the replacement cost of assets used for distribution.  To this end, the CNE selects a company, to which it applies efficiency guidelines which results in a cost structure for the model company for each Typical Distribution Area, as described below.  The rate is not based on actual costs incurred by any given distribution company, but on investment, operating, maintenance and general administrative standards and overall efficiency of operations for the model company, which is used as a benchmark.  Distribution Tariff-Setting Process  The VAD is set every four years.  The CNE classifies companies into groups, according to Typical Distribution Areas, based on economic factors that group companies with similar distribution costs due to population density, which determines equipment density in the network.  Actual return on investment for a distribution company depends on its performance relative to the standards chosen by the CNE for the model company.  The tariff system allows for a greater return to distribution companies that are more efficient than the model company.  Tariff studies are performed by the CNE and distribution companies.  Tariffs are estimated as a weighted average of the results of the CNE-commissioned study and the companies study, with the results of the CNEs study bearing twice the weight of the companies results.  Preliminary tariffs are tested to ensure that they provide an average actual annual internal rate of return between 6% and 14% on the replacement cost of electricity‐related assets for the entire distribution segment.  48


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The last process for setting distribution tariffs was held in 2008, and will be in effect until November 3, 2012.  Associated electrical services  Along with the VAD rate process for 2008, the CNE published a report on associated electrical services.  Agents, generation, transmission and distribution companies submitted their comments.  Final rates were published on December 4, 2009.  Concessions  The law permits generation activity without a concession.  However, companies may apply for a concession to facilitate access to third‐party properties.  Third‐party property owners are entitled to compensation, which may be agreed to by the parties or, if there is no agreement, may be determined by an administrative proceeding that may be appealed in the Chilean courts.  Finesand Compensations  If a rationing decree is enacted in response to prolonged periods of electricity shortages, severe penalties may be imposed on generation companies that contravene the decree.  A severe drought is not considered aforce majeureevent.  Generation companies may also be required to pay fines to the regulatory authorities, related to system blackouts due to any generators operational mistake, including failures related to the coordination duties of all system agents as well as to make compensatory payments to electricity consumers affected by shortages of electricity.  If generation companies cannot satisfy their contractual commitments to deliver electricity during periods when a rationing decree is in effect and there is no energy available to purchase in the system, the generation company must compensate the customers at the failure cost determined by the authority in each tariff setting.  Distribution companies may be required to compensate final customers if there are shortages of electricity that exceed the authorized standards.  These compensatory payments shall be at an amount equal to double the non‐supplied energy at failure cost.  Environmental Regulation  The Chilean Constitution grants all citizens the right to live in a pollution-free environment.  It further provides that other constitutional rights may be limited in order to protect the environment.  Chile has numerous laws, regulations, decrees and municipal ordinances that may raise environmental considerations.  Among them are regulations relating to waste disposal (including the discharge of liquid industrial wastes), the establishment of industries in areas in which they may affect public health, and the protection of water for human consumption.  Environmental Law No. 19,300 was enacted in 1994 and implemented by several rules, such as Environmental Impact Assessment System Rule issued in 1997 and modified in 2001.  This law requires companies to conduct environmental impact study or declaration of any future generation or transmission projects.  Recently, as of January, 2010, Law No. 19,300 was modified by Law No. 20,417, introducing changes in the environmental assessment process and in the public institutions involved in it.  Consequently, environmental assessment process is coordinated by the Environmental Assessment Service, and not by Chilean Environmental Commission, or Conama, that was repealed.  Endesa Chile applies the guidelines of the new law when analyzing the development of future projects.  On April 1, 2008, Law No. 20,257, which is an amendment to the General Services Law,was enacted.  The purpose of the amendment is to promote the use of NCRE.  This law defines the different types of technologies considered as NCRE, and establishes the obligation of generators between 2010 and 2014, to supply 5% of the total energy contracted from August 31, 2007, to be of such type, and to progressively increase this percentage 0.5 percentage points annually up to 10% as of 2024.  Currently, our power plants recognized as NCRE generators are Palmucho, Canela wind farms and Ojos de Agua.  Additionally, the law sets forth fines for the generators that do not comply with this obligation.  Endesa Chile estimates that it will be able to fully comply with this obligation in 2010 and generate excess energy with NCRE, with the capacity to sell the surplus to other generators.  The additional cost of generating with NCRE will be charged as a pass‐through in the new contracts, thus eliminating the impact to our revenues.  49


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Water rights  Endesa Chile owns indefinite term, unconditional and absolute property water rights granted by the Chilean Water Authority.  Chilean generation companies must pay an annual fee for unused water rights.  License fees already paid may be recovered through monthly tax credits commencing on the start‐up date of the project associated to the water right considered.  The maximum license fees to be recovered are those paid during the 8 years before the start‐up date. As of the date of this report, Endesa Chile has not recovered any license fee already paid.  During 2009, we paid Ch$ 2,699 million ($ 5.3 million) associated with 2008 water rights located in the SIC area.  This amount may vary in the future according to the actual water rights we may hold each year.  Endesa Chile continuously analyzes which water rights it will maintain, disregard or acquire.  We estimate that in 2010 we will pay fees for $ 5.3 million.  We expect that if we do not abandon any water rights in the SIC, we will have to pay license fees aggregating to no more than $ 5.5 million per year through December 2011.  Thereafter, the water rights law requires an annual fee that will be doubled and will thereafter remain flat for five years, at which point the license fee will be doubled once again.  In the case of water rights located in the extreme south of Chile, outside the area comprised by the SIC, the license fees will be paid starting as of January 1, 2012, even though, Endesa Chile does not and will not have any water rights in that area.  Argentina  Introduction  Law No. 15,336 of 1960 and Law No. 24,065 of 1992 (together, the Argentine Electricity Act) set the regulatory framework for the electricity sector.  Under the Argentine Electricity Act, the Federal Government:  ·Divided the electricity industry into three business segments: generation, transmission and distribution, to enable the electric market development under conditions of free competition for generation with reduced tariffs, requirements regarding quality standards, and restrictions to ownership concentration;  ·Created theMercado Eléctrico Mayorista(Wholesale Electricity Market) or MEM where four categories of agents (generators, transmitters, distributors and large customers) are allowed to buy and sell electricity as well as related products;  ·Imposed theCompañía Administradora del Mercado Mayorista Eléctrico(Administrative Company for the Wholesale Electricity Market) or Cammesa, responsible for the dispatch coordination, the administration of the agents transactions in the MEM and the calculation of the spot prices.  The agents participate in Cammesa as shareholders through their corresponding associations with the Secretariat of Energy, the owner of the remaining 20% of the capital stock.  The Ministry of Federal Planning, Public Investment and Services appoints the Cammesa chairman; and  ·Created theEnte Nacional Regulador de la Electricidad(Electricity National Regulatory Agency) or ENRE, in charge of regulating public service activities in the electricity sector and imposing jurisdictional decisions.  The Ministry of Federal Planning, Public Investment and Services, through the Secretariat of Energy, is primarily responsible for the implementation of the Argentine Electricity Act. Among the main tasks, the Secretariat regulates the system dispatch and the activities in the MEM, and grants the concessions or authorization for each activity in the electricity sector. The Secretariat of Energy is also responsible for policy setting in the oil and natural gas sector, with its direct impact on thermal generators and the electricity sector.  Industry structure  The generation sector is organized on a competitive basis, with independent generators selling their output on the MEMs spot market or through private contracts to purchasers on the MEMs contract market.  Transmission is a public service that works under monopoly conditions by several companies to whom the Federal Government grants concessions.  One concessionaire operates and maintains the highest voltage facilities and eight concessionaires operate and maintain high and medium voltage facilities, to which facilities of the generation plants, distribution systems and large customers are connected.  The international interconnected transmission systems also require concessions granted by the Secretariat of Energy.  Transmission companies are authorized to charge different tolls for their services.  50


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Distribution is a public service that works under monopoly conditions and is provided by companies who have also been granted concessions.  Distribution companies have the obligation to make electricity available to the final customers within a specific concession area, regardless of whether the customer has a contract with the distributor or directly with a generator.  Accordingly, these companies have regulated tariffs and are subject to quality service specifications.  Distribution companies may obtain electricity either in the MEMs spot market at a price called seasonal price, or in the MEMs  term market through private contracts with generators.  The seasonal price, defined by the Secretariat of Energy, is the cap for the costs of electricity bought by distributors and passed through to regulated customers.  There are three electricity distribution areas subject to federal concessions.  The concessionaires are Edelap, Edesur and Edenor.  The local distribution areas are subject to concessions granted by the provincial or municipal authorities.  However, all distribution companies acting in the MEM must operate under its rules.  Regulated customers are supplied by distributors at regulated tariffs, unless they have a minimum capacity demand of 30 kW, in which case they can choose to contract their supply directly from generators in the MEM ́s spot market, becoming large customers who may freely negotiate their prices with generating companies.  Traders are also authorized to act as participants in the MEM.  They buy and sell energy and related products from and for agents of the MEM, including electricity royalty payments received by the provinces.  No generator, distributor, large user, nor any company controlled by any of these or controlling the same, may be either owner or a major shareholder of a transmission company or of its controlling companies.  At the same time, transmission companies are prohibited from generating, distributing, purchasing and/or selling electricity. Distribution companies are prohibited from owning generation units.  Dispatch and Pricing  Cammesa controls the coordination of dispatch operations, the spot prices calculation and the administration of the MEMs economic transactions.  All generators that are MEM agents have to be connected to theSistema Argentino de Interconexión(Argentine Interconnected System) or Argentine NIS and are obliged to comply with the dispatch order to generate and deliver energy to the Argentine NIS, in order to be sold in the spot market or in the term market.  Distribution companies, traders and large users that have entered into private supply contracts with generation companies, pay the contractual price directly to the generator and also pay a toll to the transmission and/or distribution company for the use of their systems.  The spot price is calculated on an hourly basis by Cammesa and must reflect the cost of the marginal kW to be dispatched in the Argentine NIS and is paid to generators and sellers of energy at the spot market.  The Argentine Electricity Act sets that electricity prices in the spot market are determined on a marginal cost basis.  Since 2002, the Secretariat of Energy started to modify several criteria regarding the spot prices and imposed, among other restrictions, caps for the spot prices to be paid to the generators and only recognized for calculations purposes the natural gas costs established by the Federal Government, even though additional costs are collected by the market and paid to the generator.  In order to stabilize the prices for distribution tariffs, the market has a seasonal price as the energy price to be paid by distributors for their purchases of electricity traded in the spot market.  It is a fixed price determined every six months by the Secretariat of Energy after Cammesa recommends the seasonal price level for next period according to its estimated spot price, which is based on its evaluation of the expected supply, demand and available capacity, as well as other factors.  The seasonal price is maintained for at least 90 days. Since 2002, the Secretariat of Energy has been approving seasonal prices lower than those recommended by Cammesa.   51


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Regulatory Developments: the industry after the Public Emergency Law  General  Law No. 25,561, the Public Emergency Law, was enacted in 2002 to manage the public crisis which began that year.  It forced the renegotiation of public service contracts (such as electricity transmission and distribution concession contracts) and imposed the conversion of dollar denominated obligations into Argentine pesos at a pegged rate of Ar$ 1 per $ 1.  It also empowered the Federal Government to implement additional monetary, financial and exchange measures to overcome the economic crisis in the medium term.  These measures have been periodically extended.  In fact, Law No. 26,563, enacted in December 2009, extended the measures until December 31, 2010.  The Secretariat of Energy introduced several regulatory measures aimed to correct the effects of the devaluation into the MEMs costs and prices and to reduce the price to be paid by the final customers.  Generation  The mandatory conversion of transmission and distribution tariffs from dollars to Argentine pesos at the pegged rate of $ 1 per Ar$ 1, when the market exchange rate was approximately $ 1 per Ar$ 3 and the regulatory measures to cap and reduce the spot and seasonal prices hindered the pass through of generation variable costs into the tariffs to final customers.  Resolution SE No. 240/2003 changed the way to fix spot prices, decoupling the spot price calculation from the marginal costs of operation. Until this resolution, spot prices on the MEM were typically fixed by units operating with natural gas during the warm season (from September through April) and units operating with fuel/diesel in the winter (May-August).  Then, due to restrictions on natural gas supply, winter prices were higher, and related to imported fuels priced in dollars. Resolution SE No. 240/2003 seeks to avoid the pegged price indexation to the dollar and, although generation dispatch is still based on actual fuels used, the calculation of the spot price under the Resolution is defined as if all dispatched generation units did not have the existing restrictions on natural gas supply.  Water value is not considered if its opportunity cost is higher than the cost of generating with natural gas.  The resolution also set a cap on the spot price at 120 Ar$/MWh.  The government avoided the increase in electricity tariffs to final customers and seasonal prices were maintained substantially fixed in Argentine pesos, although gas producers received price revisions by the authority, recovering part of the value that they lost with the devaluation.  In this scenario, Cammesa sells energy to distributors who pay seasonal prices, and buys energy from generators at spot prices that recognize rising gas price. To overcome this unbalance, the authority  through Resolution SE N° 406/2003  only allows payments to generators for amounts collected from the purchasers in the spot market. This Resolution set a priority of payment for different services: capacity payment, fuel cost, energy sales margin, etc.  Cammesa accumulates debt with generators, and the system gives an incorrect price signal to the agents, by not encouraging savings in electricity consumption as well as investments to satisfy the growth in electricity demand, including investments in transmission capacity.  Additionally, the generators suffer a reduction of estimated income from contract prices because they are reduced as a consequence of the spot price level.  The obligation to settle the unpaid spot electricity with generators led authorities to fund investments in new capacity within the MEM, though Foninvemem, a fund managed by Cammesa.  Funds in the Foninvemem have been used to install two combined cycle generation plants of 850 MW each.  In order to enhance the energy supply the Secretariat of Energy created different schemes to sell more reliable energy. Resolution 1,281/2006 created the Energy Plus Service, which is the offer of new electricity capacity to supply the growth in electricity demand, over the Base Demand, which was the demand for electricity in 2005.  The Energy Plus Service is supplied by generators that install new capacity or that offer existing generation capacity not connected before to the NIS.  All large customers that, as of November 1, 2006, had a higher demand than their Base Demand, had to contract excess demand with the Energy Plus Service.  The consumption that exceeded the Base Demand without a contract to supply should pay additional amounts for the surplus energy.  The price of the contracts for Energy Plus Service have to be approved by the relevant authorities.  Consumption of unregulated customers that could not be secured by an Energy Plus Service contract, could request Cammesa to conduct an auction to satisfy their demand.  Resolutions SE No. 220/2007 and No. 724/2008 gives thermal generators the opportunity to reduce some of the adverse effects of Resolution SE No. 406/2003 by entering into MEM Supply Commitment Contract or CCAM.  Generators can commit maintenance or repowering investments to improve their units availability and add additional capacity to the system. After authorization, the generator can sign a CCAM at prices that permit the recovery of capital expenditures.  Additionally, energy sales through a CCAM receive payment priority compared with spot energy sales (Res. No. 406/2003).  Generators with a CCAM can supply energy to Cammesa for up to 36 months, renewable only for an additional period of six months.   52


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During 2009, Resolution SE No. 762 created the Hydroelectric National Program to promote the construction of new hydro plants. The program enables authorized generators to subscribe energy supply contracts with Cammesa for up to fifteen years, at prices that allow for an investment recovery.  The Federal Government has adopted several other measures to promote new investments, including auctions to expand the capacity of natural gas transportation and of electricity transmission, the implementation of certain projects for the construction of power plants, and the creation of fiduciary funds to finance these expansions.  Law No. 26,095 of 2006 created specific charges that must be paid by final customers to finance new electricity and gas infrastructure projects.  The Federal Government has also enacted some regulations to promote the rational and efficient use of electricity.  Foninvemem  Resolution SE No. 712/2004 created Foninvemem, a fund whose purpose is to increase electricity capacity/generation within the MEM.  Pursuant to Resolution SE No. 406/2003, the Secretariat of Energy decided to pay the generators the spot prices up to the amount available at a stabilization fund, after collecting the funds from the purchasers in the spot market at seasonal prices, lower than spot prices for the same period.  Foninvemem would receive the differences between spot prices and payments to sellers, according to Resolution SE No. 406/2003, from January 1, 2004 to December 31, 2006.  Cammesa was appointed to manage the Foninvemem.  Pursuant to Resolution SE No. 1,193/2005 all private generators in the MEM were called to participate in the construction, operation and maintenance of the electric energy generation plants to be built with the Foninvemem, consisting of two combined cycle generation plants of 850 MW each.  These power plants are powered by natural gas or alternative fuels.  Through Resolutions SE No. 1,427/2004 and Resolution SE No. 1,193/2005 the authorities committed to return to the original way of calculating spot prices and to authorize seasonal prices according to those calculated by Cammesa, when such electricity generation plants started operations.  Because of the insufficient resources to conclude the plants, Resolution SE No. 564/2007 gathered all the MEMs private sector generators to commit to Foninvemem by including the differences between spot prices and payments made pursuant to Resolution SE No. 406/2003 for an extra period ending December 31, 2007.  Since the contribution of generators was only a right to charge, the actual cash flow to complete the construction came mainly from the fiscal budget.  Transmission and distribution  Transmission and distribution companies have been renegotiating contracts since 2005 and although tariffs were partially and temporarily established, definitive tariffs are still pending.  As a result, although the terms to define energy prices pursuant to the Argentine Electricity Act are still in force, their implementation reflects the measures taken by the authorities that reduce compensation for all electricity companies.  During 2006, our subsidiary Edesur entered into an Agreement for Renegotiation of Concession Contract.  This Agreement established among several conditions, a transitional tariff regime, a regime for the quality of service, and an Integral Rate Revision Process (RTI) to be implemented by ENRE according to Law No. 25,561.  This would set conditions for a new tariff regime for a period of five years.  Under the framework of the RTI process, Edesur presented to ENRE in December 2009 its Tariff Proposal, as well as the support studies, according to requirements established by the regulator in Res. ENRE 467/08.  As of the date of this report, ENRE has not defined new tariffs, and maintains in force the transitional tariff regime.   53


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Natural gas market  Final customers demand for natural gas has a peak during winters. During this season, there have been natural gas shortages to supply power plants for several years.  In order to assure internal supply, thermal generators consume alternative fuels, such as diesel and fuel oil.  Since 2002, the lack of investment in natural gas production obliged the system to burn increasing amounts of liquid fuels.  In 2004, the Argentine government entered into an agreement with Venezuela to guarantee fuel oil supply until 2010.  To improve the natural gas supply, the government has adopted different actions. In 2006, Argentina and Bolivia entered into a 20-year agreement under which Argentina has the right to receive up to 28 million cubic meters daily. In the winters of 2008 and 2009, various regasification ships arrived at Bahía Blanca with LNG for the system.  Since 2004, gas producers and the government have subscribed several agreements to guarantee gas supply at rising prices. In July 2009, the last agreement was signed incorporating a 30% increase in the gas tariff to power producers until December 2009.  One of the measures related to natural gas in recent years was the creation of the Electronic Gas Market (MEG).  Through the MEG, the regulatory authorities increased the transparency of physical and commercial operations in the spot market.  Export and Import of Energy  In order to give priority to the internal market supply, the Secretariat of Energy adopted additional measures that restricted electricity and gas exports.  Resolution SE No. 949/2004 established measures that allowed agents to export and import electricity under very restricted conditions.  These measures prevented generators from satisfying their export commitments.  The Secretariat of Energy published Disposition No. 27/2004, together with related resolutions and decrees, which created a plan to ration natural gas exports and the utilization of transport capacity.  These norms implied the beginning of restrictions for gas delivery to Chile and Brazil.  Environmental Regulation  Electricity facilities are subject to federal and local environmental laws and regulations, including Law No. 24,051, or the Hazardous Waste Law, and its ancillary regulations.  Certain reporting and monitoring obligations and emission standards are imposed on the electricity sector.  Failure to satisfy these requirements entitles the government to impose penalties, such as suspension of operations, which, in case of public services, could result in the cancellation of concessions.  Law No. 26,190, enacted in 2007, defined the use of renewable resources for electricity production as a national interest and set an 8% market share for generation from renewable energies as a target.  During 2009, the government took actions to reach this objective launching an international auction to promote the installation of up to 1,000 MW of renewable capacity, publishing Resolution No. 712/2009, which created a mechanism to sell renewable energy through fifteen-year contracts under special price conditions.  Brazil  Industry Structure  Brazils electricity industry is organized into one large interconnected electricity system, which is known as theSistema Interligado Nacional(the Brazilian NIS), which comprises most of the regions of Brazil and several other small, isolated systems.  Generation, transmission and distribution are legally separated activities in Brazil.  According to the specifications set forth in Law No. 9,427/96 unregulated customers in Brazil are currently those customers: (i) who demand at least 3,000 kW and choose to contract the energy supply directly with generators or retailers; or (ii) who demand at least 500 kW (and less than 3,000 kW) and choose to contract the energy supply directly with alternative generators or traders.  54


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The electricity industry in Brazil is regulated by the Federal Government, acting through the Ministry of Mines and Energy, or MME, which has exclusive authority over the electricity sector, and whose primary role is to establish the policies, guidelines and regulations for the sector.  Regulatory policies are implemented by the Brazilian governmental agency for electric energy or ANEEL, whose main responsibilities include, among others: (1) supervision of the concessions for electricity sale, generation, transmission and distribution activities, and approval of electricity tariffs; (2) enactment of regulations for the electricity sector; (3) implementation and regulation of the exploitation of electricity resources, including the use of hydroelectricity; (4) promotion of a bidding process for new concessions; (5) resolution of administrative disputes between electricity sector agents; and (6) setting the criteria and methodology for determining distribution and transmission tariffs.  Other regulatory authorities include: (i) the Brazilian Electricity System Operator (ONS), comprised of generation, transmission and distribution companies, and independent consumers, responsible for the coordination and control of the generation and transmission operations of the Brazilian NIS; (ii) the Electricity Trading Board (CCEE), a company in which agents are gathered in four categories: Generation, Distribution, Trading and Consumers and whose main purpose is to carry out the wholesale transactions and trading of electric power within the Brazilian NIS; and (iii) the Brazilian Energy Policy Council (CNPE) in charge of  developing the national electricity policy.  Deregulation and Privatization  The Concessions Law (No. 8,987) and the Power Sector Law (No. 9,074), both enacted in 1995, intend to promote competition and attract private capital into the electricity sector.  Since then, several assets owned by the Federal Government of Brazil and/or state governments were privatized.  Independent Power Producers and Self-Producers  The Power Sector Law also introduced the concept of independent power producers, or IPPs, in order to open the electricity sector to private sector investment.  IPPs are individual agents or agents acting in a consortium who receive a concession, permit or authorization from the Brazilian government to produce electricity for sale on its own account.  The Concessions Law also provides that, upon receiving a concession, IPPs, self-producers, suppliers and consumers will have access to the distribution and transmission systems owned by other concessionaires, provided that they are reimbursed for their costs as determined by ANEEL.  Law No. 9,648/98 created the wholesale energy market, composed by the generation and distribution companies.  According to this market regulation, the purchase and sale of electricity is freely negotiated.  Pursuant to Law No. 10,433/02, the wholesale energy market structure changed to be closely regulated and monitored by ANEEL, which is also responsible for setting wholesale energy market governance rules including measures to stimulate permanent external investment.  Law No. 10,848/04 seeks to maintain public service for the production and distribution of electricity to consumers within each concession area, restructures planning system, guarantees transparency in the auction and bidding process for public projects to mitigate the systemic risks, to maintain centralized and coordinated operations of the energy system and to grant universal use and access to electricity throughout Brazil, and it also modifies the bidding process of public service concessions.  Structure of the Electricity Sector  The market regulation established pursuant to Laws No. 10,847 and 10,848 seeks to provide cheaper tariffs for consumers and guarantees the expansion of the system, with the Power Research Company, (EPE), a governmental body, responsible for the planning of generation and transmission activities.  This market regulation has defined an unregulated contracting environment and a regulated environment.  In the unregulated contracting environment, the conditions for purchasing energy are negotiable between suppliers and their customers.  Regarding the regulated environment, where distribution companies operate, the purchase of energy must be conducted executed pursuant to a bidding process coordinated by ANEEL.   55


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Pursuant to the market regulation, 100% of the energy demand from distributors must be satisfied through long‐term contracts in advance of the expiration of current contracts in the regulated environment.  Another change imposed on the electricity sector is the separation of the bidding process for existing power and new power project.  The government believes that new power project needs more favorable contractual conditions as long term power purchase agreement (15 years for thermal and 30 years for hydro) and certain price level for each technology.  These agreements promote investment for the required expansion.  On the other hand, existing power which considers depreciated power plants can sell their energy at lower prices in shorter term contracts.  Distribution  The Concessions Law establishes three kinds of revisions to final consumer tariffs: annual tariff resetting, ordinary tariff revision and extraordinary tariff revisions.  Distribution companies pricing aims to maintain a concessionaires operating margins constant by allowing for tariff gains due to costs beyond managements control and permitting the concessionaire to retain any efficiency gains achieved for defined periods of time.  Tariffs to end users are also adjusted according to the variation of costs incurred in purchasing electricity.  Ordinary tariff revision takes into account the entire tariff‐setting structure for the company, including the costs of providing services, the costs of purchasing energy and the return for the investor.  Under their concessions, Coelce is subject to tariff revisions every four years, and every five years for Ampla.  The asset base consists of the market replacement value depreciated during their useful life from an accounting point of view and the rate of return for the assets is based on the Weighted Average Cost of Capital, or WACC, of a model company.  The operating and maintenance costs reflected in the tariff are calculated based on the model company which considers the singular characteristics of the distribution concession area.  The law guarantees an economic and financial equilibrium for a company in the event that there is a substantial change in its operating cost.  In the event that the cost components over which management does not exert influence, such as energy purchases and taxes, increases significantly within the period between two annual tariff adjustments, the concessionaire may make a request to ANEEL to charge those costs to the final customers.  2009 Tariff revision  A tariff revision applicable to Ampla was introduced on March 15, 2009, with an average 0.82% increase in prices for all consumers and a 1.23% decrease for residential customers.  The principal items that were considered by ANEEL were investments planned by Ampla for the period 2009‐2013 for R$ 1.6 billion, and the recognition of investments for the reduction of non‐technical losses.  The portion of controllable costs (named component B in the concession contracts) was also positively affected by the recognition of investments.  A regulatory trajectory for loss reduction was defined, which considers a decline of 0.7% per year.  By March 31, 2009, ANEEL also approved an ordinary tariff revision for Coelce, whose results had been held as provisional since April 22, 2007.  The final repositioning was a tariff decrease of 8.89%.  The tariff revision for Coelce was effective on April 22, 2009.  The average increase in prices for customers was 11.25% in relation to the previous year.  Concessions  Companies or consortia that intend to build or operate hydroelectric generation facilities with a capacity in excess of 30 MW, or transmissions networks in Brazil, have to use a public tender process.  Concessions granted to the holder give the right to generate, transmit or distribute electricity, as the case may be, in a given concession area for a given period of time.  The period of time is limited to 35 years for new generation concessions and to 30 years for new transmission or distribution concessions.  Existing concessions may be renewed at the Brazilian governments discretion, for a period equal to their initial term.   56


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Electricity Sales  In the regulated environment (ACR), electricity distribution companies buy the electricity through bids that are regulated by ANEEL and organized by CCEE.  Distributors must buy electricity at public bids.  There are three types of regulated bids: new energy bids, existing energy bids and adjustment bids.  The government has also the right to call special bids for renewable electricity (biomass, small hydro, solar and wind).  ANEEL and CCEE hold the bids annually.  The contracting system is multilateral, with generating companies entering into contracts with all distributors who call for bids.  Unregulated Environment,or ACL, include the sale of electricity between generation concessionaires, independent producers, self‐producers, sellers of electricity, importers of electricity, unregulated and special consumers.  The ACL also includes contracts in place between generators and distributors until their expiration, at which point new contracts may be entered into under the terms of the new regulatory framework.  Hydroelectrical Energy Reassignment  Brazil created a special mechanism to share hydrological risk between all hydro generators, called Reallocating Energy Mechanism(MRE).  Each hydro power plant has an assigned energy certificate which defines both the proportion of the total generated hydro energy owned by this plant and the maximum energy amount that this plant can sale through contracts.  Differences between actual production and the assigned energy must be traded at a regulated fixed tariff (approximately $ 4/MWh).  Settlement Spot Price  The spot price is used to value the purchase and sale of electric power in the short term market.  According to the law, CCEE is responsible for the setting of the electricity price in the spot market.  Fines applicable to agents in the electricity industry  Selling agents are responsible to the buying agent for payments if they are unable to satisfy their delivery obligations.  ANEEL regulation sets forth the fines applicable to electricity agents based on the nature and the materiality of the violation (including warnings, fines, temporary suspension of the right to participate in bids for new concessions, licenses or authorizations and forfeiture).  For each violation, fines may be imposed for up to 2.0% of the concessionaires revenues arising from the sale of electricity and services provided (net of taxes) in the 12‐month period immediately preceding any assessment notice.  ANEEL may also impose restrictions on the terms and conditions of agreements between related parties and, in extreme circumstances, terminate such agreements.  A party defaulting on payment of contributions to subsidy funds for the promotion and development of the electricity sector or any other payments due by virtue of the purchase of electricity in the ACR or from Itaipú, cannot use tariff adjustments (except for the extraordinary revision).  Incentives for the Development of Alternative Sources of Energy  Law No. 10,438/02 created certain incentive programs for the use of alternative sources in the generation of electricity (Proinfa).  It assures the purchase of the electricity generated by Eletrobrás for a period of 20 years and financial support from the BNDES.  Other programs include a discount of up to 50% on the distribution or transmission tariffs and a special exception for the consumers with electricity demand of 500 kW to 3,000 kW (special consumers), who decide to migrate to ACL provided that such consumers purchase electricity from generating companies using alternative sources of electricity.  Additionally, the government developed bidding processes for alternative energies (for example, the bidding process for wind projects that was held in December 2009, for 753 MW).   57


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Regulation for introducing smart electronic metering  ANEEL developed during 2009 a regulatory proposal for the substitution of traditional electromechanical meters by electronic meters, which included:  ·A public consultation process, and a consolidation document with the contributions of the agents; ·The elaboration of a plan for the substitution of meters which will be presented at a public hearing during 2010; and ·Preliminarily, ANEEL has indicated some of the principal issues of the substitution plan which would include: a specific regulation, a deployment plan of 10 years, the definition of the basic functionalities of the meters, and a proposed impact in tariffs with a limit of 2% per year.  Law No. 12,111/2009  The government defined that transmission installations for the international exchanges of electricity granted before December 31, 2010, can be assimilated, for technical and commercial effects, as concessionaries of the public service of transmission.  ANEEL will determine the annual allowed income for each agent.  This will allow CIEN to obtain an annual regulated income starting as of 2010, minimizing the risk of its business.  Environmental Regulation  The Brazilian Constitution gives both the federal and state governments power to enact laws designed to protect the environment and to issue regulations under such laws.  While the federal government has power to enact environmental regulations, state governments have the power to enact more stringent environmental regulations.  Most of the environmental regulations in Brazil are at the state and local level rather than at the level of the federal government.  Hydroelectric facilities are required to obtain concessions for water rights and environmental approvals.  Thermal electricity generation, transmission and distribution companies are required to obtain environmental approvals from environmental regulatory authorities.  Colombia  Two pieces of legislation regulate the electricity business in Colombia: Law No. 142 (the Colombian Public Utilities Law) sets the regulatory framework for the supply of public residential services, including electricity, and Law No. 143 (the Colombian Electricity Act) establishes the framework for the generation, trading, transmission and distribution of electricity.  Law No. 142 states that the provision of electricity is an essential public service that must be provided by government and private sector entities.  Utility companies are required to ensure continuous and efficient service, facilitate the access of low‐income users to subsidies granted by the government, inform users regarding efficient and safe use of the services, protect the environment, allow access and interconnection to other public service companies and large customers, cooperate with the authorities in the event of an emergency to prevent damage to users, and report to the authority any commercial start‐up of operations.  The Colombian Electricity Act sets out the principles for the electricity industry, which are implemented through the resolutions enacted by the Energy and Gas Regulatory Commission, or CREG.  Such principles are: efficiency (the correct allocation and use of resources and the supply of electricity at minimum cost);  quality (compliance with technical requirements); continuity (continuous electricity supply without unjustified interruptions);  adaptability (the incorporation of modern technology and administrative systems to promote quality and efficiency); neutrality (impartial treatment to all electricity consumers); solidarity (the provision of funds by high‐income consumers to subsidize the subsistence consumption of low‐income consumers); and fairness (an adequate and nondiscriminatory supply of electricity to all regions and sectors of the country).  The Colombian Electricity Act regulates the generation, trading, transmission, and distribution (the Activities) of electricity.  Under the law, any company, domestic or foreign, may undertake any of the Activities.  New companies, however, must engage exclusively in one of the Activities.  Trading can be combined with either generation or distribution.   58


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The market share for generators and traders is limited.  The limit for generators is 25% of the Colombian system Firm Energy.  Firm Energy refers to the maximum electric energy that a generation plant is able to deliver on a continuous basis during a year, in extremely dry conditions; for instance, in the case of theEl Niñophenomenon.  Similarly, a trader may not account for more than 25% of the trading activity in the Colombian NIS.  Limitations for traders take into account international energy sales.  Market share is calculated on a monthly basis and traders have up to six months to reduce their share when the limit is exceeded.  Such limits are applied to economic groups, including companies that are controlled by, or under common control with, other companies.  In addition, generators may not own more than a 25% interest in a distributor, and vice versa.  However, this limitation only applies to individual companies and does not preclude cross‐ownership by companies of the same corporate group.  A generator, distributor, trader or an integrated company,i.e. a firm combining generation, transmission and distribution activities, cannot own more than 15% of the equity in a transmission company if the latter represents more than 2% of the national transmission business in terms of revenues.  A distribution company can have more than 25% of an integrated companys equity if the market share of the last company is less than 2% of the national generation business.  A company created before enactment of Law No. 143 is banned from merging with another company created after Law No. 143.  The Ministry of Mines and Energy defines the governments policy for the energy sector.  Other government entities which play an important role in the electricity industry are: Public Utility Superintendency of Colombia, which is in charge of overseeing and auditing utilities; CREG, which is in charge of regulating the energy and gas sectors; and theMining and Energy Planning Agency, which is in charge of planning the expansion of the generation and transmission network.  CREG is empowered to issue regulations that govern technical and commercial operations and to set charges for regulated activities.  CREGs main functions are to establish conditions for gradual deregulation of the electricity sector toward an open and competitive market, approve charges for transmission and distribution networks and charges for retailing to regulated customers, establish the methodology for calculating and establishing maximum tariffs for supplying the regulated market, establish regulations for planning and coordination of operations of the Colombian NIS and establish technical requirements for quality, reliability and security of supply, and protection of customers rights.  Generation  The generation sector is organized on a competitive basis with companies selling their production on the electricity pool market, the wholesale market, at the spot price or by long-term private contracts with other participants and unregulated customers at freely negotiated prices.  The Colombian NIS is the system formed by generation plants, the interconnection grid, regional transmission lines, distribution lines and consumer loads.  The spot price is the price paid by the participant in the wholesale market for energy dispatched under the direction of the Dispatch National Center (CND).  The hourly spot price paid for energy reflects prices offered by generators in the wholesale marketand the respective supply and demand conditions.  Generators connected to the Colombian NIS can also receive reliability payments which are a result of the Firm Energy Obligation that they provide to the system.  The Firm Energy Obligation (OEF) is a commitment on the part of generation companies backed by its physical resource capable of producing firm energy during scarcity periods.  The generator that acquires an OEF will receive a fixed compensation during the commitment period, whether or not the fulfillment of its obligation is required.  To receive reliability payments, generators have to participate in firm energy bids by declaring and certifying their firm energy.  Until November 2012, the transition period, the firm energy supply for reliability purposes will be assigned proportionally to the declared firm energy of each generator.  Beyond the transition period, the additional firm energy required by the system will be allocated by bids.  The first auction for this period took place in May 6, 2008, where existing generators participated with new generation projects while meeting the established market share limits.  Dispatch and Pricing  The purchase and sale of electricity can take place between generators, distributors acting in their capacity as traders, traders (who do not generate or distribute electricity) and unregulated customers.  There are no restrictions for new entrants into the market as long as the participants comply with the applicable laws and regulations.  The wholesale market facilitates the sale of excess energy that has not been committed under contracts.  In the wholesale market,an hourly spot price for all dispatched units is established based on the offer price of the highest priced generating dispatched unit for that period.  The CND receives price bids each day from all the generators participating in the wholesale market.  These bids indicate prices and the hourly available capacity for the following day.  Based on this information, the CND guided by optimal dispatch principle (which assumes an infinite transmission capacity through the network), ranks the generators according to their offer price, starting with the lowest bid, and establishing the merit order, on an hourly basis, determining which generator will be dispatched the following day to satisfy expected demand.  The price for all generators is set as the most expensive generator dispatched in each hourly period under the optimal dispatch.  This price-ranking system is intended to ensure that national demand, increased by the total amount of energy exported to other countries, will be satisfied by the lowest cost combination of available generating units in the country.  Additionally, the CND performs the planned dispatch, which takes into account the limitations of the network as well as every other condition necessary to satisfy the energy demands expected for the following day, in a safe, reliable and cost-efficient manner.   59


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If a generator delivers less energy than that assigned by the optimal dispatch, it is charged with the average of the market price and their offer prices.  On the other hand, those generators that deliver energy in excess are credited with the difference.  The net value of these restrictions is assigned proportionally to all the traders within the Colombian NIS, according to their demands of energy.  Some generators have initiated legal proceedings arguing that recognized prices do not cover the costs associated with these restrictions.  Since the second half of 2009 and until the date of this report, there have been critical hydrological conditions in Colombia.  Due to this situation, the Ministry of Mines and Energy and CREG enacted various temporarily resolutions to modify the dispatch and pricing rules, in order to prevent a possible deficit during the first half of 2010, the summer season in Colombia.  Export and Import Electricity  Decision CAN 536 of 2002, signed by the countries that participate in the Andean Nations Community (CAN)  Colombia, Ecuador, Bolivia and Peru-, established the general framework for the Subregional interconnection of electrical systems that implied a coordinated economic dispatch of the countries involved in the interconnections.  In this context, in March 2003 the interconnection system between Colombia and Ecuador was inaugurated.  In November 2009, Decision CAN 720 of 2009 was enacted; it replaced transitorily Decision CAN 536 for a maximum period of two years.   Resolutions CREG 160‐2009 and 189‐2009 adapted the regulatory framework in Colombia according to the new Decision.  Transmission  Transmission companies which operate at least at 220 kV compose the National Transmission System, or NTS.  They are required to provide access to third parties on equal conditions and are authorized to collect a tariff for their services.  The transmission tariff includes a connection charge that underwrites the cost of operating the facilities, and a usage charge, which applies only to traders.  CREG guarantees an annual fixed income to transmission companies.  Income is determined by the new replacement value of the networks and equipment, and by the resulting value of bidding processes awarding new projects for the expansion of the NTS.  This value is allocated among the traders of the NTS in proportion to their energy demand.  The expansion of the NTS is conducted according to model expansion plans designed by the Mining and Energy Planning Agency and pursuant to bidding processes opened to existing and new transmission companies, which are handled by the Ministry of Mines and Energy in accordance with the guidelines set by CREG.  Accordingly, the construction, operation and maintenance of new projects is awarded to the company that offers the lowest present value of cash flows needed for carrying out the project.  During 2009, CREG defined a transmission charges methodology. It is expected that new charges for companies will be approved during 2010.   60


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Distribution  Distribution is defined as the operation of local networks below 220 kV.  Any user may have access to a distribution network for which it pays a connection charge.  CREG regulates distribution prices that should permit distribution companies to recover costs, including operating, maintenance and capital costs operating efficiently.  Distribution charges are set by CREG for each company based on the replacement cost of the existing distribution assets, cost of capital, as well as operational and maintenance costs that vary depending on the voltage level.  A new remuneration methodology for the distribution was defined by CREG in 2008 which set the Weighted Average Cost of Capital (WACC) at 13.9% before taxes, for assets operating at 34.5 kV or less, and 13% before taxes for assets operating above 34.5 kV.  CREG also defined a new methodology for the calculation of distribution charges, defining an incentive scheme for administrative, operational and maintenance costs, service quality and energy losses.  During 2009, after auditing the information reported by the companies, CREG defined the new distribution charges applicable from 2009 until 2013.  Trading  The retail market is divided into regulated and unregulated customers.  Customers in the unregulated market may freely contract for electricity supply directly from a generator or a distributor, acting as traders, or from a pure trader.  The unregulated customer market consists of customers with a peak demand of more than 0.1 MW or a minimum monthly consumption of 55 MWh, which for 2009 represented about 31% of the market.  Trading is the resale to final customers of electricity purchased in the wholesale market.  It may be conducted by generators, distributors or independent agents, which comply with certain requirements.  Parties freely agree upon trading prices for unregulated customers.  Trading to regulated customers is subject to the regulated freedom regime under which tariffs are set by each trader using a combination of general cost formulas given by CREG and individual trading costs approved by CREG for each trader.  Since CREG approves limits on costs, traders in the regulated market may set lower tariffs for economic reasons.  Tariffs include, among other things, energy procurement costs, transmission charges, distribution charges and a trading margin.  The tariff formula became effective on February 1, 2008.  The main changes in the new formula are the establishment of a fixed monthly charge, and the introduction of reduction costs of non‐technical energy losses in the trading charges.  In addition, CREG allows the traders in the regulated market to choose tariff options to manage tariff increments.  In order to improve wholesale price formation, CREG is designing a new energy procurement scheme based on long term energy bids, known as Organized Regulated Market or MOR.  The final resolution is expected during the first half of 2010.  Another trading change is the incorporation of an energy derivatives market.In May 2009,Derivexwas created by theBolsa de Valores de Colombia S.A. andXM Compañía de Expertos en Mercados S.A. E.S.P.This company will conduct energy derivatives trading, and is expected to start operations during 2010.  Environmental Regulation  Law No. 99 of 1993 provided the framework for environmental regulation and established the Ministry of the Environment as the authority for determining environmental policies.  The Ministry defines, issues and executes policies and regulations that focus on the recovery, conservation, protection, organization, administration and use of renewable resources.  Therefore, the use of natural resources or any impact to them as a result of any activity or project will require the issuance of permits and environmental licenses and the establishment of environmental management plans.  The law particularly seeks to prevent environmental damage by entities in the energy sector.  Any entity planning to develop projects or activities relating to generation, interconnection, transmission or distribution of electricity which may result in environmental deterioration, must first obtain an environmental license.  According to Law No. 99, generators which have a total installed nominal capacity above 10 MW are required to contribute to the conservation of the environment through a payment for their activities.  Hydroelectric power plants must pay 6% of their energy sales; thermoelectric plants must pay 4% of their energy sales.  This payment is made monthly to the municipalities and environmental corporations where these facilities are located.  61


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Peru  Industry Structure  The main regulations of the Peruvian electricity industry are: the Law of Electricity Concessions (Decree Law No. 25,844) and its ancillary regulations, the Law to Secure the Efficient Development of Electricity Generation (Law No. 28,832), the Technical Regulation on the Quality of the Electricity Supply (Supreme Decree 020‐97), the Electricity Import and Export Regulation (Supreme Decree 049‐2005), the Antitrust Law on the Electricity Sector (Law No. 26,876), Law No. 26,734, which regulates the investments in energy, in addition to the supplementary Law No. 27,699 ofOrganismo Supervisor de la Inversión en Energía y Minería(Energy and Mining Investment Supervisor Authority) or theOsinergmin, the Peruvian regulatory electricity authority, and the regulation for resolution of controversies that arise within this institution.  Some of the characteristics of the regulatory framework are (i) the separation of the three main activities: generation, transmission and distribution; (ii) freedom of prices for the supply of energy in competitive market conditions; (iii) a system of regulated prices based on the principle of efficiency shared with a bidding regime; and (iv) private operation of the interconnected electricity systems subject to the principles of efficiency and quality of service.  There is one interconnected system, the SEIN, and several isolated regional and smaller systems that provide electricity to specific areas.  The Ministry of Energy and Mining, or the MINEM, defines the energy policies, regulates environment matters, and oversees the granting, supervision, maturity and termination of licenses, authorizations and concessions for generation, transmission, and distribution activities.  Osinergmin is an autonomous public regulatory entity that controls and enforces compliance with legal and technical regulations related to electrical and hydrocarbon activities, compliance of the obligations stated in the concession contracts, as well as the preservation of the environment in connection with the development of these activities.  OsinergminsTariff Regulatory Bureauhas the authority topublish the regulated tariffs.  Osinergmin also controls and supervises the bidding processes, required by distribution companies to purchase energy from generators.  TheCommittee of the Economic Operation of the System, or the COES, coordinates the operation and dispatch of electricity of the SEIN and prepares the technical and financial study that serves as a basis for the annual bus bar price calculations, as defined below.  The COES includes as members the generation, transmission and distribution companies, as well as consumers with a capacity demand higher than 200 kW as unregulated customers.  Service provided by electricity companies has to comply with technical standards, otherwise companies may be charged with fines imposed by Osinergmin.  Dispatch and Pricing  The coordination of dispatch operations, the spot prices setting and the administration of the economic transactions in the MEM are controlled by COES.  Generators can sell energy directly to large customers and transfer the deficit or surplus between contracted energy and actual production in the pool at spot price.  Distribution companies and large customers that have entered into private supply contracts with generation companies pay the contractual price directly to the generator and also pay a toll to distribution companies for the use of their systems.  Customers with a capacity demand of less than 200 kW are considered regulated customers, and the supply of their energy is defined as a public service.  Customers whose annual demand is within the range of 200 kW and 2,500 kW are free to choose to be considered regulated or unregulated customers.  Access to the spot market is permitted to generating and distribution companies, as well as to consumers with a contracted capacity in excess of 10 MW.  In 2008, due to gas transport and electricity transmission problems, Osinergmin defined a new rule to calculate spot prices.  Decree 049‐2008 established two calculations, one theoretical dispatch without any restrictions and a real dispatch considering the restrictions.  The spot price is obtained from the theoretical dispatch, and the additional cost of operation associated with the system restrictions are paid to the affected generators, through a mechanism established by the authority.  62


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Generators receive a capacity payment which main component is a resultant of an annual calculation of every power plants firm power.  Every year, Osinergmin sets the power price that defines the total amount to assign to each generator.  Transmission  Transmission lines are divided into principal, those for the common use and trading of all generators; or secondary, those lines that connect a power plant with the system or a substation with a distribution company or a final consumer.  Law No. 28,832, enacted in 2006, defined also guaranteed systems and complementary systems, applicable to projects commissioned after the enactment of that law.  Guaranteed system lines are the result of a public bid and complementary system lines are freely constructed and exploited as private projects.  The principal and guaranteed system lines are accessible to all generators and allow electricity to be delivered to all customers.  The transmission concessionaire receives an annual fixed income and receives tariff revenues and connection tolls reflecting a charge per kW.  The secondary and complementary system lines are accessible to all generators, but are used to serve only certain customers who are responsible for making payments related to their use of the system.  Distribution  The Efficient Development Law (Law No. 28,832) establishes a bidding regime for the acquisition of energy and capacity by distributors establishing a mechanism to determine prices during the life of a contract.  The approval of this mechanism is important to generators, because it establishes a mechanism for determining price for the duration of a contract that is not fixed by the regulator.  The new contracts to sell energy to distribution companies for resale to regulated customers must be made at fixed prices determined by public bids.  Only a small part of the electricity purchased by distribution companies, included in old contracts, is still maintained at bus bar prices.  Bus bar prices are set annually by Osinergmin, and are the maximum prices for electricity purchased by distribution companies that can be transferred to regulated customers, in those contracts.  The electricity tariff for regulated customers includes charges for capacity and energy for generation and transmission (bus bar prices) and for the VAD which considers a regulated return over capital investments, operating and maintenance fixed charges and a standard percentage for energy distribution losses.  In 2009, our subsidiary, Edelnor, successfully conducted three bids and assured its supply contracts until 2013.  Concessions  A concession for electricity generation activity is required when a power plant has an installed capacity in excess of 500 kW.  A concession for electricity generation activity is an agreement between the generator and MINEM,while an authorization is merely a unilateral permit granted by the Ministry.  Authorizations are granted by the MINEM for an unlimited period of time, although their termination is subject to the same considerations and requirements as the termination of a concession under the procedures set forth in the Law of Electrical Concessions (Law No. 25,844) and related regulations.  Cogeneration Regulation  Supreme Decree 037/2006 establishes the basic rules for the use of the energy produced as a result of any industrial activity,i.e., cogeneration plants.  They are eligible to be part of the COES and trade their energy in the SEIN.  Cogeneration is the simultaneous generation of heat and power in a single thermodynamic process.  Environmental Regulation  The environmental legal framework applicable to energy related activities in Peru is set forth in the Environmental Law (Law No. 28,611) and in the Regulation for Environmental Protection regarding Electricity Activities (Supreme Decree 029‐94‐EM).  The MINEM dictates the specific environmental legal dispositions for the activities within the electricity industry, and the Osinergmin is in charge of supervising their application and implementation.  According to the Environmental Law, the Ministry of the Environment (created in May 2008) is in charge of (i) designing the general environmental policies to every productive activity and (ii) establishing the main guidelines of the different government authorities on their specific environmental sector regulations, as its principal duties.  According to a schedule for 2010, the supervisory functions of the application and implementation of the Environmental Law will be transferred from Osinergmin to the new Ministry of the Environment.   63


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Raw Materials  For information regarding Enersis raw materials, please see Item 11(a) and 11(b). Quantitative and Qualitative Disclosures About Market Risk  Commodity Price Risk.  C.            Organizational Structure.  Principal Subsidiaries and Affiliates  The companies listed in the following table were consolidated by us as of December 31, 2009.  In the case of subsidiaries, our economic interest is calculated by multiplying our percentage economic interest in a directly held subsidiary by the percentage economic interest of any entity in the chain of ownership of such ultimate subsidiary.  Principal Subsidiaries and Country of Operations
     
     % Economic
Ownership of
Main Subsidiary
by Enersis
     
     Consolidated
Assets of Each
Main Subsidiary
on a Stand-alone
Basis
     
     Operating Income
of Each Main
Subsidiary on a
Stand-alone Basis(in billion of Ch$ except percentages)Electricity GenerationEndesa Chile (Chile) (1)
     
     60.0
     %
     6,169.3
     
     1,016.9Cachoeira Dourada (Brazil)
     
     54.1
     %
     233.7
     
     50.6Endesa Fortaleza (Brazil)
     
     54.3
     %
     270.8
     
     83.9Electricity TransmissionCIEN (Brazil)
     
     54.3
     %
     478.1
     
     48.0Electricity DistributionChilectra (Chile)
     
     99.1
     %
     1,395.6
     
     129.0Edesur (Argentina)
     
     65.4
     %
     413.2
     
     31.9Ampla (Brazil)
     
     70.2
     %
     1,323.7
     
     187.1Coelce (Brazil)
     
     35.3
     %
     983.7
     
     151.2Codensa (Colombia)
     
     21.7
     %
     1,216.8
     
     199.9Edelnor (Peru)
     
     57.5
     %
     418.6
     
     62.4Other Non-Electricity BusinessesCAM (Chile)
     
     100.0
     %
     106.5
     
     2.3Inmobiliaria M. Velasco (Chile)
     
     100.0
     %
     65.4
     
     6.4Synapsis (Chile)
     
     100.0
     %
     45.8
     
     7.8
 
 (1) Endesa Chile consolidated all generation facilities in Chile, Argentina, Colombia and Peru.  Brazilian facilities are consolidated by Endesa Brasil.  Business and Subsidiaries Description  Enersis controls subsidiaries engaged in the electricity generation and distribution businesses in South America and has wholly-owned subsidiaries that provide support services to related and unrelated companies.  The following chart represents Enersis economic ownership participation in its main operating subsidiaries and affiliates as of December 31, 2009.   64


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ENERSIS (*)  As of December 31, 2009    (*) Interest stake figures were approximated to the first decimal point.  65


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Enersis Simplified Organizational Structure (*) as of December 31, 2009   
 (*) Only principal operating subsidiaries are presented here.  D.            Property, Plants and Equipment.  Property, Plants and Equipment of Generating Companies  A substantial portion of Endesa Chiles cash flow and net income is derived from the sale of electricity produced by its electricity generation facilities.  Significant damage to one or more of Endesa Chiles main electricity generation facilities or interruption in the production of electricity, whether as a result of an earthquake, flood, volcanic activity or any other such cause, could have a material adverse effect on Endesa Chiles operations.  Endesa Chile insures all of its electricity generation facilities against damage from earthquakes, fires, floods and other Acts of God, but not for prolonged droughts which are not consideredforce majeure, and from damage due to third-party actions, based on the appraised value of the facilities as determined from time to time by an independent appraiser.  Based on geological, hydrological and engineering studies, Endesa Chiles management believes that the risk of an event with a material adverse effect is remote.  Claims under Endesa Chile insurance policies are subject to customary deductibles and other conditions.  Endesa Chile also maintains business interruption insurance providing for coverage for failure of any of its facilities for a period of up to 24 months, commencing after the deductible period.    66


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Endesa Chile consolidates revenues from generating companies in Argentina, Colombia and Peru, which involve a total of 25 generation power plants detailed below, which together with the plants in Chile, total 54 power plants.  The insurance coverage taken abroad is approved by the management of each company, taking into account the quality of the insurance companies and the needs, conditions and risk evaluations of each generating facility, and is based on general corporate guidelines.  All insurance policies are purchased from reputable international insurers.  We continuously monitor and meet with the insurance industry to obtain what we believe to be the most commercially reasonable coverage and premiums available in the market.   67


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The following table identifies the power plants that Endesa Chile owns, at the end of each year, and their basic characteristics:  Country/Company
     
     Power Plant Name
     
     Power Plant Type (1)
     
     2007
     
     2008
     
     2009MW
     
     MW
     
     MWArgentinaEndesa Costanera
     
     Total
     
     
     
     2,324
     
     2,324
     
     2,324Costanera Steam Turbine
     
     Steam Turbine/ Gas+ Fuel Oil
     
     1,138
     
     1,138
     
     1,138Costanera Combined Cycle II
     
     Combined Cycle/ Gas+Diesel Oil
     
     859
     
     859
     
     859Central Buenos Aires Combined Cycle I
     
     Combined Cycle/ Gas
     
     327
     (2)
     327
     
     327El Chocón
     
     Total
     
     
     
     1,320
     
     1,328
     
     1,328Chocón
     
     Reservoir
     
     1,200
     
     1,200
     
     1,200Arroyito
     
     Pass-through
     
     120
     
     128
     (3)
     128
     (2)Total Capacity in Argentina
     
     
     
     
     
     3,644
     
     3,652
     
     3,652BrazilCachoeira Dourada
     
     Cachoeira Dourada
     
     Pass Through
     
     665
     
     665
     
     665Endesa Fortaleza
     
     Endesa Fortaleza
     
     Combined Cycle/ Gas
     
     322
     
     322
     
     322Total Capacity in Brazil
     
     
     
     
     
     987
     
     987
     
     987ChileEndesa Chile
     
     Total
     
     
     
     3,034
     
     3,139
     
     3,446Total Hydroelectric
     
     
     
     2,286
     
     2,286
     
     2,290Rapel
     
     Reservoir
     
     377
     
     377
     
     377Cipreses
     
     Reservoir
     
     106
     
     106
     
     106El Toro
     
     Reservoir
     
     450
     
     450
     
     450Los Molles
     
     Pass-through
     
     18
     
     18
     
     18Sauzal
     
     Pass-through
     
     77
     
     77
     
     77Sauzalito
     
     Pass-through
     
     12
     
     12
     
     12Isla
     
     Pass-through
     
     68
     
     68
     
     70
     (4)Antuco
     
     Pass-through
     
     320
     
     320
     
     320Abanico
     
     Pass-through
     
     136
     
     136
     
     136Ralco
     
     Reservoir
     
     690
     
     690
     
     690Palmucho
     
     Pass-through
     
     32
     
     32
     
     34
     (5)Total Thermal
     
     
     
     748
     
     853
     
     1,156Huasco
     
     Steam Turbine/Coal
     
     16
     
     16
     
     16Bocamina
     
     Steam Turbine/Coal
     
     128
     
     128
     
     128Diego de Almagro (6)
     
     Gas Turbine/ Diesel Oil
     
     47
     
     47
     
     47Huasco
     
     Gas Turbine/IFO 180 Oil
     
     64
     
     64
     
     64Taltal
     
     Gas Turbine/ Gas+Diesel Oil
     
     245
     
     245
     
     245San Isidro 2
     
     Combined Cycle / Gas+Diesel Oil
     
     248
     
     353
     
     399
     (2)(7)Quintero
     
     Gas Turbine/ Gas+Diesel Oil
     
     -
     
     -
     
     257
     (8)Pehuenche
     
     Total
     
     
     
     699
     
     699
     
     699Pehuenche
     
     Reservoir
     
     570
     (2)
     570
     
     570Curillinque
     
     Pass-through
     
     89
     
     89
     
     89Loma Alta
     
     Pass-through
     
     40
     
     40
     
     40Pangue
     
     Pangue
     
     Reservoir
     
     467
     
     467
     (2)
     467San Isidro
     
     San Isidro
     
     Combined Cycle / Gas+Diesel Oil
     
     379
     
     379
     
     379Celta
     
     Total
     
     
     
     182
     
     182
     
     182Tarapacá
     
     Steam Turbine/Coal
     
     158
     
     158
     
     158Tarapacá
     
     Gas Turbine/Diesel Oil
     
     24
     
     24
     
     24Endesa Eco
     
     Total
     
     
     
     18
     
     27
     
     87Canela
     
     Wind Farm
     
     18
     
     18
     
     18Canela II
     
     Wind Farm
     
     -
     
     -
     
     60
     (9)Ojos de Agua
     
     Pass-through
     
     -
     
     9
     
     9GasAtacama
     
     Atacama (10)
     
     Combined Cycle / Gas+Diesel Oil
     
     -
     
     390
     
     390Total Capacity in Chile
     
     
     
     
     
     4,779
     
     5,283
     
     5,650ColombiaEmgesa
     
     Total
     
     
     
     2,829
     
     2,895
     
     2,895Guavio
     
     Reservoir
     
     1,213
     
     1,213
     
     1,213Paraíso
     
     Reservoir
     
     276
     
     276
     
     276
     (2)La Guaca
     
     Pass-through
     
     325
     
     325
     (2)
     325Termozipa
     
     Steam Turbine/Coal
     
     236
     
     236
     
     236Cartagena
     
     Steam Turbine/Gas + Diesel Oil
     
     142
     
     208
     (11)
     208Minor plants (12)
     
     Pass-through
     
     96
     
     96
     
     96Betania
     
     Reservoir
     
     541
     
     541
     
     541Total Capacity in Colombia
     
     
     
     
     
     2,829
     
     2,895
     
     2,895PeruEdegel
     
     Total
     
     
     
     1,469
     
     1,467
     
     1,667Huinco
     
     Pass-through
     
     247
     
     247
     
     247Matucana
     
     Pass-through
     
     129
     
     129
     
     129Callahuanca
     
     Pass-through
     
     80
     
     80
     
     80Moyopampa
     
     Pass-through
     
     65
     
     65
     
     65Huampani
     
     Pass-through
     
     30
     
     30
     
     30Yanango
     
     Pass-through
     
     43
     
     43
     
     43Chimay
     
     Pass-through
     
     151
     
     151
     (2)
     151Santa Rosa
     
     Gas Turbine/Diesel Oil
     
     231
     (2)
     229
     (13)
     430
     (14)Ventanilla
     
     Combined Cycle/ Gas
     
     493
     
     493
     
     493
     (2)Total Capacity in Peru
     
     
     
     
     
     1,469
     
     1,467
     
     1,667Consolidated Capacity
     
     
     
     
     
     13,707
     
     14,284
     
     14,851
  68


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(1)
     Reservoir and pass-through refer to a hydroelectric plant that uses a dam or a river, respectively, to move the turbines which generate electricity.Steam refers to the technology of a thermal power plant that uses natural gas, coal, diesel or fuel oil, to produce steam which moves the turbines to generate the electricity.Gas Turbine (GT) or Open Cycle refers to the technology of a thermal power plant that uses either diesel or natural gas to produce gas that moves the turbines to generate the electricity.Combined Cycle refers to the technology of a thermal power plant that uses natural gas, diesel oil or fuel oil to generate gas that moves the turbines to generate electricity then recuperates the gas that escapes from that process to generate steam to move another turbine.Wind Farm refers to the technology that transforms the kinetic energy of wind into electricity.(2)
     Installed capacities certified by Bureau Veritas. (For further details, see   B. Business Overview. Note (2) to table Physical Data per Country)(3)
     In November 2008, the Arroyito power plant increased its installed capacity due to a higher dam elevation.(4)
     In December 2009 the CDEC-SIC recognized an increase in the installed capacity of the Isla power plant, from 68 MW to 70 MW.(5)
     In December 2009, the CDEC-SIC recognized an increase in the installed capacity of the Palmucho power plant, from 32 MW to 34 MW.(6)
     Includes one additional unit of Diego de Almagro (23 MW), which Endesa Chile has rented from Codelco since 2001.(7)
     In December 2009, the CDEC-SIC recognized an increase in the installed capacity of the San Isidro 2 power plant, from 353 MW to 399MW due to the use of GNL in replacement of diesel.(8)
     In July and September 2009, the first and second unit started their commercial operations with a gross output of 129 MW and 128 MW, respectively.  The Quintero power plant was definitively declared as having a gross capacity of 257 MW, in open cycle operating with diesel, and from December 2009, it is also able to operate with natural gas from the LNG re-gasification plant.(9)
     In December 2009, the Canela II wind farm started its commercial operations with a total declared capacity of 60 MW.(10)
     Since 2008, we include the 50% of GasAtacama installed capacity.(11)
     Until 2007, the figure represented capacity value for units 1 and 3.  Unit 2 was added in 2008, following overhaul and recovery of capacity.(12)
     Minor plants are registered with a total capacity of 96 MW.  As of December 31, 2009 Emgesa owned and operated five minor plants:Charquito,El Limonar,La Tinta,TequendamaandLa Junca.(13)
     During 2008, the installed capacity of Santa Rosa was redefined as required by the relevant authority.(14)
     In September 2009, the gas turbine, corresponding to the expansion of Santa Rosa thermal plant started its commercial operations with a gross capacity of 193 MW.  In November 2009, a capacity increase of 7 MW was recognized, reaching 200 MW.  Additionally, in April 2009, a capacity increase of 0.6MW in the TG7 turbine of the Santa Rosa plant was also recognized.
   69


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Generation Projects Completed during 2009  Peru. Santa Rosa Thermal Power Plant Expansion Project  This project consisted in the expansion of the Santa Rosa 229 MW thermal plant, in Lima, Peru, by the construction and commissioning of an open cycle gas turbine that will use natural gas from Camisea as fuel.  In September 2009, the new unit started its commercial operations with a declared gross capacity of 193 MW, and in November 2009 an additional capacity of 7 MW was recognized.  Chile. Canela II Wind Farm Project  The Canela II wind farm project consisted in the expansion of the existing 18.2 MW wind farm, Canela, with the installation of additional 40 units of 1.5 MW each, on an adjoining site, in Coquimbo Region.  Commercial operations began in December 2009, with a total declared capacity of 60 MW.  Chile. Quintero Power Plant  This project consisted in the construction and commissioning of a thermal power plant, in the Valparaíso Region, composed of two open cycle gas turbines, designed to operate with both diesel and natural gas.  In addition, the power plant will be the electrical back-up for the LNG terminal in Quintero.  For the energy evacuation and connection to the SIC, an approximately 40 km energy line, in 1x220 kV, was built between Quintero and the San Luis Transquillota substation.  In July and September 2009, the first and second unit started their commercial operations with a gross output of 129 MW and 128 MW, respectively.  The Quintero power plant was finally declared with an aggregate gross capacity of 257 MW, in open cycle operating with diesel, and as of December 2009 is able to operate as well with natural gas from the LNG re‐gasification plant.  Argentina. Manuel Belgrano and San Martín Power Plant Projects  Two power plant projects are being developed by Manuel Belgrano and San Martín, both related to Endesa Chile through its subsidiaries, Endesa Costanera and El Chocón.  Each project consists of the installation of a combined cycle gas turbine of 823 MW, the first located next to Campana, (80 km north of Buenos Aires), and the second, in Timbúes (35 km north of Rosario).  In 2009, the Manuel Belgrano power plant operated with the two turbines installed during 2008. The annual generation reached 1,662 GWh.  By December 31, 2009, the construction and tests in the new unit were already completed.  The unit was declared in commercial operations as a combined cycle on January 7, 2010 with a net capacity of 823 MW.  In 2009, the San Martín plant operated with two of their installed turbines during 2008.  Annual generation reached 1,708 GWh. On December 31, 2009, the combined cycle was connected for the first time.  The unit started its commercial operations as a combined cycle on February 2, 2010 with a net installed capacity of 824 MW.  Chile. Quintero Quillota Pipeline  In July 2008, Endesa Chile started the construction of a pipeline that supplies Quillota, San Isidro and other off takers with the gas obtained at the re-gasification plant in Quintero.  The pipeline is 28 km long and counts on a transport capacity of 15 million m3/d.  The construction was completed in February 2009 and commercial operation started in March 2009.  Projects under Construction  Chile. Bocamina Power Plant Expansion, Second Unit  Located in the district of Coronel, Bío-Bío Region, the project benefits from the existing harbor services, as well as some ancillary facilities of the first unit, built for coal storing and disposal of ashes.  This second unit will use pulverized coal and technology for reduction of emissions. Its installed capacity is estimated to be 370 MW and the start-up is planned for late 2010.   70


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Chile. LNG Receiving Terminal at Quintero, Valparaíso Region  In May 2007, as part of a consortium with Enap, Metrogas and British Gas, in which Endesa Chile participates with a 20% stake, we agreed to construct the LNG re-gasification facility in Quintero Bay.  Partial commercial operations began on September 2009 while full commercial operations are scheduled for August 2010. On June 29, 2009, the first LNG ship arrived for commissioning.  Later, during 2009, seven other commercial ships with LNG arrived. Endesa Chile consumed 206 million m3 of LNG brought on those ships.  Projects under Development  Chile. Los Cóndores Project  The project, that already has the environmental approval, is located in the Maule River basin, in Chiles Maule Region and consists of a 150 MW hydroelectric power station that will use the water flows from Maule Lake.  Currently, we are studying a new alternative that implies the construction of a tunnel with the TBM technology (tunnel machinery) which involves higher efficiencies, safety standards and a lower environmental impact.  For 2010, we expect to present a modification to the environmental impact study, conclude the basic engineering studies and start the bidding process.  Chile.  Neltume-Choshuenco Hydroelectric Project  The Neltume and Choshuenco projects are located in Chiles Los Ríos Region, on the upper part of the Valdivia River basin.  The Neltume project consists of a 490 MW run-of-the-river hydro plant.  The Choshuenco project uses the flows of the Llanquihue River at its source, at the junction with the Fuy and Neltume Rivers, with the possibility of building a run-of-the-river 128 MW hydro plant.  Regarding the Neltume plant, during 2009 the environmental impact study was carried out, and it was presented to the authorities in February 2010.  In April 2010 we voluntarily decided to withdraw temporarily the environmental impact study submitted, in order to complement it with further studies, some of which require complex modeling and other field surveys for different seasons of the year.The final goal is to present a new version of the environmental impact study that fully contains the information that will be requested by the different entities that participate in this process.  Chile.  HidroAysén Project  The HidroAysén hydropower project consists of five hydroelectric power stations, with an aggregate capacity of 2,750 MW, two of which are located in the Baker River (660 MW and 360 MW) and the other three in the Pascua River (500 MW, 770 MW and 460 MW).  Connection to the SIC consists of a nearly 2,000 km, 500 kV high-voltage direct current (HVDC) transmission line.  Works at HidroAysén have been mainly concentrated in engineering and environmental studies.  During 2009, we worked on answering the governmental observations to the Environmental Impact Study and presented such answers and comments to the authorities in October 2009.  In January 2010, we received a second set of observations.  The company developed direct contact with local communities through round table meetings, attended by residents and their representatives.  In December 2009, the contract with Transelec ended.  The contract consisted in the design and studies for the construction of the HVDC line that will transport the electricity to the SIC.  Since January 2010, the studies are being carried out directly by Centrales Hidroeléctricas de Aysén S.A.  Chile. Punta Alcalde Power Plant  The project consists of the construction of a thermoelectric plant with two steam-coal units, with a total installed capacity of 740 MW, located in the Atacama Region.  During 2009, the project was submitted to the Environmental Impact Study and basic engineering studies took place.  71


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Chile.  Piruquina Mini Hydro Project  The project is developed by Endesa Eco and is located in the island of Chiloé, 17 km from Castro.  It consists of a run-of-the-river hydroelectric power plant which will use water flow from the Carihueico River.  According to the feasibility study, the installed capacity will be 7.6 MW.  In November 2009, the Los Lagos Region Corema approved the Environmental Impact Study and in December 2009, Endesa Chile initiated the bidding process for a turnkey EPC contract.  Colombia. Quimbo Hydroelectric Project  El Quimbo hydroelectric project will be located in the department of Huila, on the Magdalena River, upstream of the Betania power plant.  Its installed capacity will be 400 MW through two generator units. We expect that the project will start operations by December 2014.  In 2009 the Ministry of the Environment approved the environmental license and building permission.  The award of the contract for deviation works is expected for 2010.  As a result of the awarding process, Emgesa assumed the obligation to offer firm energy from El Quimbo as of December 2014.  Peru. Curibamba Hydroelectric Project  We began the studies for the construction of a hydroelectric pass through power plant, in the region of Junín, in the Tulumayo River basin in the upper part of the river where Edegels Chimay power plant is located.  The Curibamba project will have an installed capacity of 188 MW with two generation units.  During 2009 the environmental impact and the feasibility studies advanced and we expect to have them ready during 2010.  Property, Plants and Equipment of Distributing Companies  We also have significant interests or investments in electricity distribution.  The description of each distribution company is included in this Item 4.  Information on the Company.  The table set forth hereunder describes Enersis main equipment used for its distribution businesses, such as transmission lines, substations, distribution networks and transformers. Our distribution facilities are insured against damage to substations and administration buildings.  Risks covered include losses caused by fires, explosions, earthquakes, floods, lightning, damage to machinery and other such events.  Insurance policies include liability clauses, which protect our companies from complaints made by third parties.  Transmission lines and the equipment attached to them do not qualify as insurable assets for property damage in the standard market, although they have insurance policies including civil liability clauses for damages against third parties caused by these installations.  TABLE OF DISTRIBUTION FACILITIES  General Characteristics Location
     Concession Area (km2)
     Transmission
Lines (km) (1)2008
     2009Chilectra
     Chile
     2,118
     355
     355Edesur
     Argentina
     3,309
     1,160
     1,162Edelnor
     Peru
     2,440
     425
     436Ampla
     Brazil
     32,615
     2,333
     2,333Coelce
     Brazil
     148,825
     4,244
     4,312Codensa
     Colombia
     18,217
     1,227
     1,274Total
     
     203,320
     9,744
     9,872
    (1)   The transmission lines consist of circuits with voltages in the range of 27 kV - 220 kV.  72


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Power and Interconnection Sub-Stations and Transformers (1) 2008
     2009Number of Sub-stations
     Number of Transformers
     Capacity (MVA)
     Number of Sub-stations
     Number of Transformers
     Capacity (MVA)Chilectra
     53
     148
     6,652
     53
     149
     6,729Edesur
     66
     171
     11,406
     67
     173
     11,481Edelnor
     29
     64
     2,452
     29
     64
     2,572Ampla
     116
     226
     4,376
     117
     226
     4,434Coelce
     95
     151
     2,145
     97
     154
     2,211Codensa
     61
     206
     7,460
     85
     240
     7,685Total
     420
     966
     34,491
     448
     1,006
     35,112
  (1)   Voltage of these transformers is in the range of 500 kV (high voltage) and 7 kV (low voltage).  Distribution Network - Medium and Low Voltage Lines (1) 2008
     2009Medium Voltage (km)
     Low
Voltage (km)
     Medium Voltage (km)
     Low
Voltage (km)Chilectra
     4,745
     9,817
     4,822
     9,964Edesur
     7,118
     15,760
     7,223
     15,870Edelnor
     3,480
     18,053
     3,597
     18,708Ampla
     31,238
     16,901
     32,052
     17,146Coelce
     68,435
     42,281
     74,829
     44,297Codensa
     18,417
     22,096
     22,487
     27,632Total
     133,433
     124,908
     145,010
     133,617
  (1) Medium voltage lines: 7 kV34.5 kV; low voltage lines: 380-110 V.  Transformers for Distribution (1) 2008
     2009Number of Transformers
     Capacity
(MVA)
     Number of Transformers
     Capacity
(MVA)Chilectra
     27,768
     6,062
     28,057
     6,256Edesur
     23,834
     5,110
     23,474
     5,339Edelnor
     9,481
     1,252
     9,540
     1,304Ampla
     102,878
     3,561
     105,308
     3,701Coelce
     115,086
     3,825
     124,800
     3,944Codensa
     62,952
     7,559
     71,420
     8,142Total
     341,999
     27,369
     362,599
     28,686
   (1) Voltage of these transformers is in the range of 34.5 kV (high voltage) and 110 V (low voltage).  Climate Change  In recent years, the country and the region have seen a growing development related to renewable energy and strategies to face climate change.  This has led both the public and private sectors to conduct suitable strategies for adapting themselves to the new requirements, evidenced by legal obligations at the local level, commitments assumed by countries at the international level and the demanding requirements of the international markets in these matters.  During 2009, Endesa Chile and its subsidiaries, in particular Endesa Eco, carried out several activities and held working meetings with different public and private entities, in order to learn about the technical and regulatory news in the area of NCRE and climate change at both the local and international levels, analyze and establish strategic alliances, develop social and private projects and strengthen the leadership position achieved by the company in Chile.    73


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In addition to the Canela wind farm (18.2 MW) in operation since late 2007 and the Ojos de Agua mini-hydroelectric plant (9 MW) in operation since 2008, the Canela II wind farm (60 MW), located next to the previously mentioned wind farm, in the Coquimbo Region, started operations in 2009.  Regarding the development of emission reduction mechanisms, during 2009, the projects in the Clean Development Mechanism (CDM) circuit were:  Ojos de Agua Mini-Hydroelectric Plant: The procedures began during 2009 for the verification of the greenhouse-effect gas emissions avoided by the Ojos de Agua mini hydroelectric plant the year before, in order to certify and trade these emission reductions under the CDM.  During 2009, this facility has avoided the emission of some 16,000 tons of CO2, which can be traded in 2010, once verified.  Canela Wind Farm:On April 3,2009, the United Nations Climate Change Office approved the registration of the Canela project in the CDM circuit as a CDM project, which recognizes that this wind farm may verify and trade the greenhouse-effect gas emissions it will avoid during its useful life.  Canela has avoided the emission of some 21,335 tons of CO2 during 2009, which will be traded on the CDM circuit during 2010 once verified.  Canela II Wind Farm: During 2009, the expansion of the Canela wind farm by 60 MW, named Canela II, began the process for obtaining the registration of the reduction with the United Nations Framework Convention on Climate Change (UNFCCC). According to the base line analysis presented in the Project Design Document (PDD), estimates are that the facility will avoid the emission of 89,608 tons of CO2 annually.   Detail of CDM projects processed in 2009 by Endesa EcoCD; project
     Company/country
     Position as of December 31, 2009
     Emission factor
(tons CO2e/MWh)
     Approximate emissions avoided
(tons CO2e/year)Ojos de Agua mini-hydroelectric plant
     Endesa Eco (Chile)
     Registered with the Executive Authority of the UNFCCC since April 2007 and currently in verification the reduction in emissions of 2008 period.
     0.4348
     7,939
(CER of 2008 being verified) (1)Canela wind farm
     Central Eólica Canela S.A. (Chile)
     Registered with the Executive Authority of the UNFCCC since April 2009
     0.5713
     21,335
(still not verified)Canela II wind farm
     Central Eólica Canela S.A. (Chile)
     PDD prepared, public enquiry held and validation begun.
     0.6541
     89,608
(PDD being  verified)
 (1): CER: Certified Emission Reductions  The CO2 (greenhouse effect gas) emissions of the Company for the last three years were 11.5 million tons in 2007, 11.5 million tons in 2008 and 12.4 million tons in 2009.  Major Encumbrances  Endesa Costaneras debt with Mitsubishi Corporation corresponds to the balance of payments in the purchase of equipment.  As of December 31, 2009, the value of the assets pledged as a guarantee of this debt was Ch$ 54 billion.  Additionally, Endesa Costanera has executed liens in favor of Credit Suisse First Boston in order to guarantee a loan in the amount of Ch$ 16 billion as of December 31, 2009.  Pangue executed a first mortgage on the property where its power plant is located, including the water rights and the concession to establish the power plant.  There is also a lien on the electricity lines, machinery and equipment of the power plant.  Both include the prohibition to sell, transfer or further encumber such assets.  The value of the pledged assets was Ch$ 86 billion as of December 31, 2009.  These encumbrances and prohibitions guarantee the obligations of Panguewith the project lenders and Export Development Corporation.  Edegel has a debt originated in the financing of the Ventanilla power plant.  As of December 31, 2009, the value of the assets pledged as a guarantee for this debt was Ch$ 105 billion.   74


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GNLQ project finance required the sponsors, Endesa Chile among them, to encumber their shares in the company as a guarantee for the lenders.  Item 4A.  Unresolved Staff Comments  There are no unresolved staff comments as of December 31, 2009.  Item 5.   Operating and Financial Review and Prospects  A.            Operating Results.  The following discussion should be read in conjunction with our Consolidated Financial Statements and the notes thereto, which are included in this report and have been prepared in accordance with IFRS.  Effective January 1, 2009, we adopted the IFRS issued by the IASB, in replacement of the previous accounting principles which were under Chilean GAAP.  IFRS differ in certain aspects from Chilean GAAP.  For further information, see Introduction and Note 40 to our Consolidated Financial Statements.  Introduction  We are an investment company that owns and operates electric power generation, transmission, and distribution companies in Chile, Argentina, Brazil, Colombia and Peru.  Most of our revenues, income and cash flows come from the operations of our subsidiaries and affiliates in these five countries.  Factors such as hydrologic conditions, regulatory developments and economic conditions in each country in which we operate are important in determining our financial results.  In addition, the results from operations and financial condition are affected by variations in exchange rates between the dollar and the peso and the currencies of the other four countries in which we operate.  These exchange variations may have an important impact in the consolidation of the results of our companies outside Chile.  Lastly, we have certain critical accounting policies that affect our consolidated operating results.  Hydrologic Conditions: Generation Business  A substantial part of our generation business depends on hydrological conditions in the countries where we operate, although only extreme hydrological conditions materially affect the Companys operating results and financial condition.  In terms of installed capacity, in 2008 and 2009, approximately 60% and 58% of Enersiss consolidated installed capacity, respectively, has been hydroelectric.  Consolidated hydroelectric capacity was 8,641 MW as of December 31, 2008 and 8,654 MW as of December 31, 2009.  Hydrological conditions for the period between 2008 and 2009 have not led to significant changes in our financial condition and results from operations.  Hydroelectric generation was 35,623 GWh in 2008 and 37,693 GWh in 2009.  The generation increase in 2009 is associated with better hydrological conditions in Chile, Argentina and Peru, as compared to the previous year.  Our thermal generators burn natural gas, coal or diesel, and dispatch in order to cover peak energy demand and any deficit experienced by our hydroelectric plants due to low water resources.  We can offset the effect of low hydrology (reservoir levels, rain and snow), in the geographical areas where we operate our plants, by thermal generation and purchases.  The companys thermal installed capacity and the ability to purchase electricity from other generators allow us to increase thermal generation and/or purchase electricity from competitors to meet our commitments.  In addition, given industry structure and the percentage of hydroelectric generation capacity in the countries where we operate, when hydrology is low, electricity prices generally increase.  Low hydrology could potentially lead to higher revenues and sometimes, higher operating income.  Operating costs of thermal generation and energy purchases are higher than the variable cost of hydroelectric generation.  The cost of thermal generation does not directly depend on hydrology, instead on global commodity prices. However, the cost of electricity purchases on the spot market does depend on the level of hydrology.  For further information on the effects of hydrological conditions on our operating results, please see Item 3. Key Information  D. Risk Factors  Since our generation business depends heavily on hydrological conditions, drought conditions may hurt our profitability.   75


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Regulatory Developments  The regulatory frameworks governing our business in the five countries where we operate have a material effect on our results from operations.  In particular, regulators set (i) generation tariffs taking into consideration principally the costs of fuels, reservoir levels, exchange rates, future investments in installed capacity and demand growth distribution, and (ii)  tariffs taking into account the costs of energy purchases paid by distribution companies (which distribution companies pass on to their customers) and the Value Added from Distribution, or VAD; all of which are intended to reflect investment and operating costs incurred by distribution and generation companies and is meant to allow such companies to obtain a return on their investments.  The earnings of our electricity subsidiaries are determined to a large degree by the actions taken by the state regulatory authorities.  For additional information on the regulatory frameworks in the countries where we operate, see Item 4. Information on the Company  B. Business Overview  Electricity Industry Regulatory Framework.  Economic Conditions  Macroeconomic conditions in the countries in which we operate may have a significant effect on our operating results.  For example, when a country experiences sustained economic growth, consumption of electricity by industrial and individual consumers increases while electricity losses decrease.  Other macroeconomic factors such as devaluation of the local currency in the countries where we operate may have a negative impact on our results from operations because, though most of our revenues are denominated in the currency of the countries in which we operate, our financing costs and other important costs are denominated in dollars.  As a result, a devaluation of local currencies against the dollar can result in a reduction of our operating margins and an increase in the cost of capital expenditure plans.  For additional information, see Item 3.  Key InformationD. Risk FactorsForeign exchange risks may adversely affect our results, and the dollar value of dividends payable to ADS holders, South American economic fluctuations are likely to affect our results from operations and Our business is particularly dependent on the Chilean economy and our revenues are sensitive to its performance.  Economic Growth and Electricity Demand  In most of the countries in which we operate, the worldwide financial crisis adversely impacted economic growth in 2009.  Demand for electricity was also lower compared to the prior year due to the economic constraints in most of those countries.  The GDP and electricity growth rate for the years covered by this report are included in the following table:  2008
     
     2009GDP
Growth
(%)
     
     Electricity
Demand
Growth (%)
     
     GDP
Growth (1) 
(%)
     
     Electricity
Demand
Growth (%)Chile (2)
     
     3.7
     
     0.3
     
     (1.5)
     
     0.5Argentina
     
     6.8
     
     2.9
     
     0.9
     
     (1.3)Colombia
     
     2.5
     
     2.7
     
     0.1
     
     9.8Brazil
     
     5.1
     
     2.6
     
     (0.2)
     
     (0.7)Peru
     
     9.8
     
     9.7
     
     0.9
     
     0.3
 
 (1)Sources: For Chile, Central Bank of Chile.  For Argentina, Colombia, Brazil and Peru, World Economic Outlook (April 2010) estimate of the International Monetary Fund (IMF), and internal Company physical energy data for 2008-2009. (2)Electricity demand growth in the Central Interconnected System (SIC) and the Northern Grid System (SING).  Local Currency Exchange Rate  Variations in the parity of the dollar and the local currency in each of the countries in which we have operations may have an impact on our operating results and overall financial position.  The impact will depend on the level at which tariffs are pegged to the dollar, dollar-denominated assets and liabilities existing in the period and the translation of Consolidated Financial Statements of the Company to the presentation currency, which is the Chilean peso.  As of December 31, 2009, Enersis had total consolidated indebtedness in financial terms of $ 8,224 million, of which 29% was denominated in dollars, 22% denominated in reais, 22% denominated in pesos, 19% in Colombian pesos, 6% in soles and 2% in Argentine pesos.   76


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The following table sets forth the closing and average local currencies per dollar exchange rates for the periods indicated.  2008
     
     2009Average
     
     Year End (1)
     
     Average
     
     Year End (1)Chile (pesos per dollar)
     
     521.8
     
     636.45
     
     559.66
     
     507.10Argentina (Argentine pesos per dollar)
     
     3.16
     
     3.45
     
     3.77
     
     3.80Colombia (Colombian pesos per dollar)
     
     1,963
     
     2,243
     
     2,155
     
     2,044Brazil (reais per dollar)
     
     1.83
     
     2.34
     
     2.00
     
     1.74Peru (soles per dollar).
     
     2.92
     
     3.14
     
     3.01
     
     2.89
 
 (1)Sources: Central Bank of each country.  For the year ended December 31, 2009, our revenues before consolidation adjustments amounted to $ 12,897 million of which approximately 25% were either denominated in dollars or linked to dollars through some form of indexation.  In respect of the total balance, $ 3,594 million were revenues in reais, $ 2,279 million in pesos, $ 2,070 million in Colombian pesos, $ 1,124 million in Argentine pesos and $ 643 million in soles.  Critical Accounting Policies  Financial Reporting Release Section 501.14 encourages all companies to include a discussion of critical accounting policies or methods used in the preparation of financial statements.  Critical accounting policies are defined as those that reflect significant judgments and uncertainties, which would potentially result in materially different results under different assumptions and conditions.  We believe that our critical accounting policies are limited to those described below with reference to the preparation of our financial statements under IFRS.  Below we present our critical accounting policies.  Impairment of Long-Lived Assets  During the year, and at the end of each reporting period, the Company determines whether there is any indication that an asset might have suffered an impairment loss.  If any such indication exists, the recoverable amount of the asset is estimated in order to determine the amount of the impairment loss (if any).  Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs, which is considered to be the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.  For the case of cash-generating units to which goodwill or intangible assets with indefinite useful lives have been allocated, the recoverability analysis is performed systematically at the end of each reporting period.  Recoverable amount is the higher of fair value less costs to sell and value in use.  Value in use is the present value of the future cash flows expected to be derived from an asset or cash-generating unit.  In calculating the recoverable amount of property, plant and equipment, goodwill and intangible assets, the Company used the value in use approach in practically all cases.  In assessing value in use, the Company prepares the projections of future pre-tax cash flows on the basis of the most recent available budgets.  These budgets include the best management estimates of the income and costs of the cash-generating units by using industry projections, historical experience and future expectations.  These projections cover the next five years and the future cash flows expected are estimated by applying reasonable growth rates between 3.7% and 8.3% that in no case are increasing or exceed the average long-term growth rates in the industry or specific country.  Expected future cash flows are discounted to their present value using pre-tax discount rates.  Such discount rates reflect current market assessments of the time value of money and the risk premiums generally used by business analysts.   77


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The discount rates applied in 2009 and 2008 were as follows:  Country
     
     Currency
     
     2008
     
     2009Minimum
     Maximum
     
     Minimum
     MaximumChile
     
     pesos
     
     9.90%
     10.40%
     
     9.24%
     9.53%Argentina
     
     Argentine pesos
     
     17.40%
     
     19.51%Brazil
     
     reais
     
     12.10%
     
     11.32%Peru
     
     soles
     
     10.00%
     
     9.09%Colombia
     
     Colombian pesos
     
     11.90%
     
     11.45%
  If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount.  An impairment loss is recognized immediately in profit or loss under the line item Depreciation and Amortization Charge in the consolidated statement of comprehensive income. When an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but the increased carrying amount cannot exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit). An impairment loss recognized for goodwill cannot be reversed in a subsequent period.  Litigation and Contingencies  The Company is currently involved in some legal and tax proceedings.  As discussed in Note 22.2 to our Consolidated Financial Statements as of December 31, 2009, we have estimated the probable outflows of resources of resolving these claims.  We have reached this estimate after consulting our legal and tax advisors who are carrying out our defense in these matters and an analysis of potential results, assuming a combination of litigation and settlements strategies.  Hedges Revenues Directly Linked to the Dollar  The Company has established a policy to hedge the portion of its revenues directly linked to the dollar by obtaining financing in this currency. Exchange differences related to this debt, as they are cash flow hedge transactions, are charged, net of taxes, to an equity reserve account and recorded as income during the period in which the hedged cash flows are realized. This term has been estimated at ten years.  This policy reflects a detailed analysis of our future dollar revenue streams.  Such analysis may change in the future due to new electricity regulations limiting the amount of revenues tied to the dollar.  Pension and Post-Employment Benefits Liabilities  We have various defined benefits plans for our employees.  These plans pay benefits to employees at retirement and use formulas based on years of service and the compensation of the participants.  We also offer certain additional benefits for some retired employees in particular.  The liabilities shown for the pensions and post-employment benefits reflect our best estimate of the future cost of meeting our obligations under these plans.  The accounting applied to these defined benefit plans involves actuarial calculations which contain key assumptions that include: employee turnover, life expectancy and retirement ages, discount rates, expected returns on assets, the future level of compensation and benefits, the claims rate under medical plans and future medical costs.  These assumptions change as economic and market conditions vary and any change in any of these assumptions could have an important effect on the reported results from operations.  The effect of an increase of one percentage point in the discount rate used to determine the present value of the post-employment defined benefits would decrease the liability by Ch$40,456 million (Ch$37,411 million in 2008) and the effect of a decrease of one percentage point in the rate used to determine the present value of the post-employment defined benefits would increase the liability by Ch$47,467 million (Ch$41,370 million in 2008).  For further detail of the mainaccounting policies and the methods used in the preparation of the financial statements, see Notes2 and 3 to our Consolidated Financial Statements.   78


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Recent Accounting Pronouncements  Please see Item 18. Financial Statements  Note 2.2 for additional information regarding recent accounting pronouncement.  Enersis Results from Operations for the Years ended December 31, 2008 and December 31, 2009  Overview  ·Net income attributable to our shareholders was Ch$ 660,231 million, representing a 30.1% increase over 2008.  ·Despite the depressed economic environment resulting from the global recession, the Company obtained a 3.4% increase and a 1% growth in physical sales in the generation and distribution businesses, respectively.  ·Suitable commercial and operating policies applied by the Company and its subsidiaries enabled it to continue improving results, even in a complex economic period.  Our operating figures were as follows:  ·Operating costs fell by 3.6% to Ch$ 4,525,252 million.  ·EBITDA increased by 7.2%, to Ch$ 2,444,934 million.  ·Operating income rose by 3.3% to Ch$ 1,924,636 million, reflecting the better performance of the generation and transmission businesses.  ·The contributions of our principal lines of business to the operating income of the Company were as follows:  Generation and Transmission
     
     61%Distribution
     
     39%
  79


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Operating Income  The following table shows the operating income by company, for the years ended December 31, 2008 and 2009.  Year ended December 31,2008
     
     2009
     
     Change
     
     % Change(in million of Ch$)Generation BusinessEndesa Chile and subsidiaries (Chile)
     
     567,737
     
     640,040
     
     72,303
     
     12.7%Costanera (Argentina)
     
     18,425
     
     4,380
     
     (14,045)
     
     (76.2)%El Chocón (Argentina)
     
     19,031
     
     38,700
     
     19,669
     
     103.4%Cachoeira Dourada (Brazil)
     
     94,782
     
     50,629
     
     (44,153)
     
     (46.6)%CIEN (Brazil)
     
     45,722
     
     47,992
     
     2,270
     
     5.0%Endesa Fortaleza (Brazil)
     
     28,510
     
     83,926
     
     55,416
     
     194.4%Emgesa (Colombia)
     
     216,818
     
     250,811
     
     33,993
     
     15.7%Edegel (Peru)
     
     51,946
     
     76,049
     
     24,103
     
     46.4%Total
     
     1,042,971
     
     1,192,527
     
     149,556
     
     14.3%Distribution BusinessChilectra and subsidiaries (Chile)
     
     213,623
     
     129,032
     
     (84,591)
     
     (39.6)%Edesur (Argentina)
     
     45,627
     
     31,876
     
     (13,751)
     
     (30.1)%Edelnor (Peru)
     
     52,944
     
     62,425
     
     9,481
     
     17.9%Ampla (Brazil)
     
     168,466
     
     187,025
     
     18,559
     
     11.0%Coelce (Brazil)
     
     139,942
     
     151,175
     
     11,233
     
     8.0%Codensa (Colombia)
     
     202,980
     
     199,884
     
     (3,096)
     
     (1.5)%Total
     
     823,582
     
     761,417
     
     (62,165)
     
     (7.5 )%Less: intercompany transactions
     
     (2,902)
     
     (29,308)
     
     (26,406)
     
     (909.9%)Total
     
     1,863,651
     
     1,924,636
     
     60,985
     
     3.3%
  The table below breaks down operating income by segment for years ended December 31, 2008 and 2009.  Year ended December 31, (1)(in million of Ch$)Generation and Transmission
     
     Distribution
     
     Holding expenses and consolidation adjustments
     
     Total2008
     
     2009
     
     2008
     
     2009
     
     2008
     
     2009
     
     2008
     
     2009Operating revenues
     
     2,833,397
     
     2,708,357
     
     4,051,041
     
     4,218,450
     
     (324,847)
     
     (476,919)
     
     6,559,591
     
     6,449,888Operating costs
     
     (1,786,663)
     
     (1,515,949)
     
     (3,227,459)
     
     (3,457,033)
     
     321,182
     
     447,730
     
     (4,695,941)
     
     (4,525,252)Operating income
     
     1,043,734
     
     1,192,408
     
     823,582
     
     761,417
     
     (3,665)
     
     (29,189)
     
     1,863,651
     
     1,924,636
 
 (1)Differences in figures presented in this table with those presented in the Operating Income, Operating Revenues and Operating Costs tables are explained by intercompany transactions and investment vehicles that are included in this table.  Operating Revenues  Generation and Transmission Business Segment  The following table sets forth the physical sales of electricity by our subsidiaries, arranged by country and their corresponding changes for the twelve-month periods ended December 31, 2008 and 2009.   80


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Physical sales duringYear ended December 31,%2008
     
     2009
     
     Change
     
     Change(GWh)Endesa Chile (Chile) (1) (3)
     
     21,532
     
     22,327
     
     795
     
     3.7%Costanera (Argentina)
     
     8,543
     
     8,284
     
     (260)
     
     (3.0)%El Chocón (Argentina)
     
     2,554
     
     4,122
     
     1,567
     
     61.4%Edegel (Peru)
     
     8,461
     
     8,321
     
     (140)
     
     (1.7)%Emgesa (Colombia)
     
     16,368
     
     16,806
     
     438
     
     2.7%Cachoeira Dourada (Brazil) (2)
     
     4,403
     
     3,862
     
     (541)
     
     (12.3)%Endesa Fortaleza (Brazil)
     
     2,690
     
     3,007
     
     317
     
     11.8%Total
     
     64,552
     
     66,728
     
     2,177
     
     3.4%
 
 (1)           Includes Endesa Chile and its generation subsidiaries. (2)           Includes sales to Endesa Fortaleza for 189.9 GWh in the first quarter of 2008. (3)           Upon adoption of IFRS, energy sales in 2008 and 2009 include 50% of GasAtacama  Distribution Business Segment  Distribution revenues are derived mainly from the resale of electricity purchased from generators.  Revenues associated with distribution include the recovery of the cost of electricity purchased and the resulting revenue from the VAD, which is associated with the recovery of costs and the return on the investment with respect to the distribution assets, plus the losses permitted in the regulatory tariffs.  Other revenue deriving from our distribution services consists of charges related to new connections and the maintenance and rental of meters.  The table below shows the physical sales of electricity by our distribution subsidiaries, arranged by country, and their corresponding changes for the year ended December 31, 2008 and 2009.  Physical sales during
Year ended December 31,2008
     
     2009
     
     Change
     
     % Change(GWh)Chilectra (Chile)
     
     12,535
     
     12,585
     
     49
     
     0.4%Edesur (Argentina)
     
     16,160
     
     16,026
     
     (134)
     
     (0.8)%Edelnor (Peru)
     
     5,599
     
     5,716
     
     117
     
     2.1%Ampla (Brazil)
     
     9,119
     
     9,394
     
     275
     
     3.0%Coelce (Brazil)
     
     7,571
     
     7,860
     
     289
     
     3.8%Codensa (Colombia)(1)
     
     11,822
     
     12,144
     
     387
     
     3.3%Total
     
     62,805
     
     63,789
     
     984
     
     1.6%
  
 (1)           The 2009 figure for electricity sold does not coincide with previously disclosed Company information, as the required data for DECA was not available at that earlier time.    81


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Operating Revenues by Business Segment  The table below presents our operating revenues for 2008 and 2009:  Year ended December 31,2008
     
     2009
     
     Change
     
     % Change(in million of Ch$)Generation Business SegmentEndesa Chile and subsidiaries (Chile)
     
     1,609,158
     
     1,373,231
     
     (235,927)
     
     (14.7)%Costanera (Argentina)
     
     240,087
     
     231,421
     
     (8,666)
     
     (3.6)%El Chocón (Argentina)
     
     44,141
     
     65,298
     
     21,157
     
     47.9%Cachoeira Dourada (Brazil)
     
     147,105
     
     88,300
     
     (58,805)
     
     (40.0)%CIEN (Brazil)
     
     72,776
     
     97,961
     
     25,185
     
     34.6%Endesa Fortaleza (Brazil)
     
     110,163
     
     138,595
     
     28,432
     
     25.8%Emgesa (Colombia)
     
     401,470
     
     500,964
     
     99,494
     
     24.8%Edegel (Peru)
     
     208,497
     
     213,625
     
     5,128
     
     2.5%Total
     
     2,833,397
     
     2,709,395
     
     (124,002)
     
     (4.4)%Distribution Business SegmentChilectra and subsidiaries (Chile)
     
     1,078,280
     
     1,084,346
     
     6,066
     
     0.6%Edesur (Argentina)
     
     333,267
     
     324,518
     
     (8,749)
     
     (2.6)%Distrilima/Edelnor (Peru)
     
     253,652
     
     301,472
     
     47,820
     
     18.9%Ampla (Brazil)
     
     964,909
     
     1,001,031
     
     36,122
     
     3.7%Investluz/Coelce (Brazil)
     
     759,779
     
     766,723
     
     6,944
     
     0.9%Codensa (Colombia)
     
     661,154
     
     740,360
     
     79,206
     
     12.0%Total
     
     4,051,041
     
     4,218,450
     
     167,409
     
     4.1%Less: intercompany transactions
     
     (324,847)
     
     (477,957)
     
     (153,110)
     
     (47.1%)Total
     
     6,559,591
     
     6,449,888
     
     (109,703)
     
     (1.7)%
   Generation and Transmission Businesses: Operating Revenues  Total revenues in 2009 in Chile declined by 14.7% to Ch$ 1,373.2 billion as a result of lower average sale prices, as compared to the previous year, reflecting a decrease in energy generating costs in the system.  This was partly compensated by the 3.7% increase in physical sales to reach 22,327 GWh, due to an increase of 4,183 GWh in sales in the spot market.  The average price for total sales of Endesa Chile in Chile fell by 22%, from $ 139 per MWh in 2008 to $108 per MWh in 2009.  The translation effect is the net effect obtained when translating the results from the local currency of each country to pesos.  In Argentina, Costaneras operating revenues declined by Ch$ 8.7 billion, or 3.6%.  This is explained in part by lower physical sales, which declined by 4.0% to 8,172 GWh, though this was partly compensated by a 7.5% increase in average sales prices in local currency during 2009.  On the other hand, El Chocóns revenues increased by 47.9%, the equivalent of Ch$ 21.2 billion, mainly due to the 95.0% increase in physical sales as a result of greater reservoir water levels at the beginning of the year.  The average sale price remained unchanged in both years at around Ar$ 106 per MWh.  In both companies, the translation effect negatively affected results, which resulted in a 8.5% decrease in revenues in pesos.  In Colombia, Emgesas operating revenues rose by Ch$ 99.5 billion, or 24.8%, mainly due to the 24% increase in the average sales price in local currency due to the low hydrology during the year, and also to a 2.7% increase in physical sales, which rose to 16,806 GWh.  This was partially compensated by the translation effect which generated a 2.2% reduction in revenues in pesos.  In Brazil, the revenues of Cachoeira Dourada declined by Ch$ 58.8 billion, or 40.0%.  This was the result of reduced sales prices and a 12.2% reduction in physical sales, reaching 3,862 GWh.  In contrast, Fortalezas operating revenues in 2009 rose by Ch$ 28.4 billion, or 25.8%.  This was mainly due to an increase in physical sales from 2,690 GWh to 3,007 GWh and a 12.1% higher average sale price in local currency.  In both cases, the  translation effect produced a reduction in pesos of 1.8% compared to 2008.    82


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The revenues of our subsidiary CIEN in 2009 amounted to Ch$ 98.0 billion, an increase of 34.6% over 2008.  In February, the company started exporting energy to Uruguay and Argentina, as opposed to the previous year when exports to Argentina began in April.  This was partially compensated by the translation effect which resulted in a reduction in pesos of 1.8% compared to 2008.  The revenues for Edegel, our electricity generator in Peru, rose by Ch$ 5.1 billion, or 2.5%, in 2009, mainly due to the translation effect.  Physical sales declined by 1.7% to 8,321 GWh and the average sales price in local currency fell by 3.5%.  Distribution Business: Operating Revenues  In Chile, Chilectras operating revenues in 2009 rose slightly, by 0.6% compared to 2008, mainly due to the 0.4% increase in physical sales, reaching 12,585 GWh.  Energy demand grew by 0.6% over 2008.  The number of customers increased by 45,200, or 3.0%, and energy losses were 6.1%, compared to 5.9% in 2008.  In Argentina, Edesurs operating revenues fell by Ch$ 8.7 billion during 2009, or 2.6%, compared to 2008, mainly explained by the translation effect.  Physical sales declined by 0.8% to 16,026 GWh in 2009, in line with the 1.0% reduction in energy demand.  This was partially compensated by an increase in average sales prices in local currency of 9.0%.  Energy losses decreased to 10.5% from 10.6% in 2008, and the number of customers rose by 42,829 to 2.3 million.  In Peru, Distrilimas (Edelnor) operating revenues increased by 18.9% in 2009, mainly due to a 2.0% higher energy demand, a reduction in energy losses and the translation effect, which resulted in an increase in pesos of 4.5% in 2009.  Physical energy sales rose by 2.1% to 5,716 GWh.  The number of customers increased by 32,758 to 1.1 million and energy losses declined by 0.1 percentage point to 8.1%.  In Brazil, Amplas revenues increased by Ch$ 36.2 billion, or 3.7%, in 2009, mainly due to higher sales of Ch$ 44.8 billion resulting from a higher average sale price in local currency of 8.4% and an increase in physical sales which rose by 3% to 9,394 GWh in 2009.  In addition, tolls and other services increased by Ch$ 11.8 billion.  This was partially compensated by Ch$ 20.5 billion in lower revenues attributable to the construction of fixed assets in the concession zone and the effect of translating the financial statements from reais to pesos.  Energy demand increased by 4.4%, the number of customers grew by 55,129 to over 2.5 million and energy losses rose from 20.2% to 21.2% in 2009.  Coelces revenues rose by 0.9% to Ch$ 766.7 billion, mainly due to 12.0% higher average sales prices in local currency, an increase in physical sales of 3.8% to 7,860 GWh and lower energy losses, from 11.7% in 2008 to 11.6% in 2009.  This was partially compensated by reduced revenues from the construction of fixed assets in the concession zone of Ch$ 47.1 billion and the translation effect.  Energy demand increased by 3.6% and the number of customers by 123,631 to over 2.9 million.  In Colombia, Codensas revenues in 2009 increased by 12.0%, or Ch$ 79.2 billion, mainly due to a 12.7% increase in the average sales price in local currency, a 0.3% rise in energy demand which implied a 0.1% increase in physical sales to 11,837 GWh and the first time consolidation of DECA with Ch$ 34.1 billion in revenues.  This was partially compensated by the translation effect which cause a 2.2% fall in pesos.  The number of customers rose by 75,671 to 2.4 million in December 2009.  Operating Costs  Operating costs consist primarily of purchases of electricity from third parties, depreciation and amortization, fuel purchases, maintenance expenses, tolls paid to transmission companies and salaries.   83


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The table below shows the breakdown of the expenses detailed above as a percentage of our total operating costs for the years ended December 2008 and 2009.  Year ended December 312008
     
     2009(percentage of total costs of operations)Electricity purchases
     
     34.6%
     
     34.5%Other variable costs
     
     16.5%
     
     17.4%Fuel purchases
     
     18.0%
     
     12.8%Depreciation and amortization
     
     8.9%
     
     11.5%Other fixed costs
     
     9.5%
     
     10.2%Staff benefit costs
     
     6.2%
     
     7.4%Transmission tolls
     
     6.3%
     
     6.1%100.0%
     
     100.0%
  The table below sets forth the breakdown of operational costs for the years ending on December 31, 2008 and 2009:  Year ended December 31,2008
     
     2009
     
     Change
     
     % Change(in million of Ch$)Generation BusinessEndesa Chile and subsidiaries (Chile)
     
     1,041,421
     
     733,191
     
     (308,230)
     
     (29.6)%Costanera (Argentina)
     
     221,662
     
     227,041
     
     5,379
     
     2.4%El Chocón (Argentina)
     
     25,110
     
     26,598
     
     1,488
     
     5.9%Cachoeira Dourada (Brazil)
     
     52,323
     
     37,671
     
     (14,652)
     
     (28.0)%CIEN (Brazil)
     
     27,054
     
     49,969
     
     22,915
     
     84.7%Endesa Fortaleza (Brazil)
     
     81,653
     
     54,669
     
     (26,984)
     
     (33.0)%Emgesa (Colombia)
     
     184,652
     
     250,153
     
     65,501
     
     35.5%Edegel (Peru)
     
     156,551
     
     137,576
     
     (18,975)
     
     (12.1)%Total
     
     1,790,426
     
     1,516,868
     
     (273,558)
     
     (15.3)%Distribution BusinessChilectra and Subsidiaries (Chile)
     
     864,657
     
     955,314
     
     90,657
     
     10.5%Edesur (Argentina)
     
     287,640
     
     292,642
     
     5,002
     
     1.7%Distrilima/Edelnor (Peru)
     
     200,708
     
     239,047
     
     38,339
     
     19.1%Ampla (Brazil)
     
     796,443
     
     814,006
     
     17,563
     
     2.2%Investluz/Coelce (Brazil)
     
     619,837
     
     615,548
     
     (4,289)
     
     (0.7)%Codensa (Colombia)
     
     458,174
     
     540,476
     
     82,302
     
     18.0%Total
     
     3,227,459
     
     3,457,033
     
     229,574
     
     7.1%Less: intercompany transactions
     
     (321,945)
     
     (448,649)
     
     (126,704)
     
     (39.4)%Total
     
     4,695,941
     
     4,525,252
     
     (170,688)
     
     (3.6)%
  Generation and Transmission Businesses: Operating Costs  Operating costs in Chile fell by 29.6% in 2009 compared to 2008, totaling Ch$ 733.2 billion, mainly due to a reduction in fuel costs of Ch$ 260.7 billion.  Production was 22,239 GWh, a 4.6% increase over 2008, permitting a 61.2% reduction in energy purchase costs, or Ch$ 82.6 billion.  This was partially compensated by an increase in depreciation and impairment of fixed assets of Ch$ 44.2 billion.  Costaneras operating costs were Ch$ 5.4 billion or 2.4% higher.  This is mainly explained by higher energy and fuel costs of Ch$ 2.1 billion, an increase in personnel costs of Ch$1.6 billion and higher depreciation of Ch$ 1.6 billion.  El Chocóns operating costs rose by Ch$ 1.5 billion, or 5.9%, mainly due to higher toll charges of Ch$ 0.6 billion, higher personnel costs of Ch$ 0.3 billion and higher depreciation of Ch$ 0.3 billion.  In both companies, the translation effect resulted in reduced operating costs in pesos.  Emgesas operating costs increased by Ch$ 65.5 billion, or 35.5%, principally due to higher energy purchases of 673 GWh which implied a higher cost of Ch$ 44.8 billion, as a result of an increase in sales and reduced energy generation, larger fuel costs of Ch$ 9.8 billion, a larger depreciation charge of Ch$ 6.0 billion and an increase in personnel costs of Ch$ 2.9 billion.  The translation effect produced a 2.2% reduction in the operating costs in pesos.    84


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Cachoeira Douradas operating costs declined by Ch$ 14.6 billion, or 28.0%, to Ch$ 37.7 billion in 2009, mainly due to reduced energy purchases of Ch$ 13.5 billion given the reduction in average prices.  Fortalezas operating costs declined by Ch$ 27.0 billion, or 33.0%, mainly due to lower energy purchase costs of Ch$ 20.9 billion resulting from lower average prices and lower fuel costs of Ch$ 6.0 billion.  In both cases, the translation effect caused a reduction in the operating costs measured in pesos.  CIENS operating costs amounted to Ch$ 50.0 billion, 84.7% more than the year before.  This was the result of higher variable costs of Ch$ 20.6 billion, compensated partially by the translation effect which caused a 1.8% reduction in costs measured in pesos.  Edegels operating costs decreased by Ch$ 19.0 billion, or 12.1%, mainly as a result of lower energy purchase costs of Ch$ 22.9 billion, lower average purchase prices and volumes, and reduced fuel costs of Ch$ 9.1 billion due to greater hydraulic generation.  This was partially compensated by higher personnel and operating costs of Ch$ 3.2 billion and the translation effect.  Distribution Business: Operating Costs  Chilectras operating costs increased by Ch$ 90.7 billion, or 10.5%, mainly due to an increase in energy purchase costs which rose by Ch$ 82.5 billion.  This increase is explained by a 5.5% higher average purchase price and a 1% rise in physical purchases.  There was also an increase in other fixed operating costs of Ch$ 6.4 billion, basically because of an increase in outsourced services of Ch$ 3.3 billion due to greater activity in the business of connections for large customers and in disconnection and re-connection activities.  Operating costs were also affected by higher repair and conservation activities of Ch$ 2.1 billion.  Edesurs operating costs increased by 1.7%, or Ch$ 5.0 billion, mainly explained by higher personnel costs of Ch$ 10.5 billion, partly compensated by reduced energy purchase costs of Ch$ 4.4 billion.  The translation effect shows an 8.5% reduction in the operating costs.  Edelnors operating costs rose by Ch$ 38.3 billion, or 19.1%, mainly due to the increase in energy purchase costs of Ch$ 31.9 billion as a result of higher purchases required to meet the 2.0% increase in demand, and an increase in other variable and personnel expenses of Ch$ 5.5 billion.  The translation effect resulted in a 4.5% increase in the operating costs in pesos.  Amplas operating costs grew by Ch$ 17.6 billion, or 2.2%.  This is mainly explained by an increase in inputs and services of Ch$ 23.3 billion, an increase in other supplies of Ch$13.7 billion and a Ch$ 9.7 billion higher charges for depreciation and amortization.  On the other hand, Coelces operating costs declined by Ch$ 4.3 billion, or 0.7%, in 2009.  This is the result of decreased fixed asset construction costs in the concession zone of Ch$ 47.1 billion and lower energy purchase costs of Ch$ 31.0 billion, which were partially compensated by an increase of Ch$ 6.7 billion in the charge for depreciation and amortization and an increase in personnel costs of Ch$ 2.7 billion.  In both companies, the translation effect resulted in reduced operating costs expressed in pesos.  Codensas operating costs rose by Ch$ 82.3 billion, or 18.0%, in 2009, mainly due to of higher energy purchase costs of Ch$ 58.3 billion as a result of a 18.9% higher average purchase price in local currency, as well as higher personnel costs of Ch$ 11.7 billion and an increase of Ch$ 5.2 billion in depreciation and amortization.  The translation effect shows a 2.2% reduction in the costs expressed in pesos.   85


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Non-operating income The table below sets forth non-operating income (expense) for the years ended December 31, 2008 and 2009 and the percentage change from period to period.  Year ended December 31,2008
     
     2009
     
     Change
     
     % Change(in million of Ch$)Financial expenses netFinancial income
     
     181,789
     
     159,808
     
     (21,981)
     
     (12.1)%Financial expenses
     
     (515,108)
     
     (482,472)
     
     32,636
     
     6.3%Gain (loss) for indexed assets and liabilities
     
     (62,378)
     
     21,781
     
     84,159
     
     N.A.Foreign currency exchange differences, net
     
     (23,633)
     
     (8,235)
     
     15,398
     
     (65.2)%Total
     
     (419,330)
     
     (309,118)
     
     110,212
     
     26.3%Other non-operating gain (loss)Total gain (loss) on sale of non-current assets not held for sale
     
     2,503
     
     53,311
     
     50,808
     
     2,029.9%Other non-operating income
     
     3,261
     
     2,236
     
     (1,025)
     
     (31.4)%Total
     
     5,764
     
     55,547
     
     49,783
     
     863.7%Non-operating income (expense)
     
     (413,566)
     
     (253,571)
     
     159,995
     
     38.7%
  Net financial expenses  Net financial expenses amounted to Ch$ 309.1 billion, which represents a 26.3% reduction respect to the previous year, or Ch$ 110.2 billion.  This is mainly explained by the result of the UF variation arising from UF-denominated debt in Chile, resulting in Ch$ 84.2 billion in lower costs.  The UF decreased by 2.4% in 2009, compared to an increase of 9.3% in 2008.  Net financial expenses also fell by Ch$ 10.6 billion, principally due to the reduced average interest rate.  Exchange differences show a positive change of Ch$ 15.4 billion, mainly in Chile and Brazil.  In Chile, the 25% appreciation of the peso against the dollar, compared to a devaluation of 22% in 2008, positively impacted net assets carried in dollars.  In Brazil, the appreciation reached approximately 34%, compared to the 24% devaluation in 2008, resulting in a net effect on assets and debt in dollars of Ch$ 24,452 million (loss of Ch$ 17,112 million in 2008 and gain of Ch$ 7,340 million in 2009).  Result of asset sales  The result of asset sales shows a gain of Ch$ 50,808 million in 2009, mainly due to a Ch$ 28,114 million gain obtained on the sale of shares of EEB, a gain on the sale of credit portfolio by Codensa for Ch$ 12,784 million and increased gains on sales of the Enea project in Chile, for Ch$ 10,075 million.   86


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Net Income  The following table sets forth our net income for the indicated periods.  Year ended December 31,2008
     
     2009
     
     Change
     
     % Change(in million of Ch$)Operating income
     
     1,863,651
     
     1,924,636
     
     60,985
     
     3.3%Non-operating income
     
     (413,566)
     
     (253,571)
     
     159,995
     
     38.7%Net income before taxes
     
     1,450,085
     
     1,671,065
     
     220,980
     
     15.2%Current tax (expense) credit
     
     (415,903)
     
     (359,737)
     
     56,166
     
     13.5%Net Income from Continuing Operations After TaxGain (loss) from discontinued operations, net of income tax
     
     0
     
     0
     
     0
     
     0 %Net Income
     
     1,034,182
     
     1,311,328
     
     277,146
     
     26.8%Net Income attributable to: Shareholders of the Company
     
     507,590
     
     660,231
     
     152,641
     
     30.1%Net income attributable to: Minority Interest
     
     526,592
     
     651,097
     
     124,505
     
     23.6%
  Corporate income tax shows a reduced charge of Ch$ 56.2 billion in 2009, mainly due to reductions in Endesa Chile of Ch$ 60.2 billion, in Coelce of Ch$ 21.5 billion, in Pehuenche of Ch$ 12.5 billion and in San Isidro of Ch$ 6.0 billion.  This is partially compensated by increases in GasAtacama of Ch$ 16.5 billion, in Emgesa of Ch$ 12.3 billion, in Edegel of Ch$ 7.0 billion, in Cachoeira Dourada of Ch$ 4.8 billion and in Pangue of Ch$ 4.1 billion.  B.            Liquidity and Capital Resources.  We are a company with no significant assets other than the stock of our subsidiaries.  The following discussion of cash sources and uses reflects the key drivers of cash flow for Enersis.  The discussion focuses on Enersis liquidity and capital resources from a financial, as opposed to accounting, perspective.  The approaches vary as a consequence of the time lag between certain cash flows and actual accounting effects.  On the other hand, for the purpose of financial covenant certifications, we rely on accounting information instead.  For information on cash flows from an accounting rather than a financial perspective, please see Item 18.  Financial Statements  Consolidated Financial Statements  Consolidated Statements of Cash Flows for the years ended December 31, 2008 and 2009.  We believe that cash flow generated from our business operations, as well as cash balances, borrowings from commercial banks, and ample access to both Chilean and foreign capital markets will be sufficient to satisfy all of our needs for working capital, debt service, dividends and routine capital expenditures.  Our subsidiary Endesa Chile has relatively small revolving bank loans due in November 2010, and in July 2011, and we do not foresee any difficulty in funding those obligations.  We consider cash flows generated by our wholly-owned subsidiaries (CAM, Synapsis, IMV and investment vehicles) as our own operating inflows and outflows, given that we have always had access to these wholly-owned Chilean subsidiaries cash flows.  Cash flows received from non wholly-owned subsidiaries (including Endesa Chile and Chilectra, among others) and affiliates are classified as financial investments, and are included as dividends, capital reductions, interest income and intercompany debt amortization, as the case may be.   87


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2008
     
     2009(in $ millions)INITIAL CASH      (A)
     
     121.6
     
     183.0SOURCES     (B) + (C)
     
     888.7
     
     1,138.7Cash Inflows from Chile  (B)
     
     823.0
     
     979.0Cash inflows from operations
     
     375.8
     
     317.6Interest income from Chilean subsidiaries
     
     17.7
     
     30.1Dividends from Chilean subsidiaries
     
     267.4
     
     481.9Amortization of intercompany loans from Chilean subsidiaries
     
     162.1
     
     149.4Other Income from non-operating activities
     
     
     
     Cash Inflows from foreign subsidiaries  (C)
     
     65.7
     
     159.7Interest income from foreign subsidiaries
     
     
     
     11.9Dividends from foreign subsidiaries
     
     65.7
     
     147.8Capital reductions
     
     
     
     Management fee and others
     
     
     
     Intercompany debt amortizations
     
     
     
      2008
     
     2009(in $ millions)USES     (D) + (E)
     
     827.3
     
     1,231.9Cash outflows from operations  (D)
     
     367.0
     
     440.1Cash outflows from operations
     
     278.1
     
     396.6Taxes
     
     88.9
     
     43.5Cash Outflows from non-Operating Activities  (E)
     
     460.3
     
     791.8Interest expenses and derivative contracts
     
     19.7
     
     120.8Dividend payment
     
     316.5
     
     393.8Debt amortization
     
     124.1
     
     277.2FINAL CASH     (A)+(B)+(C)-(D)-(E)
     
     183.0
     
     89.8
  For the twelve-month period ended December 31, 2009, our principal sources of funds, expressed in dollars at the year-end exchange rate, were:  $ 317.6 million of cash inflows from operating revenues of our wholly-owned subsidiaries; ·$ 30.1 million of interest payments from Chilean subsidiaries not wholly-owned; ·$ 481.9 million of dividends from Chilean subsidiaries, which includes $ 216.0 million from Chilectra and $ 230.0 from Endesa Chile; ·$ 149.4 million of intercompany loan payment from Chilectra; $ 11.9 million of interest income from foreign subsidiaries; and ·$ 147.8 million from dividends of foreign subsidiaries, which includes $ 102.9 million from Brazil and $ 26.1 million from Colombia, among others.  The aggregate inflows of cash from these sources amounted to $ 1,138.7 million.  For the same twelve-month period ended December 31, 2009, Enersis principal cash outflows totaled $ 1,231.9 million, including:  $ 396.6 million from operating expenses of our wholly-owned subsidiaries, including investments and capital expenditures; ·$ 43.5 million in taxes paid by Enersis and its wholly-owned subsidiaries; ·$ 120.8 million in net interest expense (net of derivative contracts and interest income); ·$ 393.8 million dividend payments made by Enersis; and ·$ 277.2 million of net debt amortization (discounting new debt used for refinancing purposes).   88


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As of December 31, 2009, Enersis had $ 89.8 million in cash.  For the twelve-month period ended December 31, 2008, our principal sources of funds, expressed in dollars at the year-end exchange rate, were:  ·$ 375.8 million of cash inflows from operating revenues of our wholly-owned subsidiaries; ·$ 17.7 million of interest payments from non wholly-owned Chilean subsidiaries; ·$ 267.4 million of dividends from Chilean subsidiaries, which includes $ 100.0 million from Chilectra and $ 167.4 from Endesa Chile; ·$ 162.1 million of intercompany loan payment from Chilectra; ·$ 65.7 million from dividends of foreign subsidiaries, which includes $ 30.5 million from Brazil and $ 25.9 million from Colombia, among others.  The aggregate inflows of cash from these sources amounted to $ 888.7 million.  For the same twelve-month period ended December 31, 2008, Enersis principal cash outflows totaled $ 827.3 million, including:  ·$ 278.1 million from operating expenses of our wholly-owned subsidiaries, including investments and capital expenditures; ·$ 88.9 million in taxes paid by Enersis and its wholly-owned subsidiaries; ·$ 19.7 million in net interest expense (net of derivatives contracts and interest income); ·$ 316.5 million dividend payments by Enersis; and ·$ 124.1 million of net debt amortization (discounting new debt used for refinancing purposes).  As of December 31, 2008, Enersis had $ 183.0 million in cash.  For a description of liquidity risks related to our company status, please see Item 3.  Key Information  D. Risk Factors  We depend in part on payments from our subsidiaries and affiliates to meet our payment obligations in this report.  We coordinate the overall financing strategy of our majority-owned subsidiaries.  Our operating subsidiaries independently develop their capital expenditure plans.  Generally, our policy is to have the operating subsidiaries independently finance their capital expansion programs through internally generated funds or direct financings.  We also coordinate acquisition financing with respect to Chilectras distribution operations.  We coordinate all generation and transmission acquisition financing with Endesa Chile.  For information regarding our commitments for capital expenditures, see Item 4.  Information on the Company  A. History and Development of the Company  Capital Investment Program and our contractual obligations table set forth below.  As of December 31, 2009, our international credit ratings, and those of Endesa Chile, were as follows:  Baa3 with stable outlook from Moodys Investor Services, Inc. (Moodys) and BBB with stable outlook from both Standard & Poors Rating Services (S&P) and Fitch Ratings Ltd. (Fitch).  However, as of the filing of this report, both S&P and Fitch have upgraded our international credit ratings to BBB+ with stable outlook.  In its press release dated January 8, 2010, Fitch explains, among other considerations, that the rating action reflects the operational and financial improvement Enersis has achieved to date and incorporates the expectation that the companys solid credit metrics will be maintained over the medium term.  From an operating perspective, Fitch anticipates cash flows from Enersis power generation business will stabilize as a result of the new contracts that began in January 2010 which include price indexation formulas, the companys conservative commercial policy, recent capacity additions, and its participation in the recently inaugurated LNG terminal in Chile.  In addition, Enersis will continue to benefit from the organic growth of its distribution business; all of which have resulted in a stronger business platform which should enable it to achieve higher earnings with less volatility.  In its press release dated February 16, 2010, S&P comments that the upgrade reflects the improvement of the companys financial risk profile due to a strengthening in cash generation, credit metrics, and cash reserves in the past two years.  In the paragraph on Liquidity, S&P states that they expect Enersis to maintain a good liquidity position to cover at least debt maturities for the next 18 months (between cash holdings and medium term committed lines) and solid levels of free cash flow generation.  We also expect Enersis to maintain its fluid access to financial markets, which should allow it to refinance debt maturities under favorable conditions.    89


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Moodys last rating action on December 16, 2006, involved an upgrade to our current Baa3 with stable outlook.  No other Moodys rating changes have taken place since then.  In the Summary Rating Rationale in its latest credit report dated December2009, Moodys acknowledges that the bulk of the consolidated EBITDA is generated in investment grade countries Chile and Brazil where it benefits from relatively stable and predictable regulatory frameworks.  Moodys also acknowledges that the Company benefits from improving operations and regulatory frameworks in Colombia and Peru, where the economic crisis has been handled relatively well.  Despite mentioning other positive considerations as well, Moodys expresses concern about the Companys substantial capital expenditure program over the next few years, the amount of near‐term consolidated debt maturing, and our belief that Enel may look to Enersis for more dividends in subsequent years. as well as the companys approach to managing liquidity based on the fact that we did not fully renew all committed credit facilities which matured in 2009.  However, in relation to the dividend issue, our dividend payout ratio for 2009 was 35%, the same as in 2008.  In addition, on the liquidity point, the report had been published before we signed additional fully committed credit facilities for approximately $ 300 million, between Enersis and Endesa Chile, during December 2009.  Economic and political stability in the countries where we operate, regulatory framework stability, structural changes affecting energy demand, and environmental issues, are some of the factors that could influence credit ratings in either direction.  The classifications might also be impacted if we face a significant change in our investments in non‐Chilean countries, important changes in our financial position, or a significant change in liquidity.  A positive change in Argentinas regulatory framework may also positively influence our credit ratings.  Positive changes in ratings may have a direct impact on our financing cost and our ability to access capital markets in better terms.  For instance, some of our credit facilities include rating grid pricing.  A recent upgrade in our local rating by Feller Rate, from AA- to AA, on April 1, 2010, positively impacted some of our local financings that contain such clauses.  The recent S&P upgrade to BBB+, from BBB, also had a positive impact on one of our Credit Support Agreements in connection with some derivative contracts.  As a result, we no longer had to tie down cash collateral for an amount of $ 127.7 million.  We believe that our recent international upgrades by Fitch and S&P, and our local ratings, by Feller Rate, reflect the strong financial risk profile and solid operational performance of the company.  On the other hand, with the positive actions taken by these agencies, Moodys currently maintains the credit rating for Enersis and Endesa Chile two notches below the other two international credit agencies.  We have accessed the international equity capital markets, with three SEC-registered ADS issuances in October 1993, February 1996 and September 2000, for Enersis, and once in 1994 for Endesa Chile.  We have also frequently issued bonds in the United States, for Enersis and Endesa Chile.  Enersis issued $ 800 million in Yankee Bonds in November 1996 and $ 350 million in November 2003.  Endesa Chile and its consolidated subsidiaries have also issued Yankee Bonds between 1996 and 2003, of which $ 917 million were outstanding as of December 31, 2009.  The following table lists the Yankee Bonds issued by Enersis and Endesa Chile outstanding as of December 31, 2009.  The weighted average annual interest rate for these SEC‐registered bonds, of which an aggregate principal amount of $ 1,518 million is outstanding as of the date of this report, is 7.9% in nominal dollars.  Issuer
     
     Maturity
     
     Coupon
     
     Aggregate Principal
Amount Outstanding(as a percentage)
     
     (in $ million)Endesa Chile
     
     August 1, 2013
     
     8.350
     %
     400Endesa Chile
     
     August 1, 2015
     
     8.625
     %
     200Endesa Chile (1)
     
     February 1, 2027
     
     7.875
     %
     206Endesa Chile (2)
     
     February 1, 2037
     
     7.325
     %
     71Endesa Chile (1)
     
     February 1, 2097
     
     8.125
     %
     40Enersis
     
     January 15, 2014
     
     7.375
     %
     350Enersis (1)
     
     December 1, 2016
     
     7.400
     %
     250Enersis (3)
     
     December 1, 2026
     
     6.600
     %
     1
 
 (1)Considers cancellation of Yankee bonds repurchased by Enersis and Endesa Chile in 2001. (2)Holders of the 7.325% Endesa Chile Yankee bonds due 2037 exercised a put option on February 1, 2009, for a total amount of $ 149.2 million.  The remaining $ 70.8 million in bonds mature in February 2037. (3)Holders of the 6.6% Enersis Yankee bonds due 2026 exercised a put option on December 1, 2003 for an aggregate principal amount of $ 149.1 million, leaving $ 0.9 million outstanding.   90


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Enersis and Endesa Chile, as well as our subsidiaries in the five countries in which we operate, have access to domestic capital markets, where we have issued debt instruments including commercial paper and medium- and long-term bonds that are primarily sold to pension funds, life insurance companies and other institutional investors.  As of the date of this report, we are in compliance with our material covenants contained in our debt instruments.  The following table lists UF‐denominated Chilean bonds issued by Enersis and Endesa Chile, outstanding as of December 31, 2009.  Issuer
     
     Maturity
     
     Coupon (inflation-
adjusted rate)
     
     Aggregate Principal
Amount Outstanding(as a percentage)
     
     (in UF million)
     
     (in $ million)Enersis Series B2
     
     June 15, 2022
     
     5.750
     %
     1.6
     
     68Endesa Chile Series F
     
     August 1, 2022
     
     6.200
     %
     1.4
     
     59Endesa Chile Series K
     
     April 15, 2027
     
     3.800
     %
     4.0
     
     165Endesa Chile Series H
     
     October 15, 2028
     
     6.200
     %
     4.0
     
     165Endesa Chile Series M
     
     December 15, 2029
     
     4.750
     %
     10.0
     
     413
  The weighted average annual interest rate for these SVS‐registered bonds, of which an aggregate principal amount of UF 21 million is outstanding as of the date of this report, is 5.0% in real terms, as adjusted by Chilean inflation.  For a full description of the local bonds issued by Enersis and Endesa Chile, see   Secured and unsecured obligations by Company in Note 18 to our Consolidated Financial Statements.  Our companies frequently participate in the international commercial bank markets governed by the law of the State of New York through both bilateral and syndicated senior unsecured loans.  Between November 2004 and December 2009, Enersis entered into three such revolving bank credit facilities.  In the same period, Endesa Chile entered into four such syndicated revolving bank credit facilities and a six‐year term loan.  These facilities were structured with various banks, for an aggregate amount of $ 650 million for Enersis and $ 850 million for Endesa Chile.  As of the date of this report, the amounts still outstanding or available for these bank loans governed by the law of the State of New York are listed below:  Borrower
     
     Type
     
     Maturity
     
     Facility Amount 
(in $ million)
     Amount Drawn
(in $ million)Enersis
     
     bilateral revolving loans
     
     December 24, 2012
     
     100
     0Endesa Chile
     
     syndicated revolving loan
     
     November 10, 2010
     
     250
     250Endesa Chile
     
     syndicated revolving loan
     
     July 26, 2011
     
     200
     200Endesa Chile
     
     syndicated revolving loan
     
     June 16, 2014
     
     200
     0Endesa Chile
     
     syndicated term loan
     
     June 16, 2014
     
     200
     200
   The Enersis revolving credit facility due December 2012 and the Endesa Chile revolving credit facility due June 2014 do not have a condition precedent requirement that there should not have occurred any Material Adverse Effect (or MAE) prior to a disbursement, allowing the companies full flexibility to draw on up to $ 300 million in the aggregate from such committed revolving facilities under any circumstances, including situations involving a MAE.  Enersis and Endesa Chile also borrow from banks in Chile under fully committed facilities in which a potential materially adverse effect would not be an impediment to this source of liquidity.  In December 2009, both companies signed 3‐year bilateral revolving loans for an aggregate of UF 4.8 million (equivalent to $ 191 million as of May 31, 2010) as detailed below.    91


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Borrower
     
     Type
     
     Maturity
     
     Facility Amount
(in UF million)
     
     Amount Drawn
(in UF million)Enersis
     
     bilateral revolving loans
     
     December 2012
     
     2.4
     
     0Endesa Chile
     
     bilateral revolving loans
     
     December 2012
     
     2.4
     
     0
  As a result of the foregoing, Enersis and Endesa Chile have access to fully committed revolving loans, both international and domestic, for up to approximately $ 1,141 million in the aggregate.  Enersis and Endesa Chile also borrow routinely from uncommitted Chilean bank facilities with approved lines of credit for approximately $ 550 in the aggregate.  Unlike the previous committed lines not subject to MAE conditions precedent subject to disbursements, this source of funding in the Chilean market is not guaranteed under all circumstances.  Also, both Enersis and Endesa Chile can tap the Chilean commercial paper market under programs that have been registered with the Chilean SVS for a maximum of $ 200 million for each borrower.  Finally, Enersis had a local bond program registered with the SVS for UF 12.5 million that has not been issued yet.  Except for the SEC-registered Yankee bonds which are not subject to financial covenants, Enersis and Endesa Chiles outstanding debt facilities include such covenants.  The types of financial covenants, and their respective limits, vary from one type of debt to another.  As of March 31, 2010, the most restrictive financial covenants affecting Enersis was the adjusted consolidated leverage test, corresponding to the revolving loan facility that matures in December 2012, while in the case of Endesa Chile, corresponds to the revolving loan facility that matures in November 2010.  Under such covenants, the maximum additional debt that could be incurred without a breach of covenant amounted to $ 7.2 billion and $ 3.9 billion for Enersis and Endesa Chile, respectively.  As is customary for certain credit and capital market debt facilities, a significant portion of Enersis and Endesa Chiles financial indebtedness is subject to cross default provisions.  Each of the revolving credit facilities described above, as well as all of Enersis and Endesa Chiles Yankee Bonds, have cross default provisions with different definitions, criteria, materiality thresholds, and applicability as to the subsidiaries that could give rise to a cross default.  Many of these cross default clauses were amended in 2009 and early 2010 with the effect that most of these clauses no longer reference any of the borrowers subsidiaries outside Chile, thereby considerably mitigating the risk of such an event of default.  The cross default provision for two of the revolving credit facilities for Endesa Chile governed by the law of the State of New York refer only to so-called Relevant Subsidiaries, a contractually defined term that refers to our most important subsidiaries.  Under such credit facilities, only matured defaults exceeding $ 50 million qualify for a potential cross default when the principal exceeds $ 50 million, or its equivalent in other currencies.  There is a complex mathematical determination to determine the list of Relevant Subsidiaries, which may vary somewhat from year to year.  As of December 2009, Endesa Chiles Relevant Subsidiaries with debt to third parties include only Emgesa and Edegel, both rated AA in the local markets.  In the case of a matured default above the materiality threshold, revolving credit facilitys lenders would have the option to accelerate if the lenders representing more than 50% of the aggregate debt of a particular facility then outstanding choose to do so.  Neither the Enersis local facility due on December 2012 nor the Endesa Chile local facility due on the same date nor the facilities maturing in June 2014 have cross default provisions to debt other than the respective borrower.  In the case of the Enersis bilateral loans maturing in December 2012, governed by the law of the State of New York, the definition of Relevant Subsidiary makes reference (by definition and not a formula) only to Endesa Chile and Chilectra, and the latter does not have any debt with third parties.  Therefore, the risk of a cross default under these bank loans is very limited, since there is no reference to subsidiaries in countries that are riskier than Chile.  After amendments in July 2009 following a successful solicitation consent, our Yankee Bonds cross default provisions may be triggered only by debt of the respective borrower or its Chilean subsidiaries.  A matured default of either Enersis, Endesa Chile or one of their respective Chilean subsidiaries could result in a cross default to Enersis and Endesa Chiles Yankee Bonds if such matured default, on an individual basis, has a principal exceeding $ 30 million, or its equivalent in other currencies.  In the case of a matured default above the materiality threshold, Yankee bondholders would have the option to accelerate if either the Trustee or bondholders representing no less than 25% of the aggregate debt of a particular series then outstanding choose to do so.  Following the 2009 Yankee amendments, a payment default or a bankruptcy/insolvency default outside of Chile has no contractual effect on our Yankee Bond indentures, no matter how material.    92


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The cross acceleration and bankruptcy/insolvency clauses of three of our four Endesa Chile UF‐denominated Chilean bonds were formally amended in February 2010 after bondholders approved such amendments in January 2010.  After giving effect to such amendments, all series of Endesa Chiles Chilean bonds reference only the borrower, and no subsidiaries, neither in Chile nor outside Chile, for those provisions.  At the time of this report, Endesa Costanera, our Argentine subsidiary, has not paid the installments due March 2010 for its supplier credit with Mitsubishi Corporation (MC) dating back to 1996.  However, on March 31, 2010, MC temporarily waived the payment due to Endesa Costanera.  The waiver also states MCs willingness to discuss a new payment date for the amount past due.  Except for Costanera, our companies have access to existing credit lines sufficient to satisfy all of its present working capital needs.  Last year, Costanera had debt maturities for approximately $ 76 million (including MCs maturities for $ 30 million).  Costaneras access to the capital markets has been very limited due to the difficult situation in Argentina, especially for the utilities sector, and the poor capital markets development due to the shortage of off-shore financing and the fund pension system nationalization.  However, Costanera was still able to refinance all those debt maturities in 2009.  Payment of dividends and distributions by our subsidiaries and affiliates represent an important source of funds for us.  The payment of dividends and distributions by certain subsidiaries and affiliates are subject to legal and contractual restrictions, such as legal reserve requirements, capital and retained earnings criteria and other restrictions.  We have been advised by legal counsel in the various geographical locations where our subsidiaries and affiliates operate that there currently are no other legal restrictions on the payment to Enersis of dividends or distributions to us in the jurisdictions where such subsidiaries or affiliates are incorporated.  Certain credit facilities and investment agreements of our subsidiaries restrict the payment of dividends or distributions in certain circumstances.  For a description of liquidity risks resulting from our company status, please see Item 3. Key Information  D. Risk factors We depend in part on payments from our subsidiaries and affiliates to meet our payment obligations in this report.  Our estimated capital expenditures for the 2010‐2014 period, expressed in dollars at internally estimated exchange rates, amount to $ 5,846 million, of which $ 4,459 million are considered non‐discretionary investments.  We include maintenance capital expenditures as non-discretionary.  It is considerably important for us to maintain the quality and operation standards required for our facilities, but we do have some flexibility regarding the timing for these investments.  We consider the investment in non-conventional renewable energy (NCRE) projects in Chile to be non-discretionary.  These investments are being made to comply with new regulations that call for 5% of the total contracted energy to be based on NCRE.  Finally, expansion projects under execution are also non‐discretionary.  We consider the remaining $ 1,387 million of the $ 5,846 million of our estimated capital expenditure for 2010-2014 to be discretionary.  The latter include expansion projects which are still under evaluation.  We do not currently anticipate liquidity shortfalls affecting our ability to satisfy the obligations described in this report.  We expect to refinance our indebtedness as it becomes due, fund our purchase obligations outlined previously with internally generated cash, and fund capital expenditures with a mixture of internally generated cash and borrowings.  Transactions that most significantly affected Enersis foreign subsidiaries liquidity in 2009 included:  ·Costanera: refinancing of all 2009 maturities for approximately $ 76 million.  Also, Costanera refinanced $ 4.3 million with Credit Suisse due in 2010, extending its maturity to 2011.  ·El Chocón:syndicated loan for $ 31 million for 3 years, which enabled the company to refinance its short-term debt.  It also arranged a 2.5-years interest rate swap for $ 30 million.  ·Edesur: refinancing of2010 debt maturities for approximately $ 46 million, extending the average life of its debt and converting all its debt into local currency.  ·Ampla:debentures for $ 146 million in two series with maturities between 3 and 6 years, whose proceeds were used to refinance short-term maturities.  ·Coelce: commercial paper for approximately $ 106 million for one year to refinance short-term debt.  The company also issued debentures for $ 130 million dollars to repay the commercial paper.  Finally, it also contracted a committed line of credit for $ 50 million.    93


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·Codensa:sale of the Codensa Hogar business portfolio, with proceeds of approximately $ 275 million for this operation.  Codensa also placed commercial paper for $ 18 million, in order to refinance short-term maturities, and issued domestic bonds for $ 31 million to finance the purchase of Electrificadora Cundinamarca.  ·Emgesa: localbonds for $ 309 million, which proceeds were used to refinance short-term maturities.  ·Edelnor:bank debt for $ 77 million.  The company also issued local bonds for $ 38 million with maturities between 3 and 6 years, which were used to refinance short term debt.  ·Edegel:local bonds for $ 34 million denominated in both dollar and local currency, used to refinance short term debt.  Edegel also renegotiated bank loans for $ 42 million, which enabled it to reduce the interest rate and extend the term.  Transactions that most significantly affected Enersis foreign subsidiaries liquidity in 2008 included:  ·Edegel: leasing agreement for $ 90 million to finance Santa Rosa project. Edegel also made bond issuances in the Peruvian market for approximately $ 29 million. Finally, the company obtained loans for $ 96 million, which were used to refinance and prepay debt.  ·Edelnor: local bonds for approximately $ 63 million with maturities between 3 and 5 years, which were used to refinance and prepay debt.  ·Costanera: debt refinancing for $ 60 million with bank loans with short and medium-term maturities and supplier financing with a 5-year maturity.  ·El Chocón: debt refinancing for $ 12 million with bank loans in local currency, extending its debt maturity and having a natural hedge in terms of currency risk.  ·Edesur: debt refinancing for $ 3 million with bank loans.  ·Ampla: debt refinancing for $ 60 million with bank loans, increasing maturity from 2 to 5 years and also improving financial conditions.  ·Coelce: financing of the 2008-2009 investment plan, for $ 203 million, through semi-public loans, taking advantage of the lower interest rates for these financings.  ·Emgesa: bank loans for $ 147 million with short term maturity.  ·Codensa: short term debt refinancing through local bond issuances for approximately $ 214 million.  C.            Research and Development, Patents and Licenses, etc.  None.  D.            Trend Information.  Enersis is a company with subsidiaries engaged in the generation, transmission and distribution of electricity in five different countries. Therefore, our businesses are subject to a wide variety of conditions that may result in variability in our earnings and cash flows from year to year. In general, our net income is a product of our operating income from our generation and distribution businesses and other factors such as income from unconsolidated related companies, foreign currency exchange rate fluctuations and taxes.  Regarding our generation business, our operating income for 2009 increased by 16.4% as compared to 2008.  This increase in the generation segment operating income from 2008 to 2009 varies in each of the five countries where we operate and is due to numerous factors, including hydrological conditions, the price of fuel used to generate electricity and the prevailing spot market and regulated prices for electricity in each of the countries in which we operate. Our generation operations in the five different countries allow us to somewhat offset and counterbalance variations with respect to these factors, but in light of the variability of these factors over time and across the countries in which we operate, we cannot ascertain the likelihood or the extent to which past performance will be indicative of future performance with respect to our generation business. A significant change with respect to hydrological conditions, fuel price or the price of electricity could affect our operating income.  94




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With respect to our distribution business, our operating income for 2009 decreased by 2.4% as compared to 2008. This decrease in the distribution segment operating income from 2008 to 2009 varies in each of the five countries where we operate due to numerous factors.  These include, among others, non-recurring tariff adjustments with effect only in 2008 and effects of regular tariff adjustments, which are partially offset by operational efficiency and the increase in electricity sales due to growth in population and gross domestic product (GDP) in the countries in which we operate. Technological advances have enabled us to limit the increase in the amount of electricity losses in our distribution operations in a challenging economic environment, while increases in GDP and population in the countries in which we operate have also contributed to the increase in demand for electricity.  While GDP and population growth have trended upward in South America, future decreases in each of such variables could negatively affect our operating income. Also, while the regulatory regimes in the countries in which we operate remain fairly stable, additional regulation, especially regulations concerning the price at which we may sell electricity, could affect our operating income.  Variability in our earnings and cash flows can also arise from non-operating factors as well, such as foreign currency exchange rates.  For further information regarding 2009 results of the Company compared with those recorded on previous periods, please see   A. Operating Results - Enersis Results of Operations for the Years Ended December 31, 2008 and December 31, 2009 and  A. Operating Results - Enersis Results of Operations for the Years Ended December 31, 2007 and December 31, 2008 above.  Investors should not look at our past performance as indicative of future performance.  E.            Off-balance Sheet Arrangements.  Enersis is not a party to any off-balance sheet arrangements.  F.            Tabular Disclosure of Contractual Obligations.  The table below sets forth the Companys cash payment obligations as of December 31, 2009:  Enersis on a consolidated basis  Ch$ billion
     
     Total
     
     2010
     
     2011- 2012
     
     2013- 2014
     
     After
2014Bank debt
     
     961
     
     307
     
     510
     
     143
     
     1Local bonds
     
     1,714
     
     193
     
     390
     
     295
     
     836Yankee bonds(1)
     
     770
     
     
     
     
     
     380
     
     389Other debt
     
     462
     
     153
     
     181
     
     98
     
     30Interest expense
     
     1,421
     
     283
     
     416
     
     231
     
     492Pension and post-retirement obligations(2)
     
     270
     
     5
     
     81
     
     75
     
     108Purchase obligations(3)
     
     29,034
     
     2,194
     
     3,987
     
     3,251
     
     19,602Financial leases
     
     121
     
     15
     
     41
     
     16
     
     48Total contractual obligations
     
     34,752
     
     3,150
     
     5,607
     
     4,489
     
     21,506
 
 (1)Net payment of Enersis currency swaps during 2009 was for a total amount of Ch$ 5.7 billion. (2)We have funded and unfunded pension and post-retirement benefit plans.  Our funded plans have contractual annual commitments for contributions which do not change based on funding status.  Cash flow estimates in the table are based on such annual contractual commitments including certain estimable variable factors such as interest.  Cash flow estimates in the table relating to our unfunded plans are based on futurediscountedpayments necessary to meet all of our pension and post-retirement obligations.  The amount of $ 108  million in the After 2014 column includes all of our cash flow estimates relating to our unfunded plans plus one years estimate of our contractual commitment for our funded plans (we estimate that our contractual commitments for our funded plans are equal to $ 29,702  million per annum).  However, we have estimated that we will have $ 29,702 million in cash flow commitments in connection with such funded plans.  We have only included one year of cash flow estimates for our funded plans in this column because such plans do not have an expiration or settlement date and therefore the aggregate of our obligations related to such plans after 2014  would not accurately represent our year-to-year cash commitments. (3)Includes generation and distribution business purchase obligations comprised mainly of energy purchases, operating and maintenance contracts and other services.    95


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G.           Safe Harbor.  This Item 5. Operating and Financial Review and Prospects, contains information that may constitute forward‐looking statements.  See Forward-Looking Statements in the Introduction of this report, for safe harbor provisions.  Item 6.   Directors, Senior Management and Employees A.            Directors and Senior Management. We are managed by our Board of Directors, which consists of seven members who are elected for a three‐year term at an Ordinary Shareholders Meeting or OSM.  If a vacancy occurs in the interim, the Board of Directors elects a temporary director to fill the vacancy until the next OSM, where the entire Board of Directors will be elected.  Our Executive Officers are appointed by the Board of Directors and hold office at the discretion of the Board.  Set forth below are the members of our Board of Directors as of December 31, 2009.  Mr. Pedro Larrea resigned from the Board in July 2009.  Directors
     Position
     Held SincePablo Yrarrázaval V. (1)
     Chairman
     2002Andrea Brentan (2)
     Vice Chairman
     2009Patricio Claro G.(1)(3)
     Director
     2006Rafael Miranda R.
     Director
     1999Hernán Somerville S. (1)(3)
     Director
     1999Eugenio Tironi B.
     Director
     2000
   (1)   Member of the Directors Committee. (2)   Appointed Board member in July 2009. (3)   Member of the Audit Committee. Mr. Juan Eduardo Errázuriz O. resigned from the Board of Directors on October 2009. The appointment of his replacement was made at the Ordinary Shareholders Meeting of 2010. Set forth below are brief biographical descriptions of our directors, four of whom reside in Chile and two of whom reside in Spain, as of December 31, 2009. Pablo Yrarrázaval V. Chairman of the Board of Directors and Chairman of the Directors Committee Mr. Yrarrázaval became Chairman of the Board of Directors in July 2002 and has been Chairman of the Directors Committee since April 2003.  Mr. Yrarrázaval is a partner in the brokerage firmCorredora de Bolsa Yrarrázaval y Compañía Limitada, Vice Chairman ofDepósito Central de Valores S.A., DCV, and is also Chairman of the Santiago Stock Exchange, a position he has occupied since 1989.  Before Mr. Yrarrázaval became Chairman of Enersis, he was Chairman of Endesa Chile. Andrea Brentan Vice Chairman of the Board of Directors Mr. Brentan is a Mechanical Engineer fromPolitécnico di Milanoand holds an MS in Applied Science from New York University.  Mr. Brentan was a research assistant at New York University from 1975 to 1977 and then held various positions at GIE, an Italian power plant contractor operating worldwide, until the beginning of 1991.  From 1991 to 1999, he successively held the positions of CFO, General Manager and CEO at Sae Sadelmi, a Milan-based company belonging to the ABB Group which engages in power plant engineering, procurement and construction and electrical generation equipment manufacturing and service.  From 2000 to 2002, he was the Head of the Worldwide Steam Power Plant Business at Alstom, based in Paris.  He joined Enel in November 2002, where he held several positions in the company, including: Head of Business Development and M&A unit of the International Division, Chairman ofViesgo S.A., Chairman of Enel North America, Enel Latin America andSlovenske Elektrarneand Director of Enel Energy Europe. Until June 2009, he served as Director of the Iberian Peninsula and Latin American Division of Enel and Vice Chairman of the Board of Endesa Spain, when he became CEO of Endesa Spain.  96


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Patricio Claro G. Director of the Board, Member of the Directors Committee and Member of the Audit Committee Mr. Claro is a Civil Industrial Engineer fromUniversidad de Chile.Mr. Claro is a board member ofIndustrias Forestales S.A., Cía. de Seguros BiceVida S.A., Parque Arauco S.A.andBanco Bice.  Additionally, he serves as a board member ofCámara de Compensación Interbancaria de Pagos de Alto Valor, Combanc S.A., and has been a board member ofCristalerías de Chile, Cía. Sudamericana de Vapores,Gener, Pilmaiquén, CTC,Cía. Chilena de FósforosandBanco Santander.Mr. Claro has been an Enersis board member and a member of the Directors Committee since April 2006 and a member of Enersis Audit Committee since October 2007. Rafael Miranda R. Director of the Board Mr. Miranda holds a B.Sc. in Industrial Engineering fromComillas University(ICAI) and a Masters Degree in Management Science from the School of Industrial Organization.  Mr. Miranda joined Endesa Spain in 1987.  From 1987 to 1997, he was Managing Director.  Between February 1997 and June 2009, he served as CEO.  Currently, Mr. Miranda is Chairman of Endesa Foundation, Honorary Chairman ofEurelectric(European Electricity Association), Chairman of the Social Council of Burgos University and Chairman of the Spanish Council ofINSEAD.  Hernán Somerville S. Director of the Board Mr. Somervillehas a law degree fromUniversidad de Chileand an M.C.J. degree from New York University Law School.Since 1989, Mr. Somerville has been the Managing Director and Partner ofFintec, an investment, advisory and management company.  From 1983 to 1988, Mr. Somerville was Director of the Chilean Central Bank, serving as Chief Debt Negotiator for Chilean public debt and private commercial bank debt.  Mr. Somerville was the former Chairman of the Confederation of Production & Commerce in Chile.  He is also the non-executive Chairman of the Chilean Association of Banks and Financial Institutions, former Chairman of the Latin American Federation of Banks and Chairman ofTransbank S.A., which manages credit and debit cards in Chile.He is also a Board Member ofCorp Banca, INACAP, and has been a Director of Enersis since 1999.Mr. Somerville is one of the three Chilean representatives at the Asia Pacific Economic Councils Business Advisory Committee, and is Chairman of the Chilean Pacific Foundation.  Eugenio Tironi B. Director of the Board Mr. Tironi received a Ph.D. in sociology fromLÉcole des Hautes Étudesen Sciences Sociales(Paris, France).  He is currently a researcher atCIEPLAN, a professor atUniversidad Adolfo Ibañezand a member of the Board of Trustees ofUniversidad Alberto Hurtado.  He is also a board member of different non-profit organizations, such asPaz Ciudadana,Un techo para ChileandFundación Orquestas Sinfónicas Juveniles e Infantiles.Mr. Tironi has published seventeen books in Chile and abroad, and is a regular columnist of the newspaperEl Mercurio.Between 1990 and 1994, Mr. Tirnoni was a Director of the Secretariat of Communication and Culture of the Chilean Government.  Mr. Tironi was also a visiting professor at Notre Dame University (USA) in 2002, andSorbonne-Nouvelle(France) in 2006.  In addition, since 1994, he has been the Chairman ofTironi Asociados, a strategic communications firm, which advises Chilean and international firms in several Latin American countries.  Mr. Tironi has been a Director of Enersis since July 2000.  A new Board of Directors was appointed at the OSM held on April 22, 2010.  The newly appointed directors are: Messrs. Leonidas Vial E. and Rafael Fernández M.  Additionally, the following directors were reelected: Messrs. Pablo Yrarrázaval V., Andrea Brentan, Rafael Miranda R., Hernán Somerville S. and Eugenio Tironi B.   97


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Executive Officers (as of December 31, 2009) Position
     Current Position Held SinceIgnacio Antoñanzas A.
     Chief Executive Officer
     2006Ramiro Alfonsín B.
     Planning and Control Officer
     2007Angel Chocarro G.
     Accounting Officer
     2009Alfredo Ergas S.
     Chief Financial Officer
     2003Juan Pablo Larraín M.
     Communications Officer
     2009Francisco Silva B.
     Human Resources Officer
     2003Domingo Valdés P.
     General Counsel
     1999Antonio Zorrilla O.
     Auditing Officer
     2007
  Set forth below are brief biographical descriptions of our Executive Officers, all of whom reside in Chile:  Ignacio Antoñanzas A.was appointed CEO of Enersis in October 2006.  Mr. Antoñanzas holds a degree in Mining Engineering with a major in energy and fuels from theUniversidad Politécnica de Madrid.  He started his career as a commodities trader.  He joined Endesa Spain in 1994, having worked mainly during his professional career in generation and corporate strategy areas.  He has been the CEO of Endesa Net Factory and Director of Endesa Italia.  Until assuming his current position, he served as Deputy General Manager of Strategy for Endesa Spain.  Since June 2009, he also serves as Executive Vice president at Endesa Spain in charge of Latin America.  Ramiro Alfonsín B.holds a degree in Business Administration from thePontificia Universidad Católica de Argentina.  He joined the Endesa Spain Group in June 2000, having worked in Endesa Net Factory as Investment and Risk Capital Manager and later as Planning and Control Manager.  Subsequently, he worked in Endesa Italia as a Planning and Investment Deputy Director and in Endesa Europe as Investment and Corporate Relations Deputy Director.  In March 2007, he joined Enersis as Planning and Control Officer.  Currently, Mr. Alfonsín is a board member of several companies of the Enersis in Argentina, Brazil and Peru.  Before joining the Endesa Group, Mr. Alfonsín worked as Senior Financial Advisor atBanco Urquijo KBL Group, as Management Advisor of the Corporate Development and Institutional Relations Department at Alcatel, and also as Corporate Banking Associate at ABN Amro Bank N.V.  Ángel Chocarro G., Enersis Accounting Officer since November 2009, has a degree in Economics and Business Administration fromUniversidad del País Vasco.  Mr. Chocarro has held several positions in both the Enersis and the Endesa Spain Group.  From 2005 to 2009, he was Enersis Director of Consolidation, Internal Controls, and Accounting Criteria.  Alfredo Ergas S. is a commercial engineer fromUniversidad de Chile, and has an MBA degree from Trium Global Executive MBA, an alliance between NYU, HEC and LSE.  Mr. Ergas has been the CFO of Enersis since July 2003, after having held a similar position at Endesa Chile.  Before that, Mr. Ergas served as CFO and Chief Controlling Officer of the Chilean telecommunications company,Smartcom, from 2000 to 2002.  Prior to that, Mr. Ergas served as Deputy Chief Financial Officer of Endesa Chile and later in Enersis as Planning and Control Director.  Mr. Ergas joined the Enersis in April 1993.  Juan Pablo LarraínM.graduated from Journalism atFinis Terrae University(Chile) and holds a Masters Degree in Professional Journalism fromComplutense University(Spain).  He joined the Enersis in August 2006 as Chilectras Communications Officer.  On November 1, 2009, he was appointed Enersis Communication and Endesa Spains Communication Officer for Latin America and Chile.  Before joining the Enersis, he worked as Editor in Chief ofDiario Financiero; Communications Officer at Hill & Knowlton Chile, National Editor atEl Mercurio(Valparaíso) and News Service Editor at Red TV.   98


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Francisco Silva B.holds a degree in public administration fromUniversidad de Chile, and received a D.P.A. fromUniversidad Adolfo Ibáñezin 1986.  Mr. Silva joined Chilectra in 1987 and has worked primarily in human resources and general management positions in several subsidiaries and affiliates of Enersis.  Between 1998 and 2000, and since July 2003, he has been the Enersis Human Resources Officer.  From January  2001 to June 2003, he worked as Adjunct Director of an Endesa Spain subsidiary in Spain.  Domingo ValdésP.has been General Counsel since May 1999.  Mr. Valdés is a lawyer fromUniversidad de Chilewith a Master of Laws Degree from the University of Chicago.  He joined the Enersis as a corporate attorney at law for Chilectra in 1993 and became General Counsel at Enersis in December 1997.  Mr. Valdés worked as an intern at the New York City law firms of Milbank, Tweed, Hadley & McCloy and Chadbourne & Parke LLP.  Before joining Chilectra, Mr. Valdés was a lawyer at Chase Manhattan Bank, N.A., Corporate Department (Chile) and an associate at Carey & Cía., a Santiago based law firm.  Mr. Valdés is also Secretary of the Enersis Board of Directors and a Professor of Economic and Antitrust Law atUniversidad de ChileLaw School.  Antonio Zorrilla O.was appointed Auditing Officer in August 2007.Mr. Zorrilla holds a degree in Mining Engineering from theUniversidad Politécnica de Madridand theRheinisch-Westfälische Technische Hochschule Aachen(RWTH) and holds a joint M.Sc. in Natural Resources Management from the Helsinki University of Technology (HUT), the Royal School of Mines, theTechnische Universiteit Delftand the RWTH.  Prior to joining the Enersis, Mr. Zorrilla served as Auditing Team Chief at the Auditing Corporate Direction at Endesa Spain.  Prior to that, Mr. Zorrilla served as consultant at PriceWaterhouseCoopers and IBM Spain.  During 2010 Antonio Zorrilla O. left his position.  The new Auditing Officer is Ms. Alba Marina Urrea.  B.  Compensation. Directors are paid a variable annual fee, depending on net earnings of the Company and a monthly fee paid in advance, depending on their attendance to the board meetings and their participation as Director of any of our subsidiaries.  In 2009, the total compensation paid to each of our directors, including fees for attendance at meetings of the Directors Committee and of the Audit Committee, was as follows:  Director
     
     Fixed
Compensation
     
     Audit and Directors Committee
     
     Variable Compensation
     
     TotalYear ended December 31, 2009 (in thousands of Ch$)Pablo Yrarrázaval V.
     
     55,011
     
     8,388
     
     100,970
     
     164,369Patricio Claro G.
     
     28,280
     
     3,825
     
     50,485
     
     82,589Juan Eduardo Errázuriz O.(1)
     
     23,698
     
     3,061
     
     41,633
     
     68,392Pedro Larrea P.(2)
     
     16,856
     
     -
     
     -
     
     16,856Rafael Miranda R.
     
     35,854
     
     -
     
     65,008
     
     100,862Hernán Somerville S.
     
     28,280
     
     12,987
     
     50,485
     
     91,752Eugenio Tironi B.
     
     28,280
     
     -
     
     50,485
     
     78,764Total.
     
     216,257
     
     28,262
     
     359,065
     
     603,584
 
 (1)   Mr. Errázuriz ceased to be a Director of Enersis in October 2009. (2)   Mr. Larrea ceased to be a Director of Enersis in July 2009.  We do not disclose, to our shareholders or otherwise, information on individual executive officers compensation.  For the year ended December 31, 2009, the aggregate gross compensation paid or accrued, including performance-based bonuses for the Executive Officers of Enersis, was Ch$ 2,400 million.  Enersis Executive Officers are eligible for variable compensation under a bonus plan for meeting company-wide objectives and for their individual contribution to the Companys results and objectives.  The annual bonus plan provides for a range of bonus amounts according to seniority level.  The bonuses eventually paid to executives consist of a certain number of gross monthly salaries.  The amount set aside or accrued by the Company to provide severance indemnities to its executive officers amounts to Ch$ 380 million, of which Ch$ 36 million were accrued during 2009.  All of our executive officers have severance indemnity agreements with the Company in the event of voluntary resignation, mutual agreement among the parties, or death.  They do not have a right to severance indemnity if the relationship with the Company is terminated due to willful misconduct, prohibited negotiations, unjustified absences, abandonment of duties, among other causes, as defined in article 130 of the Chilean Code of Labor.  All of the Companys employees are entitled to legal severance pay if dismissed due to needs of the Company, as defined in article 161 of the Chilean Labor Code.    99


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C.            Board Practices.  The Board of Directors as of December 31, 2009 was elected at the OSM of April 1, 2008.  After the OSM held on April 2009, two vacancies occurred in the Board of Directors; thus, a Board of Directors election took place at the OSM on April 22, 2010, and the term for this new Board of Directors will expire in April 2013.  For information as to the years in which each director began his service at the board, please see  A. Directors and Senior Management above.  The members of the Board of Directors do not have service contracts with Enersis or any of its related companies that provide benefits upon termination of employment.  Corporate Governance Enersis is managed by its Executive Officers under the direction of its Board of Directors which, in accordance with its bylaws, consists of seven directors who are elected at an OSM.  Each director serves for a three-year term and the term of each of the seven directors expires on the same day.  The directors can be reelected indefinitely.  Staggered terms are not permitted under Chilean law.  If a vacancy occurs on the board during the three-year term, the Board of Directors may appoint a temporary director to fill the vacancy.  Any vacancy will trigger an election for every seat on the Board of Directors at the next OSM.  Chilean corporate law provides that a companys board of directors is responsible for the management, administration and representation of a company in all matters concerning its corporate purpose, subject to the provisions of the companys bylaws and the stockholders resolutions.  In addition to the bylaws, the Enersis Board of Directors has adopted regulations and policies that guide our corporate governance principles.  The Internal Regulations on Conduct in the Securities Markets, approved by the Board on January  31, 2002, defines the rules of conduct that must be followed by members of the Board of Directors, senior management and other executives and employees who, due to the nature of their job responsibilities, may have access to sensitive or confidential information, with a view to contributing to transparency and to the protection of investors.  These regulations are based on the principles of impartiality, good faith, placing the companys interests before ones own, and care and diligence in using information when acting in the securities markets.  The Charter Governing Executives, approved by our Board on May 28, 2003, and the Employee Code of Conduct, explain our principles and ethical values, establish the rules governing our contact with customers and suppliers, and establish the principles that should be followed by employees, including ethical conduct, professionalism and confidentiality.  They also impose limitations on the activities that our executives and other employees may undertake outside the scope of their employment with us.  In order to ensure compliance with Securities Market Law 18,045 and SVS regulations,our Board of Directors at its meeting held on May28, 2008, approved the Manual for the Management of Information of Interest to the Market, or Manual.  This document addresses applicable standards regarding the information of transactions of the Companys securities or those of its affiliates by directors, management, principal executives, employees and other related parties; existence of blackout periods for such transactions by directors, principal executives and other related parties; existence of mechanisms for the continuous disclosure of information that is of interest to the market; and mechanisms that provide protection for confidential information.  The Manual was informed to the market on May 30, 2008 and posted on the companys website www.enersis.cl.  In February 2010, the Manual was modified in order to comply with the provisions of Law No. 20,382 (Corporate Governance Improvement Law).  The provisions of this Manual shall be applied to the members of our Board, as well as Enersis executives and employees who have access to privileged information, and especially those who work in areas related to the securities markets.  Compliance with NYSE Listing Standards on Corporate Governance The following is a summary of the significant differences between our corporate governance practices and those applicable to domestic issuers under the corporate governance rules of the New York Stock Exchange.   100


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Independence and Functions of the Audit Committee Under the NYSE corporate governance rules, all members of the Audit Committee must be independent.  We have been subject to this requirement since July 31, 2005.  Under the NYSE corporate governance rules, the audit committee of a U.S. company must perform the functions detailed in, and otherwise comply with the requirements of NYSE Listed Company Manual Rules 303A.06 and 303A.07.  Non-U.S. companies have been required to comply with Rule 303A.06 beginning July 31, 2005, but are not required to comply with Rule 303A.07.  Since July 31, 2005, we have complied with the independence and the functional requirements of Rule 303A.06.  As required by the Sarbanes-Oxley Act and the NYSE corporate governance rules, on June 29, 2005, the Enersis Board of Directors created an Audit Committee, composed of three directors who are also members of the Board.  According to the Companys bylaws, all of the members of this Committee must satisfy the NYSE requirements for independence.  As required by Chilean Law, Enersis also has aDirectors Committeecomposed of three members of the Board, which is required to be composed of a majority (two out of three members) directors independent to the controlling shareholder (non-control directors).In casethere were not sufficient non-control directors on the Board to serve on the committee, it could be composed by a majority of directors nominated with the votes of the controlling shareholders.  As of December 31, 2009, our Directors Committee was composed of one non-control director and two directors nominated with the votes of the controlling shareholder.  Our Directors Committee performs the following functions:  ·examination of Annual Report, Financial Statements and the Reports of the External Auditors and Inspectors of the Accounts;  ·formulation of the proposal to the Board of Directors for the selection of external auditors and private rating agencies;  ·examination of information related to operations by the Company with related parties and/or related to operations in which the Company boards members or relevant executive officers may have personal interest;  ·examination of the compensation framework and plans for managers and executive officers; and  ·any other function mandated to the committee by the bylaws, the Board of Directors or the Shareholder of the Company.  As of December 31, 2009, Pablo Yrarrázaval, Chairman of the Board, has also served as chairman of this committee, since July 31, 2002.  The other members were Herrnán Somerville and Patricio Claro.  The Audit Committee performs the following functions:  ·proposal for the appointment and compensation of independent auditors at OSM;  ·oversight of  the work of independent auditors;  ·pre-approval of audit and non- audit services provided by the independent auditors; and  ·establishment of procedures for receiving and dealing with complaints regarding accounting, internal control and auditing matters.  As of December 31, 2009, the members of this Committee, all of whom satisfied the requirements of independence of NYSE, were Messrs. Patricio Claro and Hernán Somerville.  Corporate Governance Guidelines The NYSEs corporate governance rules require U.S.-listed companies to adopt and disclose corporate governance guidelines.  Although Chilean law does not contemplate this practice (except for the Manual), the Company has adopted the codes of conduct described above, and at its Extraordinary Shareholders Meeting or ESM held on March 2006, approved the inclusion of articles in its bylaws that govern the creation, composition, attributions, functions and retribution of the Directors Committee and the Audit Committee.  101


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On October 20, 2009, Law 20,382, which amended the Chilean Companies Act, was established, introducing changes to the rules governing corporate governance of the companies.  In order to comply with the new requirements of this law, at the ESM of April 22, 2010, the shareholders of the company approved amendments to the Companys bylaws, including amendments providing for the merger of the Directors and Audit Committees.  The new Directors Committee is composed of three members that comply with the independence requirements of the Sarbanes-Oxley Act and the NYSE corporate governance rules.  The members of this merged committee are Messrs. Hernán Somerville S., Leonidas Vial E. and Rafael Fernández M.  Such committee includes among its functions the duties previously performed by the Audit Committee.   102


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D.Employees.  The following table provides the total number of full time employees at the Company and its subsidiaries for the past three fiscal years:  Company
     
     2007 (3)
     
     2008 (3) (4)
     
     2009In ArgentinaEndesa Costanera
     
     273
     
     274
     
     281El Chocón
     
     50
     
     51
     
     51Edesur
     
     2,526
     
     2,577
     
     2,606Other businesses (1)
     
     213
     
     177
     
     151Total personnel in Argentina
     
     3,062
     
     3,079
     
     3,089In BrazilCachoeira Dourada
     
     65
     
     63
     
     66Fortaleza
     
     59
     
     62
     
     69CIEN
     
     59
     
     66
     
     63Ampla
     
     1,383
     
     1,296
     
     1,233Coelce
     
     1,234
     
     1,190
     
     1,201Endesa Brasil
     
     32
     
     37
     
     41Other businesses (1)
     
     282
     
     409
     
     233Total personnel in Brazil
     
     3,114
     
     3,123
     
     2,906In ChileEndesa Chile
     
     525
     
     554
     
     595Pehuenche
     
     3
     
     3
     
     3Pangue
     
     
     
     
     
     San Isidro
     
     
     
     
     
     Celta
     
     1
     
     1
     
     1Ingendesa
     
     289
     
     418
     
     417Túnel El Melón
     
     23
     
     24
     
     16GasAtacama
     
     
     
     92
     
     96Hidroaysén
     
     
     
     26
     
     29Consorcio Ara-Ingendesa
     
     
     
     5
     
     15Enersis
     
     222
     
     232
     
     301Chilectra
     
     728
     
     717
     
     731Other businesses (2)
     
     797
     
     965
     
     851Total personnel in Chile
     
     2,588
     
     3,037
     
     3,055In ColombiaEmgesa
     
     399
     
     404
     
     415Codensa.
     
     913
     
     923
     
     1,015Other businesses(1)
     
     246
     
     287
     
     208Total personnel in Colombia
     
     1,558
     
     1,614
     
     1,638In PeruEdegel
     
     206
     
     219
     
     224Edelnor
     
     540
     
     542
     
     577Other businesses(1)
     
     218
     
     198
     
     134Total personnel in Peru
     
     964
     
     959
     
     935Total personnel of Enersis and Subsidiaries
     
     11,286
     
     11,812
     
     11,623
 
 (1)Includes CAM and Synapsis. (2)Includes CAM, Synapsis and IMV. (3)2007 and 2008 figures differs with last year 20F form reported figures, due to the elimination of the following companies, which do not consolidate into Endesa Chiles financial statements: Cemsa,Central Dock Sud S.A., Sucursal Endesa Latinoamérica, S.A.,Fundación Endesa Colombiaand EEPSA. (4)Since 2008, the following companies start being consolidated into Endesa Chiles financial statements: GasAtacama, HidroAysén andConsorcio Ara-Ingendesa.  As of the same date,Sistema SEC, was consolidated into Enersis financial statement.    103


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The following table provides the total number of temporary employees at the Company and its subsidiaries for the past three fiscal years:  Company
     
     2007 (3)
     
     2008 (3) (4)
     
     2009In ArgentinaEndesa Costanera
     
     -
     
     -
     
     -El Chocón
     
     -
     
     -
     
     -Edesur
     
     8
     
     13
     
     22Other businesses (1)
     
     2
     
     1
     
     1Total personnel in Argentina
     
     10
     
     14
     
     23In BrazilCachoeira Dourada
     
     -
     
     -
     
     -Fortaleza
     
     1
     
     1
     
     1CIEN
     
     1
     
     1
     
     1Ampla
     
     2
     
     2
     
     2Coelce
     
     69
     
     88
     
     97Endesa Brasil
     
     -
     
     -
     
     -Other businesses (1)
     
     86
     
     78
     
     17Total personnel in Brazil
     
     159
     
     170
     
     118In ChileEndesa Chile
     
     9
     
     5
     
     3Pehuenche
     
     -
     
     -
     
     -Pangue
     
     -
     
     -
     
     -San Isidro
     
     -
     
     -
     
     -Celta
     
     -
     
     -
     
     -Ingendesa
     
     269
     
     301
     
     170Túnel El Melón
     
     2
     
     1
     
     -Gasatacama
     
     -
     
     -
     
     -Hidroaysén
     
     -
     
     -
     
     -Consorcio Ara-Ingendesa
     
     -
     
     -
     
     -Enersis
     
     -
     
     -
     
     -Chilectra
     
     -
     
     -
     
     -Other businesses (2)
     
     -
     
     9
     
     5Total personnel in Chile
     
     280
     
     316
     
     178In ColombiaEmgesaCodensa
     
     18
     
     9
     
     2Other businesses(1)
     
     75
     
     143
     
     276Total personnel in Colombia
     
     93
     
     152
     
     278In PeruEdegel
     
     20
     
     23
     
     15Edelnor
     
     4
     
     29
     
     18Other businesses(1)
     
     116
     
     218
     
     217Total personnel in Peru
     
     140
     
     270
     
     250Total personnel of Enersis and Subsidiaries
     
     682
     
     922
     
     847
 
 (1)Includes CAM and Synapsis. (2)Includes CAM, Synapsis and IMV. (3)2007 and 2008 figures differs with last year 20F form reported figures, due to the elimination of the following companies, which do not consolidate into Endesa Chiles financial statements: Cemsa,Central Dock Sud S.A., Sucursal Endesa Latinoamérica, S.A.,Fundación Endesa Colombiaand EEPSA, and also as CAM Peru and Colombia employees were not included before (4)Since 2008, the following companies start being consolidated into Endesa Chiles financial statements: GasAtacama, HidroAysén andConsorcio Ara-Ingendesa.  As of the same date,Sistema SEC, was consolidated into Enersis financial statement.   104


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Chile  During 2007, we entered into two collective agreements with our employees, which expire in 2011.  In Endesa Chile, there are six worker unions, one of which was created in 2008.  In 2008, this new union signed a collective bargaining agreement that expires in June 2011.  On that same year, Endesa Chile signed three other collective agreements, two of which will expire in December 2011 and one in June 2012.  Finally, during 2009, it entered into two collective bargaining agreements with its employees, which expire in 2011.  Five collective bargaining agreements with Chilectra employees took effect in December 2008 and expire in December 2012.  At CAM, a new executives union signed a collective bargaining agreement that expires in June 2011.  Three new collective agreements were renewed, one until December 2010 and the two remaining until December 2011.  Synapsis entered into a new collective bargaining agreement with its employees, expiring in August 2012.  At Ingendesa, there are three worker unions, with a collective bargaining agreement expiring in December 2011.  Argentina  Five collective bargaining agreements are still valid, and during 2009 no new agreements were signed because the aforementioned agreements are currently valid until a new agreement is signed, despite having expired.  Brazil  Four collective bargaining agreements are in force.  During 2009, one new agreement was signed at Cachoeira Dourada, three new agreements at Ampla, two new agreements at Cien and two new agreements at Fortaleza; all of them for a two-year term, except for Amplas agreement.  In 2008, three new agreements were signed at Cachoeira Dourada, CAM and Coelce.  Brazilian law stipulates that collective bargaining agreements cannot last for more than two years.  Colombia  In 2009, no new collective bargaining agreements were signed.  Typically, collective bargaining agreements have two-year terms.  However, there are no legal restrictions on the maximum duration of such agreements.  Peru  Two collective bargaining agreements are still in force.  During 2009, Edelnor signed four new collective bargaining agreements, which will expire in 2013.  On the other hand, Edegel signed one new agreement, with maturity in 2014.  E.            Share Ownership.  To the best of the Companys knowledge, none of Enersis directors or officers owns more than 0.1% of the shares of the Company.  None of Enersis directors and officers has any stock options.  It is not possible to confirm whether any of our directors or officers has a beneficial, rather than direct, interest in the shares of Enersis. To the best of our knowledge, any share ownership by all of the directors and officers of Enersis, in the aggregate, amount to significantly less than 10% of our outstanding shares.  Item 7.   Major Shareholders and Related Party Transactions  A.            Major Shareholders.  Enersis only outstanding voting securities are shares of common stock.  As of March 31, 2010, our 32,651,166,465 shares of common stock outstanding were held by 7,933 stockholders of record.  Endesa Spain beneficially owns 60.6% of the shares of Enersis.  Chilean private pension funds,Administradora de Fondos de Pensiones, or AFPs, own 15.3% in the aggregate.  Chilean stockbrokers, mutual funds, insurance companies, foreign equity funds, and other Chilean institutional investors collectively own 6.9 % of our equity.  ADR holders own 13.5% of the equity.  The remaining 3.7% is held by 7,785 minority shareholders.    105


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The bylaws call for seven members of the Board of Directors.  As of December 31, 2009, there is a vacancy on our Board of Directors, and the Board has been meeting with six members.  Five out of those six members were elected by the vote of Endesa Spain.  Endesa Spain has exerted majority control over Enersis since April 1999.  The following table sets forth certain information concerning ownership of the common stock as of March 31, 2010, with respect to each stockholder known to us to own more than 5% of the outstanding shares of common stock:  Number of
Shares Owned
     
     Percentage of Shares
OutstandingEndesa Spain(1)
     19,794,583,473
     
     60.62%
 
 (1)Endesa Spains 60.62% interest is held throughEndesa Latinoamérica.  On March 26, 2007, Spanish company Acciona and Italian company Enel, executed an agreement for the joint management of Spanish company, Endesa Spain.  The latter, through its Spanish subsidiary Endesa Latinoamérica holds 60.6% of the share capital of Enersis.  On February 20, 2009, Acciona and Enel reached an agreement whereby Acciona would transfer directly and indirectly to Enel Energy Europe S.L., wholly owned by Enel, its 25.0% shareholding in Endesa Spain, subject to certain conditions, which were subsequently met.  In accordance with the agreement, Enel paid Acciona  9,627 million.  The amount was determined by subtracting the dividends distributed by Endesa Spain and received by Acciona after February 20, 2009 ( 1,561 million) from the cash consideration of the agreement established on that same date ( 11,107 million) and adding interest accrued as from the agreement date ( 81 million).  On June 25, 2009, the shares were transferred, making Enel the ultimate controlling shareholder of Enersis by virtue of its 92.1% shareholding in Endesa Spain.  This transaction was reported to the Spanish National Securities Market Commission (CNMV in its Spanish acronym) as material information on the same date.  In addition, during 2009, Endesa Spain transferred to Acciona certain wind and hydroelectric energy generation assets in Spain and Portugal priced at  2,814 million.  B.            Related Party Transactions.  Article 146 of the Corporation Law defines related-party transactions as all operations involving the company and any entity belonging to the corporate group, its parent companies, controlling companies, subsidiaries or related companies, board members, managers, administrators, senior officers or company liquidators, including their spouses, some of their relatives and all entities controlled by them, in addition to individuals who may appoint at least one member of the companys administration or who control 10% or more of voting capital.  As required by law, related-party transactions must be carried out in line with corporate interests, as well as prices, terms and conditions prevailing on the market upon being approved, and meet all legal requirements, including board acknowledgement and approval of the transaction, in addition to approval by the ESM in some cases, with requisite majority approval and pursuant to regulatory procedures.  The aforementioned law also provides for some exceptions, stating that in certain cases Board approval would suffice for related-party transactions to be carried, pursuant to certain related-party transaction thresholds and when such transactions are conducted in compliance with the related-party policies defined by the companys board.  At its meeting held on December 17, 2009, Enersis Board of Directors approved a related‐party policy (política de habitualidad)effective as of January 1, 2010.  This policy is available on the companys website.  Should an operation not be carried in compliance with the aforementioned rules, the company or shareholders may demand compensation from the individual associated with the infringement, as provided under law, in addition to a reparation for damages.  It is our policy that all cash inflows and outflows of our Chilean subsidiaries are managed through our centralized cash management policy. It is a common practice in Chile to transfer surplus funds from one company to another affiliate that has a cash deficit.  These operations are carried out through either short-term loans or through structured inter-company loans.  Under Chilean laws and regulations, such transactions must be carried out on an arms-length basis.  Our centralized cash management is more efficient for both financial and tax reasons.  All of these operations are subject to the supervision of our Directors Committee.  As of December 2009, then operations were priced at TIP (Chilean variable interest rate) + 0.05% per month.   106


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In other countries in which we do business, these inter-company transactions are permitted but they have adverse tax consequences.  Accordingly, we do not similarly manage the cash flows of our non-Chilean subsidiaries.  Enersis has also made structured loans to its Chilean subsidiaries, at the same cost of funds for Enersis, primarily to finance foreign investments.  As of December 31, 2009, the outstanding net balance for such loans was $ 335 million, and the largest amount outstanding during 2009 and 2008 was $ 504 million and $ 674 million, respectively.  Additionally, there were no outstanding loans granted by Enersis to its foreign subsidiaries as of December 31, 2009.  The currency denomination of the structured loans granted by Enersis to its Chilean subsidiaries as of December 31, 2009 is the US dollar.  The interest rate on these intercompany loans to Enersis Chilean subsidiaries ranges from LIBOR plus 0.5% to LIBOR plus 5.57%, with a nominal weighted average interest rate of LIBOR plus 3.0%.  Endesa Chile has also made structured loans to its subsidiaries in Chile, primarily to finance projects and refinance existing indebtedness. As of December 31, 2009, the outstanding net balance for such loans was $ 257 million. The largest amount outstanding during 2009 and 2008 was $ 313 million and $ 521 million respectively.  Endesa Chile has only one outstanding loan granted to a foreign subsidiary, Endesa Costanera.  The outstanding net balance of this loan was $ 7.1 million as of December 31, 2009.  The largest net amount outstanding during 2009 and 2008 for such loan was $ 7.1 million.  The interest rates on these intercompany loans to Endesa-Chiles Chilean subsidiaries range from LIBOR plus 0.75% to LIBOR plus 6.06%, with a weighted average interest rate of approximately LIBOR plus 4.2%.  The interest rate on the intercompany loan to Endesa-Chiles foreign subsidiaries was LIBOR plus 5.5% as of December 2009.  As of the date of this report, the above-mentioned transactions have not suffered material changes.  For more information regarding transactions with affiliates, refer to Note 7 of our Consolidated Financial Statements.  C.Interests of Experts and Counsel.  Not applicable.  Item 8.Financial Information  Consolidated Statements and Other Financial Information.  See Item 18.  Financial Statements for our Consolidated Financial Statements.  Legal Proceedings  We and our subsidiaries are parties to legal proceedings arising in the ordinary course of business.  Management considers that it is unlikely that any loss associated with pending lawsuits will significantly affect the normal development of our business.  For detailed information as of December 31, 2009 on the status of the material pending lawsuits that have been filed against the Company or its subsidiaries, please refer to Note 22.2 of our Consolidated Financial Statements.  In 2009, the Company adopted IFRS, and in relation to the legal proceedings reported in the Notes to the Consolidated Financial Statements the Company decided to use the criteria of disclosing lawsuits above a minimum threshold of $ 20 million of impact to Enersis, and, in some cases, qualitative criteria according to the impact materiality in the conduct of our business.  The lawsuits status includes a general description, the process status and the estimate of the amount involved in each lawsuit.  Dividend Policy  The Board generally establishes a definitive dividend payable each year, and attributable to the prior year, which cannot be less than the legal minimum of 30% of annual net income before negative goodwill amortization.  As agreed at a meeting held on February 26, 2010, the Board of Directors declared at the OSM held on April 22, 2010, the payment of a definitive dividend of Ch$ 7.1 per share for fiscal year 2009, equivalent to a payout ratio of 35.11% (based on annual net income).  The provisional dividend of Ch $2.45677 per share paid on December 2009 was deducted from the definitive dividend paid on May 6, 2010, as agreed by the OSM.   107


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The Board of Directors also approved a dividend policy for fiscal year 2010 according to which a provisional dividend will be paid to stockholders equal to 15% of the net income accumulated through September 30, 2010 and will propose a definitive dividend payout equal to 60% of the annual net income for fiscal year 2010.  Actual dividend payments will be subject to net profits obtained in each period, as well as to expectations of future profit levels and other conditions that may exist at the time of such dividend declaration.  The fulfillment of the aforementioned dividend policy will depend on actual 2010 net income. The proposed dividend policy is subject to the Board of Director’s prerogative to change the amount and timing of the dividend under the circumstances at the time of the payment.  Currently, there are no restrictions on the ability of Enersis or any of its subsidiaries to pay dividends, other than the customary legal restriction of limiting the amount of dividends to net income and retained earnings and in the event of specific circumstances given the conditions of certain credit agreements, except for the following: Pangue may not pay dividends unless it complies with certain financial covenants relating to leverage and debt service coverage ratios; Costanera is prohibited from paying dividends while certain debt is outstanding; and dividend payments by El Chocón are limited by a credit agreement executed in 2006.  In general terms companies may not pay dividends in case of default on credit agreements. (See. “Item 5. Operating and Financial Review and Prospects — B. Liquidity and capital resources” for further detail on Enersis debt instruments).  Stockholders set dividend policies at each subsidiary and affiliate.  There are currently no material currency controls which prohibit Enersis from repatriating the dividend payments from its non-Chilean principal subsidiaries and affiliates.  The Company pays dividends to shareholders with a record date of five business days before the payment date.  Holders of ADSs on the applicable record dates will be entitled to participate in all future dividends.  Dividends  The table below sets forth, for each of the years indicated, the per share amounts of dividends distributed by the Company and the amount of dividends distributed per 50 common shares (one ADS represents 50 common shares) in dollars.  See “Item 10. Additional Information — D. Exchange Controls.”  Year
     
     Nominal
Ch$(1)
     
     $ per 
ADS (2)2005
     
     0.42
     
     0.032006
     
     2.11
     
     0.172007
     
     5.42
     
     0.432008
     
     4.95
     
     0.392009
     
     7.02
     
     0.69
 
 (1)Amounts shown are in historical pesos and reflect all the dividends paid in a given year, and not the dividends accrued on that year.  These dividends may have been accrued the prior year, or the same year in which they were paid.  These amounts do no reflect reduction for any applicable Chilean withholding tax. (2)The dollar per ADS amount has been calculated by applying the Observed Exchange Rate as of December 31 of each year, to the peso amount.  One ADS represents 50 common shares.  For a discussion of Chilean Withholding Taxes and access to the formal currency market in Chile in connection with the payment of dividends and sales of ADSs and the underlying Common Stock, see “Item 10.  Additional Information — E. Taxation” and “Item 10.  Additional Information — D. Exchange Controls.”  B.            Significant Changes.  None.  Item 9.   The Offer and Listing  A.            Offer and Listing Details.  Market Price and Volume Information  The shares of our common stock currently trade on the Chilean, United States and Spanish exchanges.  Transactions in Chile take place on three exchanges: the Santiago Stock Exchange, the Electronic Stock Exchange and the Valparaíso Stock Exchange.    108


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Shares of our common stock have traded in the United States on the New York Stock Exchange (NYSE) since October 19, 1993 in the form of ADSs under the ticker symbol “ENI.”  Each ADS represents 50 shares of common stock, with the ADSs in turn evidenced by American Depositary Receipts (ADRs).  The ADRs are outstanding under a Deposit Agreement dated as of October 18, 1993, among us, Citibank, N.A., as Depositary, and the holders from time to time of ADRs issued there under.  Only persons in whose names ADRs are registered on the books of the Depositary are treated by the Depositary as owners of ADRs.  As of December 31, 2009, there were 81,302,753 ADSs (equivalent to 4,065,137,650 common shares) outstanding of Enersis, representing 12.45% of the total number of outstanding shares.  It is not practicable for us to determine the proportion of ADSs beneficially owned by U.S. persons.  During 2009, volume traded on the Santiago Stock Exchange amounted to 5,811,026,229 shares.  The table below shows, for the periods indicated high and low closing prices in pesos for the Shares on the Santiago Stock Exchange and high and low closing prices of the ADSs in dollars as reported by the New York Stock Exchange.  Chilean Pesos Per share(1)
     
     U.S.$ per ADS(2)High
     
     Low
     
     High
     
     Low2010May
     
     211.25
     
     195.00
     
     20 1/9
     
     17 7/9April
     
     217.50
     
     206.50
     
     21
     
     19 1/3March
     
     227.90
     
     207.99
     
     21 4/5
     
     19 1/3February
     
     245.00
     
     221.51
     
     23 1/4
     
     20 2/3January
     
     243.00
     
     225.00
     
     23 7/8
     
     22 1/42009
     
     231.50
     
     162.50
     
     23
     
     12 3/4December
     
     231.50
     
     187.65
     
     23
     
     18 2/34thquarter
     
     231.50
     
     181.00
     
     23
     
     17 1/53rdquarter
     
     208.50
     
     189.50
     
     19 3/5
     
     172ndquarter
     
     199.00
     
     169.00
     
     18 1/2
     
     14 1/31stquarter
     
     188.71
     
     162.50
     
     16 1/6
     
     12 3/42008
     
     194.80
     
     110.00
     
     20 1/4
     
     10 1/84thquarter
     
     194.80
     
     129.00
     
     17
     
     10 1/83rdquarter
     
     190.00
     
     149.90
     
     18 1/2
     
     14 6/72ndquarter
     
     189.00
     
     156.50
     
     20 1/4
     
     15 5/91stquarter
     
     161.89
     
     110.00
     
     17 7/8
     
     11 5/62007
     
     215.00
     
     157.00
     
     20 1/2
     
     14 1/32006
     
     173.00
     
     108.50
     
     16 2/5
     
     10 1/72005
     
     130.00
     
     87.00
     
     12 1/3
     
     7 1/3
 
 (1)As reported by the Santiago Stock Exchange.  Pesos per share reflect the nominal price as of the trade date. (2)As reported by the NYSE.  One ADS = 50 shares of common stock.  B.            Plan of Distribution.  Not applicable.   C.            Markets.  109


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In Chile, the Company’s stock is traded on three stock exchanges.  The largest exchange in the country, the Santiago Stock Exchange, was established in 1893 as a private company.  Its equity consists of 48 shares held by 45 stockholders as of the date of this report.  As of December 31, 2009, 232 companies had shares listed on the Santiago Stock Exchange.  Forthe year ended 2009, the Santiago Stock Exchange accounted for 89.0% of Enersis’ total equity traded in Chile. In addition, approximately 10.7% of Enersis’ equity trading was conducted on the Electronic Exchange, an electronic trading market that was created by banks and non-member brokerage houses, and 0.3% was traded on the Valparaíso Exchange. Equities, closed-end funds, fixed-income securities, short-term and money market securities, gold and dollars are traded on the Santiago Stock Exchange. In 1990, the Santiago Stock Exchange initiated a futures market with two instruments, dollar futures and Selective Shares Price Index, or IPSA, futures. Securities are traded primarily through an open-voice auction system, a firm offer system and the daily auction. Trading through the open voice system occurs on each business day from 9:30 a.m. to 4:30 p.m., from April through October, and from 9:30 a.m. to 5:30 p.m. from November through March, Santiago time, which differs from New York City time by up to two hours, depending on the season. The Santiago Stock Exchange has an electronic trading system called Telepregón, which operates continuously from 9:30 a.m. to 4:30 p.m. on each business day. For days on which auctions are scheduled, there are three time spots available for such auctions: 9:15 a.m., 12:30 p.m. and 4:30 p.m.  There are two share price indices on the Santiago Stock Exchange, the General Index, or IGPA, and the Selective Index, or IPSA.  The IPSA is calculated using the prices of the 40 most actively traded shares.  The IGPA is calculated using the prices of shares that are traded at least 5% of the trading days of a year and with total annual transactions exceeding UF 10,000.  The shares included in the IPSA are weighted according to the value of the shares traded.  As of December 31, 2009, Enersis and Endesa Chile were included in the IPSA.  Enersis has been included in the IPSA since the last quarter of 1988, while Endesa Chile has been included since its privatization in the 1980’s.  Shares of Enersis were first listed and began trading on theBolsa de Valores Latinoamericanos de la Bolsa de Madrid, or Latibex, as of December 17, 2001.  One trading unit is the equivalent of 50 common shares (the same unit conversion of 50:1 as an ADS) and the trading ticker symbol is “XENI.”Santander Investment S.A.acts as the liaison entity, and theBanco Santander-Chileas the depositary in Chile.  Trading of our shares in the Latibex amounted to approximately 0.6 million units in 2009, which in turn was equivalent to € 6.9 million.  The stock closed at € 16.13 on the last day of trading in Latibex in 2009.  For further information see “ — A. Offer and Listing Details — Market Price and Volume Information” above.  D.            Selling Shareholders.  Not applicable.  E.            Dilution.  Not applicable.  F.            Expense of the Issue.  Not applicable.  Item 10.     Additional Information  A.            Share Capital.  Not applicable.  B.            Memorandum and Articles of Association.  Description of Share Capital  Set forth below is certain information concerning our share capital and a brief summary of certain significant provisions of our bylaws and Chilean law.  General  Shareholders’ rights in Chilean companies are governed by the company’s bylaws (estatutos), which serve the same purpose as the articles or certificate of incorporation and the bylaws of a company incorporated in the United States; and by the Law 18046 (the Chilean Companies Act).  In addition, D.L. 3500, or Pension Funds’ System Law, which permits the investment by Chilean pension funds in stock of qualified companies, indirectly affects corporate governance and prescribes certain rights of shareholders.  In accordance with the Chilean Companies Act, legal actions by shareholders to enforce their rights as shareholders of the Company must be brought in Chile in arbitration proceedings or, at the option of the plaintiff, before the courts of Chile.  Members of the Board of Directors, managers, officers and principal executives of the Company, or shareholders that individually own shares with book value or stock value higher that UF 5,000 (or approximately $ 200,000), do not have the option to bring the procedure to the courts.    110


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The Chilean securities markets are principally regulated by the Superintendency of Securities and Insurance, or SVS, under the Law 18045 (the Securities Market Law) and the Chilean Companies Act.  These two laws provide for disclosure requirements, restrictions on insider trading and price manipulation, and protection of minority shareholders.  The Securities Market Law sets forth requirements for public offerings, stock exchanges and brokers, and outlines disclosure requirements for companies that issue publicly offered securities.  The Chilean Companies Act, as amended, and the Securities Market Law, as amended, provide rules regarding takeovers, tender offers, transactions with related parties, qualified majorities, share repurchase, directors’ committee, independent directors, stock options and derivative actions.  Register  Enersis is a publicly held stock corporation(sociedad anónima abierta)incorporated under the laws of Chile.  Enersis was constituted by public deed issued on June 19, 1981 by the Santiago Notary Public of Santiago Mr. Patricio Zaldívar Mackenna.  Its existence was approved by SVS Resolution 409-S of July 17, 1981 and it was registered on July 21, 1981 in the Commercial Registrar (Registro de Comercio del Conservador de Bienes Raíces y Comercio de Santiago), on pages 13099 No. 7269.  Enersis is registered with the SVS and its entry number is 0175. Enersis is also registered with the United States Securities and Exchange Commission.  Reporting Requirements Regarding Acquisition or Sale of Shares  Under Article 12 of the Securities Market Law andNorma de Carácter GeneralN° 269 of the SVS, certain information regarding transactions in shares of a publicly held stock corporation or in contracts or securities whose price or results dependon or areconditioned in whole or in part onthe price of such shares must be reported to the SVS and the Chilean stock exchanges.  Since ADSs are deemed to represent the shares of common stock underlying the ADRs, transactions in ADRs will be subject to these reporting requirements and those established in Circular 1375 of the SVS.  Shareholders of publicly held stock corporations are required to report to the SVS and the Chilean stock exchanges:  ·
     any direct or indirect acquisition or sale of shares made by a holder that owns directly or indirectly 10% or more of a publicly held stock corporation’s subscribed capital;·
     any direct or indirect acquisition or sale of contracts or securities whose price or results depend on or are conditioned in whole or in part on the price of shares, made by a holder that owns directly or indirectly 10% or more of a publicly held stock corporation’s subscribed capital;·
     any direct or indirect acquisition or sale of shares made by a holder that, due to an acquisition of shares of such publicly held stock company, results in the holder acquiring directly or indirectly 10% or more of a publicly held stock company’s subscribed capital; and·
     any direct or indirect acquisition or sale of shares in any amount, made by a director, receiver, principal executive, general manager or manager of a publicly held stock company.
  In addition, majority shareholders of a publicly held stock corporation must inform the SVS and the Chilean stock exchanges if such transactions are entered into with the intention of acquiring control of the Company or if they are making a financial investment.  Under Article 54 of the Securities Market Law andNorma de Carácter General104 enacted by the SVS, any person who directly or indirectly intends to take control of a publicly held stock corporation must disclose this intent to the market at least ten business days in advance of the proposed change of control and, in any event, as soon as the negotiations for the change of control have been formalized or reserved information of the publicly held stock corporation has been provided.  Corporate Objectives and Purposes  Article 4 of our bylaws states that our corporate objectives and purposes are, among other things, to conduct the exploration, development, operation, generation, distribution, transmission, transformation, or sale of energy in any form, directly or through other companies, as well as to provide engineering-consultancy services related to these objectives, in Chile and abroad and to participate in the telecommunications business.   111


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Board of Directors  Our Board of Directors is comprised of seven members who are appointed by shareholders at the Ordinary Shareholders’ Meeting of the Company and are elected for a period of three years at the end of which they will be re-elected or replaced.  The seven directors elected at the OSM are the seven individual nominees who receive the majority of the votes.  Each shareholder may vote his shares in favor of one nominee or may apportion his shares among any number of nominees.  The effect of these voting provisions is to ensure that a shareholder owning more than 12.5% of our shares is able to elect a member of the Board.  The compensation of the directors is set annually at the Ordinary Shareholders’ Meeting.  See “Item 6. Directors, Senior Management and Employees — B. Compensation.”  Agreements entered into by Enersis with related parties can only be executed when such agreements serve the interest of the Company, their price, terms and conditions are consistent with usually prevailing market conditions at the time of their approval and comply with all the requirements and procedures indicated in article 147 of the Chilean Companies Act.  Certain Powers of the Board of Directors  Our bylaws provide that every arrangement or contract that the Company enters into with its controlling shareholder, its directors or Executives, or with their related parties, must be previously approved by two thirds of the Board of Directors and be included in the Board Meetings and must comply with the provisions of the Chilean Companies Act.  Our bylaws do not contain provisions relating to:  ·the directors’ power, in the absence of an independent quorum, to vote on compensation for themselves or any members of their body;  ·borrowing powers exercisable by the directors and how such borrowing powers can be varied;  ·retirement or non-retirement of directors under an age limit requirement; or  ·number of shares, if any, required for directors’ qualification.  Certain Provisions Regarding Shareholder Rights  As of the date of the filing of this report, Enersis’ capital is comprised of only one class of shares, all of which are ordinary shares and have the same rights.  Our bylaws do not contain any provisions relating to:  ·redemption provisions;  ·sinking funds; or  ·liability for capital calls by the Company.  Under Chilean law, the rights of holders of stock of the Company may only be changed by an amendment to the bylaws that complies with the requirements explained below under “— Shareholders’ Meetings and Voting Rights.”  Capitalization  Under Chilean law, only the shareholders of a company, acting at an ESM, have the power to authorize a capital increase.  When an investor subscribes for shares, these are officially issued and registered under his name, and the subscriber is treated as a shareholder for all purposes except receipt of dividends and for return of capital in the event that the shares have been subscribed but not paid for.  The subscriber becomes eligible to receive dividends only for the shares that he has actually paid for, or, if he has paid for only a portion of such shares, thepro rataportion of the dividends declared with respect to such shares unless the company’s bylaws provide otherwise.  If a subscriber does not fully pay for shares for which he has subscribed on or prior to the date agreed upon for payment, the company is entitled to auction the shares on the stock exchange where such shares are traded and has a cause of action against the subscriber for the difference between the subscription price and the price actually received at auction, if any.  However, until such shares are sold at auction, the subscriber continues to possess all the rights of a shareholder, except the right to receive dividends and return of capital.  Authorized and issued shares for which full payment has not been made within the period fixed by shareholders at the ESM at which their subscription was authorized (which in no case may exceed three years from the date of such meeting), the Board must proceed to collect payment, unless the shareholders’ meeting had authorized by two thirds of the voting shares to reduce the company’s capital to the amount effectively collected.    112


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As of May 31, 2010, the subscribed and fully paid capital of the Company totaled Ch$ 2,825 billion and consisted of 32,651,166,465 shares.  Preemptive Rights and Increases of Share Capital  The Chilean Companies Act requires Chilean companies to grant shareholders preemptive rights to purchase a sufficient number of shares to maintain their existing ownership percentage of such company whenever such company issues new shares.  Under Chilean law, preemptive rights are exercisable or freely transferable by shareholders during a 30-day period following the day the capital increase is made public.  During such 30-day period, and for an additional 30-day period immediately following the initial 30-day period, publicly held stock corporations are not permitted to offer any unsubscribed shares to third parties on terms which are more favorable than those offered to their shareholders.  At the end of the additional 30-day period, a Chilean publicly held stock corporation is authorized to sell non-subscribed shares to third parties on any terms, provided they are sold on one of the Chilean stock exchanges.  Shareholders’ Meetings and Voting Rights  An OSM must be held within the first four months following the end of our fiscal year.  The last OSM was held on April 22, 2010.  An ESM may be called by the Board of Directors when deemed appropriate or when requested by shareholders representing at least 10% of the issued shares with voting rights or by the SVS.  To convene an OSM, or an ESM, notice must be given three times in a newspaper located in our corporate domicile.  The newspaper designated by our shareholders isEl Mercurio de Santiago.  The first notice must be published not less than 15 days and no more than 20 days in advance of the scheduled meeting.  Notice must also be mailed to each shareholder, to the SVS and to the Chilean stock exchanges.  Under Chilean law, a quorum for a shareholders’ meeting is established by the presence, in person or by proxy, of shareholders representing at least a majority of the issued shares with voting rights of a company.  If a quorum is not present at the first meeting, a reconvened meeting can take place at which the shareholders present are deemed to constitute a quorum regardless of the percentage of the shares represented.  The second meeting must take place within 45 days following the scheduled date for the first meeting.  Shareholders’ meetings adopt resolutions by the affirmative vote of a majority of those shares present or represented at the meeting.  An ESM must be called to take the following actions:  ·
     a transformation of the company into a form other than a publicly held stock corporation under the Chilean Companies Act, a merger or split-up of the company;·
     an amendment to the term of duration or early dissolution of the company;·
     a change in the corporation’s domicile;·
     a decrease of corporate capital;·
     an approval of capital contributions in kind and non-monetary assessments;·
     a modification of the authority reserved to shareholders or limitations on the board of directors;·
     a reduction in the number of members of the board of directors;·
     a disposition of 50% or more of the assets of the corporation, whether it includes disposition of liabilities or not, as well as the approval or the amendment of the business plan which contemplates the disposition of assets in an amount greater that such percentage; the disposition of 50% or more of the assets of a subsidiary, as long as such subsidiary represents at least 20% of the assets of the corporation, as well as any disposition of its shares that results in the parent company loosing its condition of controller;·
     the form of distributing corporate benefits;·
     issue of guarantees for third-party liabilities which exceed 50% of the assets, except when the third party is a subsidiary of the company, in which case approval of the board of directors is sufficient;·
     the purchase of the corporation’s own shares;·
     others established by the bylaws or the laws;·
     certain remedies for the nullification of the corporate bylaws;·
     inclusion in the bylaws of the right to purchase shares to minority shareholders, when the controlling shareholders reaches 95% of the company’s shares by means of a tender offer for all of the company’s shares, where at least 15% of the shares have been acquired from unrelated shareholders;·
     approval or ratification of acts or contracts with related parties.
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Regardless of the quorum present, the vote required for any of the actions above is at least two-thirds of the outstanding shares with voting rights.  Bylaw amendments for the creation of a new class of shares, or an amendment to or an elimination of those classes of shares that already exist, must be approved by at least two-thirds of the outstanding shares of the affected series.  Chilean law does not require a publicly held stock corporation to provide its shareholders the same level and type of information required by the securities laws regarding the solicitation of proxies.  However, shareholders are entitled to examine the books of a publicly held stock corporation within the 15-day period before its scheduled OSM.  Under Chilean law, a notice of a shareholders meeting listing matters to be addressed at the meeting must be mailed at least 15 days prior to the date of such meeting, and, with indication of the way by which complete copies of the documents that support the options submitted for voting can be obtained, which must also be made available to shareholders on the Company’s website. In the case of an OSM, the annual report of the Company’s activities which includes audited financial statements, must also be made available to shareholders and published on the Company’s website at: www.enersis.cl.  The Chilean Companies Act provides that, upon the request by the Directors’ Committee or by shareholders representing 10% or more of the issued shares with voting rights, a Chilean company’s annual report must include, in addition to the materials provided by the board of directors to shareholders, such shareholders’ comments and proposals in relation to the company’s affairs.  Similarly, the Chilean Companies Act provides that whenever the board of directors of a publicly held stock corporation convenes an OSM and solicits proxies for the meeting, or circulates information supporting its decisions or other similar material, it is obligated to include the pertinent comments and proposals that may have been made by the Directors’ Committee or by shareholders owning 10% or more of the shares with voting rights who request that such comments and proposals be so included.  Only shareholders registered as such with Enersis at least five business days prior to the date of a meeting are entitled to attend and vote their shares.  A shareholder may appoint another individual, who does not need to be a shareholder, as his proxy to attend the meeting and vote on his behalf.  Proxies for such representation shall be given in writing for all the shares held by the owner.  Every shareholder entitled to attend and vote at a shareholders’ meeting shall have one vote for every share subscribed.  There are no limitations imposed by Chilean law or the company’s bylaws on the right of nonresidents or foreigners to hold or vote shares of common stock.  However, the registered holder of the shares of common stock represented by ADSs, and evidenced by outstanding ADRs, is the custodian of the Depositary, currently Citibank N.A. (Chile), or any successor thereto.  Accordingly, holders of ADRs are not entitled to receive notice of meetings of shareholders directly or to vote the underlying shares of common stock represented by ADSs and evidenced by the ADRs directly.  The Deposit Agreement contains provisions pursuant to which the Depositary has agreed to solicit instructions from registered holders of ADRs as to the exercise of the voting rights pertaining to the shares of common stock represented by the ADSs and evidenced by such ADRs.  Subject to compliance with the requirements of the Deposit Agreement and receipt of such instructions, the Depositary has agreed to endeavor, insofar as practicable and permitted under Chilean law and the provisions of the bylaws, to vote or cause to be voted (or grant a discretionary proxy to the Chairman of the Board of Directors of the company or to a person designated by the Chairman of the Board of Directors of the company to vote) the shares of common stock represented by the ADSs evidenced by such ADRs in accordance with any such instruction.  The Depositary shall not itself exercise any voting discretion over any shares of common stock underlying ADSs.  If no voting instructions are received by the Depositary from a holder of ADRs with respect to the shares of common stock represented by the ADSs, and evidenced by such ADRs, on or before the date established by the Depositary for such purpose, the shares of common stock represented by the ADSs, subject to limitations set forth in the Deposit Agreement, may be voted in the manner directed by the Chairman of the Board of the company.   114


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Dividends and Liquidation Rights  According to the Chilean Companies Act, unless otherwise decided by unanimous vote of its issued shares eligible to vote, all companies must distribute a cash dividend in an amount equal to at least 30% of its consolidated net income, before amortization and negative goodwill for each year (calculated according to the local accounting rules applicable to the company when preparing financial statements to be submitted to the SVS), unless and except to the extent the company has carried forward losses.  The law provides that the Board of Directors must propose the dividend policy to the shareholders at the OSM.  Any dividend in excess of 30% of net income may be paid, at the election of the shareholder, in cash, in Enersis’ shares or in shares of publicly held corporations held by Enersis.  Shareholders who do not expressly elect to receive a dividend other than in cash are legally presumed to have decided to receive the dividend in cash.  Dividends which are declared but not paid within the appropriate time period set forth in the Chilean Companies Act (as to minimum dividends, 30 days after declaration; as to additional dividends, the date set for payment at the time of declaration) are adjusted to reflect the change in the value of UF, from the date set for payment to the date such dividends are actually paid.  Such dividends also accrue interest at the then-prevailing rate for UF-denominated deposits during such period.  The right to receive a dividend lapses if it is not claimed within five years from the date such dividend is payable; payments not collected in such period are transferred for the benefit of the fire department, formed by volunteers.  In the event of a liquidation of Enersis, the holders of shares would participate in the assets available in proportion to the number of paid-in shares held by them, after payment to all creditors.  Approval of Financial Statements  The Board of Directors is required to submit Enersis’ financial statements to the shareholders annually for their approval.  If the shareholders by a vote of a majority of shares present (in person or by proxy) at the shareholders’ meeting reject the financial statements, the Board of Directors must submit new financial statements no later than 60 days from the date of such meeting.  If the shareholders reject the new financial statements, the entire Board of Directors is deemed removed from office and a new board is elected at the same meeting.  Directors who individually approved such financial statements are disqualified for reelection for the following period.  Our shareholders have never rejected the financial statements presented by the Board of Directors.  Change of Control  The Capital Markets Law establishes a comprehensive regulation related to tender offers.  The law defines a tender offer as the offer to purchase shares of companies which publicly offer their shares or securities convertibles into shares and which offer is made to shareholders to purchase their shares under conditions which allow the bidder to reach a certain percentage of ownership of the company within a fixed period of time.  These provisions apply to both voluntary and hostile tender offers.  Acquisition of Shares  There are no provisions in our bylaws that discriminate against any existing or prospective holder of shares as a result of such shareholder owning a substantial number of shares.  However, no person may directly or indirectly own more than 65% of the outstanding shares of our stock.  The foregoing restriction does not apply to the depositary as record owner of shares represented by ADRs, but it does apply to each beneficial ADS holder.  Additionally, our bylaws prohibit any shareholder from exercising voting power with respect to more than 65% of the common stock owned by such shareholder or on behalf of others representing more than 65% of the outstanding issued shares with voting rights.  115


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Right of Dissenting Shareholders to Tender Their Shares  The Chilean Companies Act provides that upon the adoption of any of the resolutions enumerated below at a meeting of shareholders, dissenting shareholders acquire the right to withdraw from the company and to compel the company to repurchase their shares, subject to the fulfillment of certain terms and conditions.  In order to exercise such rights, holders of ADRs must first withdraw the shares represented by their ADRs pursuant to the terms of the deposit agreement.  “Dissenting” shareholders are defined as those who at a shareholders’ meeting vote against a resolution that results in the withdrawal right, or who if absent from such meeting, state in writing their opposition to the respective resolution, within the 30 days following the shareholders’ meeting.  The price paid to a dissenting shareholder of a publicly held stock corporation whose shares are quoted and actively traded on one of the Chilean stock exchanges, is the greater of (i) the weighted average of the sales prices for the shares as reported on the Chilean stock exchanges on which the shares are quoted for the two-month period preceding the shareholders’ meeting giving rise to the withdrawal right, and (ii) the market price resulting from the average price of transactions on such day.  If, because of the volume, frequency, number and diversity of the buyers and sellers, the SVS determines that the shares are not actively traded on a stock exchange, the price paid to the dissenting shareholder shall be the book value.  Book value for this purpose shall equal paid capital plus reserves and profits, less losses, divided by the total number of subscribed shares, whether entirely or partially paid.  For the purpose of making this calculation, the last consolidated statements of financial position is used, as adjusted to reflect inflation up to the date of the shareholders’ meeting which gave rise to the withdrawal right.  The resolutions that result in a shareholder’s right to withdraw include, among others, the following:  ·
     the transformation of the company into an entity which is not a publicly held stock corporation governed by Chilean Companies Act;·
     the merger of the company with another company;·
     disposition of 50% or more of the assets of the corporation, whether it includes disposition of liabilities or not, as well as the approval or the amendment of the business plan which contemplates the disposition of assets in an amount greater that such percentage; the disposition of 50% or more of the assets of a subsidiary, as long as such subsidiary represents at least 20% of the assets of the corporation, as well as any disposition of its shares that results in the parent company loosing its condition of controller;·
     issue of guarantees for third parties’ liabilities which exceed 50% of the assets (if the third party is a subsidiary of the company, the approval of the board of directors is sufficient);·
     the creation of preferential rights for a class of shares or an amendment to the existing ones.  In this case the right to withdraw only accrues to the dissenting shareholders of the class or classes of shares adversely affected;·
     certain remedies for the nullification of the corporate bylaws; and·
     such other causes as may be established by the law or by the company’s bylaws.
  Investments by AFPs  The Pension Funds’ System Law permits AFPs to invest their funds in companies that are subject to Title XII and, subject to greater restrictions, in other companies.  The determination of which stocks may be purchased by AFPs is made by the Risk Classification Committee.  The Risk Classification Committee establishes investment guidelines and is empowered to approve or disapprove those companies that are eligible for AFP investments.  Except for the period from March 2003 to March 2004, Enersis has been a Title XII Company since 1985 and is approved by the Risk Classification Committee.   116


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Title XII companies are required to have bylaws that limit the ownership of any shareholder to a specified maximum percentage, and that require that certain actions be taken only at a meeting of the shareholders and give the shareholders the right to approve certain investment and financing policies.  Registrations and Transfers  Shares issued by Enersis are registered with an administrative agent namedDepósito Central de Valores S.A.,Depósitode Valores.  This entity is responsible for Enersis shareholders registry as well.  In case of jointly owned shares, an attorney-in-fact must be appointed to represent the joint owners in dealing with Enersis.  C.            Material contracts.  None.  D.            Exchange Controls.  The Central Bank is responsible for, among other things, monetary policies and exchange controls in Chile.  Currently applicable foreign exchange regulations are set forth in the Compendium of Foreign Exchange Regulations (the Compendium) approved by the Chilean Central Bank in 2002.  Appropriate registration of a foreign investment in Chile permits the investor access to the Formal Exchange Market.  Foreign investments can be registered with the Foreign Investment Committee under D.L. 600 of 1974 or can be registered with the Central Bank under the Central Bank Act, Law 18840 of October 1989.  a)            Foreign Investments Contracts and Chapter XXVI  Regarding our initial public offering of ADSs in 1993, we entered into a foreign investment contract (the Foreign Investment Contract) with the Chilean Central Bank and the Depositary, pursuant to Article 47 of the Central Bank Act and Chapter XXVI of the former Compendium of Foreign Exchange Regulations (Chapter XXVI), which governed the issuance of ADSs by a Chilean company. Pursuant to the Foreign Investment Contract, the foreign exchange for payments and distributions with respect to the ADSs may be purchased in either the Formal Exchange Market or the Informal Exchange Market, but such payments must be necessarily remitted through the Formal Exchange Market.  As of April 19, 2001, Chapter XXVI was eliminated and new investments in ADRs by non-residents of Chile, are now governed by Chapter XIV of the Compendium.  This change was made with the purpose of simplifying and facilitating the flow of capital to and from Chile.  As a result of the elimination of Chapter XXVI, access to the Formal Exchange Market is no longer assured.  However, because our Foreign Investment Contract was entered into pursuant to Chapter XXVI, the principles of Chapter XXVI still apply to its terms.  Foreign investors who have purchased their shares under a Foreign Investment Contract pursuant to Chapter XXVI continue to have access to the Formal Exchange Market for the purpose of converting pesos to dollars and repatriating from Chile amounts received with respect to the deposited shares of common stock or shares of common stock withdrawn from deposit on surrender of ADRs (including amounts received as cash dividends and proceeds from the sale in Chile of the underlying shares of common stock and any rights with respect thereto).  However, foreign investors who have not deposited the shares of common stock into our ADS facility will not have the benefits of our Foreign Investment Contract with the Central Bank but instead will be subject to the normal foreign investment rules.  The following is a summary of certain provisions which were contained in Chapter XXVI and the Foreign Investment Contract, and which therefore remain relevant.  This summary does not purport to be complete and is qualified in its entirety by reference to Chapter XXVI and the Foreign Investment Contract.  Under Chapter XXVI and the Foreign Investment Contract, the Central Bank agreed to grant to the Depositary, on behalf of ADR holders, and to any investor not residing or domiciled in Chile who withdraws common stock upon delivery of ADRs (such shares of common stock being referred to herein as Withdrawn Shares) access to the Formal Exchange Market to convert pesos into dollars (and to remit such dollars outside of Chile), including amounts received as:   117


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·
     cash dividends;·
     proceeds from the sale in Chile of Withdrawn Shares subject to receipt by the Central Bank of a certificate from the holder of the Withdrawn Shares (or from an institution authorized by the Central Bank) that such holder’s residence and domicile are outside Chile and a certificate from a Chilean stock exchange (or from a brokerage or securities firm established in Chile) that such Withdrawn Shares were sold on a Chilean stock exchange;·
     proceeds from the sale in Chile of rights to subscribe for additional shares of Common Stock;·
     proceeds from the liquidation, merger or consolidation of our Company; and·
     other distributions, including, without limitation, those resulting from any recapitalization, as a result of holding shares of Common Stock represented by ADSs or Withdrawn Shares.
  Transferees of Withdrawn Shares were not entitled to any of the foregoing rights under Chapter XXVI. Investors receiving Withdrawn Shares in exchange for ADRs had the right to redeposit such shares in exchange for ADRs, provided that certain conditions relating to redeposit were satisfied.  Chapter XXVI provided that access to the Formal Exchange Market in connection with dividend payments was conditioned upon certification by us to the Central Bank that a dividend payment has been made and any applicable tax has been withheld.  Chapter XXVI also provided that the access to the Formal Exchange Market in connection with the sale of Withdrawn Shares or distributions thereon was conditioned upon receipt by the Central Bank of certification by the Depositary (or the Custodian on its behalf) that such shares have been withdrawn in exchange for ADRs and receipt of a waiver of the benefit of the Foreign Investment Contract with respect thereto until such Withdrawn Shares were redeposited.  The Foreign Investment Contract provides that a person who brings foreign currency into Chile to purchase shares of common stock with the benefit of the Foreign Investment Contract must convert it into pesos on the same day and has five banking business days within which to invest in shares of common stock in order to receive the benefits of the Foreign Investment Contract.  If such person decides within such period not to acquire shares of common stock, such person can access the Formal Exchange Market to reacquire dollars provided that the applicable request is presented to the Central Bank within seven banking business days of the initial conversion into pesos.  Shares acquired as described above may be deposited for ADRs and receive the benefits of the Foreign Investment Contract, subject to receipt by the Central Bank of a certificate from the Depositary (or the Custodian on its behalf) that such deposit has been effected and that the related ADRs have been issued and receipt of a declaration from the person making such deposit waiving the benefits of the Foreign Investment Contract with respect to the deposited shares of common stock.  Access to the Formal Exchange Market under any of the circumstances described above is not automatic.  Such access requires approval of the Central Bank based on a request presented through a banking institution established in Chile.  The Foreign Investment Contract provides that if the Central Bank has not acted on such request within seven banking days, the request will be deemed approved.  Under current Chilean law, the Foreign Investment Contract cannot be changed unilaterally by the Central Bank.  It is not certain, however, that additional Chilean restrictions applicable to the holders of ADRs, the disposition of underlying shares of Common Stock or the repatriation of the proceeds from such disposition could not be imposed in the future, nor can there be any assessment of the duration or impact of such restrictions if imposed.  The Compendium and International Bond Issuances Chilean issuers may offer bonds issued by the Central Bank internationally under Chapter XIV, as amended, of the Compendium.  E.            Taxation.  Chilean Tax Considerations  The following discussion summarizes material Chilean income and withholding tax consequences to beneficial owners arising from the ownership and disposition of the shares and ADSs.  The summary which follows does not purport to be a comprehensive description of all of the tax considerations that may be relevant to a decision to purchase, own or dispose of shares or ADSs and does not purport to deal with the tax consequences applicable to all categories of investors, some of which may be subject to special rules.  Holders of shares and ADSs are advised to consult their own tax advisors concerning the Chilean and other tax consequences of the ownership of shares or ADSs.    118


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The summary that follows is based on Chilean law, as in effect on the date hereof, and is subject to any changes in these or other laws occurring after such date, possibly with retroactive effect.  Under Chilean law, provisions contained in statutes such as tax rates applicable to foreign investors, the computation of taxable income for Chilean purposes and the manner in which Chilean taxes are imposed and collected may be amended only by another law.  In addition, the Chilean tax authorities enact rulings and regulations of either general or specific application and interpret the provisions of Chilean tax law.  Chilean tax may not be assessed retroactively against taxpayers who act in good faith relying on such rulings, regulations and interpretations, but Chilean tax authorities may change their rulings, regulations and interpretations in the future.  The discussion that follows is also based, in part, on representations of the Depositary, and assumes that each obligation in the deposit agreement and any related agreements will be performed in accordance with its terms.  There is no income tax treaty in force between Chile and the United States.  As used in this report, the term foreign holder means either:  ·in the case of an individual, a person who is not a resident of Chile; for purposes of Chilean taxation, an individual holder is resident of Chile if he or she has resided in Chile for more than six months in one calendar year, or a total of more than six months in two consecutive fiscal years; or  ·in the case of a legal entity, an entity that is not organized under the laws of Chile, unless the shares or ADSs are assigned to a branch, agent, representative or permanent establishment of such entity in Chile.  Taxation of Shares and ADSs  Taxation of Cash Dividends and Property Distributions  General Rule:Cash dividends paid with respect to the shares or ADSs held by a foreign holder will be subject to a 35% Chilean withholding tax, which is withheld and paid by the company.  A credit against the Chilean withholding tax is available based on the level of corporate income tax actually paid by the company on the income to be distributed; however, this credit does not reduce the Chilean withholding tax on a one-for-one basis because it also increases the base on which the Chilean withholding tax is imposed.  In addition, if the company distributes less than all of its distributable income, the credit for the Chilean corporate income tax paid by the company is proportionately reduced.  As of January  1, 2004, the Chilean corporate tax rate is 17%.  The example below illustrates the effective Chilean withholding tax burden on a cash dividend received by a foreign holder, assuming a Chilean withholding tax rate of 35%, an effective Chilean corporate income tax rate of 17% and a distribution of 50% of the net income of the company distributable after payment of the Chilean corporate income tax:  Company taxable income
     
     100.0Chilean corporate income tax (17% of Ch$ 100)
     
     (17)Net distributable income
     
     83Dividend distributed (50% of net distributable income)
     
     41.5Withholding tax (35% of the sum of Ch$ 41.5 dividend plus Ch$ 8.5)
     
     (17.5)Credit for 50% of Chilean corporate income tax
     
     8.5Net withholding tax
     
     (9)Net dividend received
     
     32.5Effective dividend withholding rate
     
     21.69%
  In general, the effective dividend Chilean withholding tax rate, after giving effect to the credit for the Chilean corporate income tax paid by the company, can be computed using the following formula:  Effective Dividend
     
     =
     (Withholding tax rate) - (Chilean corporate income tax rate)Withholding Tax Rate
     
     
     1 - (Chilean corporate income tax rate)
  Dividends are generally assumed to have been paid out of the Companys oldest retained profits for purposes of determining the level of Chilean corporate income tax that was paid by the Company.  For information as to the retained earnings of the Company for tax purposes and the tax credit available on the distribution of such retained earnings, see Note 17 to our Consolidated Financial Statements.    119


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Under Chilean income tax law, dividend distributions made in property are subject to the same Chilean tax rules as cash dividends.  Stock dividends are not subject to Chilean taxation.  Exceptions:Despite the general rule previously examined, there are special circumstances under which a different tax treatment would apply depending on the source of the income or due to special circumstances existing at the date of the dividend distribution.  The special cases of most common occurrence are briefly described below:  1)Circumstances where there is no credit against the Chilean withholding tax:  Dividends distributed by the company to foreign holders may not receive a credit against the Chilean withholding tax.  Such is the case, for instance, when dividend distributions exceed the companys taxable income or when the income was not subject to corporate income tax due to an exemption.  In these cases, the foreign holder will be subject to the Chilean withholding tax rate of 35%, without any credit whatsoever.  2)Circumstances where dividends have been imputed to income exempted of all Chilean income taxes: In these cases, dividends distributed by the company to the foreign holder will not be subject to Chilean withholding tax.  Income exempted of all Chilean income taxes is expressly listed in the Chilean Income Tax Law.  3)Circumstances where dividends are subject to a provisional withholding tax: In the event that on the date of the dividend distribution there are no earnings on which income tax has been paid and no tax-exempt earnings, a provisional withholding must be made on the dividends at the time of payment to the foreign holders.  This provisional withholding is calculated as if the dividends were paid from taxable income with corporate tax credit.  In other words, dividends will be subject to a 35% Chilean withholding tax rate, but they will provide a general corporate tax credit of 17%, which results in an effective dividend withholding rate of 21.69%.  The provisional withholding tax must be confirmed by December 31 of the year in which the dividend was paid.  This confirmation must be based on the companys effective income up to December 31.  As a result of such confirmation the following circumstances may arise:  a)That part or the total amount of the dividend corresponds to taxable income without tax credit, in which case the excess credit must to be refunded to the Chilean Treasury by April of the year following the dividend payment date.  The excess credit will be deducted from the next dividend to be paid to the foreign holder.  b)That part or the total amount of the dividend corresponds to tax-exempted earnings.  In such cases, a refund of the excess taxes paid must be requested from the Chilean treasury by April of the year following the dividend payment.  4)            Circumstances when it is possible to use in Chile credit against income taxes paid abroad or tax credit:  This occurs when dividends distributed by the Chilean company have as their source income generated by companies resident in third countries.  If that income was subject to withholding tax or corporate income tax in those third countries, such income will have a credit or tax credit against corresponding Chilean taxes, which can be proportionally transferred to the shareholders of the Chilean company.  Taxation on Sale or Exchange of ADSs  Gains obtained by a foreign holder from the sale or exchange of ADSs outside Chile will not be subject to Chilean taxation.  Taxation on sale or exchange of Shares where shares or ADSs were acquired on or before April 19, 2001  Gain recognized on a sale or exchange of shares (as distinguished from sales or exchanges of ADSs representing such common shares) will be subject to both a 17% Chilean income tax and the 35% Chilean withholding tax (the former being creditable against the latter) if (i) the foreign holder acquired and disposed of the shares in the ordinary course of its business or as a regular trader of shares, or (ii) the foreign holder and the purchaser of the shares are related parties within the meaning of Chilean tax law.  In all other cases, gain on the disposition of shares will be subject to a 17% Chilean income tax but will not be subject to the 35% Chilean withholding tax. The date of acquisition of the ADSs is considered to be the date of acquisition of the shares for which the ADSs are exchanged.   120


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Taxation on sale or exchange of Shares where shares or ADSs were acquired after April 19, 2001  The income tax law includes a tax exemption on capital gains arising from the sale of shares of listed companies traded in the stock markets.  Although there are certain restrictions, in general terms, the amendment provides that to access to the capital gain exemption: (i) the shares must be of a public stock company with a certain minimum level of trading on a stock exchange; (ii) the sale must be carried out in a Chilean stock exchange, or on another stock exchange authorized by the SVS, or in a tender offer subject to Chapter XXV of the Chilean Securities Market Law; (iii) the shares which are being sold must have been acquired on a stock exchange, or in a tender offer subject to Chapter XXV of the Chilean Securities Market Law, or in an initial public offering (due to the creation of a company or to a capital increase), or due to the exchange of convertible bonds; and (iv) the shares must have been acquired after April 19, 2001.  If the shares do not qualify for the exemption, capital gain on their sale or exchange, if any, will be taxed in accordance with the rules described in the preceding paragraph. In addition, if the exemption does not apply and the foreign holder has held the shares for less than one year, gains from the disposition of shares will be subject to both income and withholding tax as described in the preceding paragraph.  The date of acquisition of the ADSs is considered to be the date of acquisition of the shares for which the ADSs are exchanged.  Taxation of Rights and ADS Rights  For Chilean tax purposes, the receipt of rights or ADS rights by a foreign holder of shares or ADSs pursuant to a rights offering is a nontaxable event.  In addition, there are no Chilean income tax consequences to foreign holders upon the exercise or the lapse of the rights or the ADS rights.  Any gain on the sale, exchange or transfer of the rights by a foreign holder is subject to a 35% Chilean withholding tax.  Other Chilean Taxes  There is no gift, inheritance or succession taxes applicable to the ownership, transfer or disposition of ADSs by a foreign holder, but such taxes will generally apply to the transfer at death or by gift of the shares by a foreign holder.  There is no Chilean stamp, issue, registration or similar taxes or duties payable by holders of shares or ADSs.  Material U.S. Income Tax Considerations  This discussion is based on the Internal Revenue Code of 1986, as amended (the Code), administrative pronouncements, judicial decisions and final, temporary and proposed Treasury regulations, all as of the date hereof.  These authorities are subject to change, possibly with retroactive effect.  This discussion assumes that the Depositarys activities are clearly and appropriaterly defined so as to ensure that the tax treatment of ADSs will be identical to the tax treatment of the underlying shares.  As of this date, there is currently no applicable income tax treaty in effect between the United States and Chile. However, the United States and Chile have recently signed an income tax treaty that will enter into force once the treaty is ratified by both countries.  There can be no assurance that the treaty will be ratified by either country.  The following summary assumes that there is no applicable income tax treaty in effect between the United States and Chile.  The following are the material U.S. federal income tax consequences to beneficial owners described herein of owning and disposing of shares or ADSs, but it does not purport to be a comprehensive description of all of the tax considerations that may be relevant to a particular persons decision to hold such securities.  The discussion applies only if you hold shares or ADSs as capital assets for U.S. federal income tax purposes and it does not describe all of the tax consequences that may be relevant in light of your particular circumstances, such as if you are:  ·certain financial institutions;  ·insurance companies;  ·dealers and traders in securities who use a mark-to-market method of tax accounting;  ·persons holding shares or ADSs as part of a hedge, straddle, integrated transaction or similar transaction;  ·persons whose functional currency for U.S. federal income tax purposes is not the U.S. dollar;  ·partnerships or other entities classified as partnerships for U.S. federal income tax purposes;   121


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·persons liable for the alternative minimum tax;  ·tax-exempt organizations;  ·persons holding shares or ADSs that own or are deemed to own ten percent or more of our stock;  ·persons who acquired our shares or ADSs pursuant to the exercise of any employee stock option or otherwise as compensation; or  ·persons holding shares or ADSs in connection with a trade or business conducted outside of the United States.  If an entity classified as a partnership for U.S. federal income tax purposes holds shares or ADSs, the U.S. federal income tax treatment of a partner will generally depend on the status of the partner and upon the activities of the partnership.  Partnerships holding shares or ADSs and partners in such partnerships should consult their tax advisors as to the particular U.S. federal income tax consequences of holding and disposing of the shares or ADSs.  You are a U.S. Holder for purposes of this discussion if you are a beneficial owner of our shares or ADSs and if you are, for U.S. federal income tax purposes:  ·a citizen or individual resident of the United States; or,  ·a corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States or any political subdivision thereof; or,  ·an estate the income of which is subject to U.S. federal income taxation regardless of its source; or,  ·a trust (i) that validly elects to be treated as a U.S. person for U.S. federal income tax purposes or (ii)(A) if a court within the United States is able to exercise primary supervision over the administration of the trust and (B) one or more U.S. persons have the authority to control all substantial decisions of the trust.  You are a "Non-U.S. Holder" for purposes of this discussion if you are a beneficial owner of our shares or ADSs and are not a U.S. Holder.  In general, if you own ADSs, you will be treated as the owner of the shares represented by those ADSs for U.S. federal income tax purposes.  Accordingly, no gain or loss will be recognized if you exchange ADSs for the underlying shares represented by those ADSs.  The U.S. Treasury has expressed concerns that parties to whom ADS are released before shares are delivered to the Depositary (pre-release) or intermediaries in the chain of ownership between holders and the issuer of the security underlying the ADS may be taking actions that are inconsistent with the claiming of foreign tax credits for holders of depositary shares.  Such actions would also be inconsistent with the claiming of the reduced tax rate, described below, applicable to dividends received by certain non-corporate holders.  Accordingly, the analysis of the creditability of Chilean taxes, and the availability of the reduced tax rate for dividends received by certain non-corporate holders, each described below, could be affected by actions taken by such parties or intermediaries.  This discussion assumes that the Company is not, and will not become, a passive foreign investment company, as described below.  The summary of U.S. federal income tax consequences set out below is intended for general informational purposes only.  You should consult your tax advisors with respect to the particular tax consequences to you of owning or disposing of shares or ADSs, including the applicability and effect of state, local, non-U.S. and other tax laws and the possibility of changes in tax laws.  Taxation of Distributions  Distributions paid on shares or ADSs other than certain pro rata distributions of common shares will be treated as dividends taxable as ordinary income to the extent paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles).  Because we do not maintain calculations of our earnings and profits under U.S. federal income tax principles, it is expected that distributions generally will be reported as dividends.    122


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Subject to applicable limitations and the discussion above regarding concerns expressed by the U.S. Treasury, dividends paid by qualified foreign corporations to certain non-corporate U.S. Holders in taxable years beginning before January  1, 2011 are taxable at a maximum rate of 15%.  A foreign company is treated as a qualified foreign corporation with respect to dividends paid on stock that is readily tradable on an established securities market in the United States, such as the New York Stock Exchange where our ADSs are traded.  You should consult your tax advisors to determine whether the favorable rate will apply to dividends you receive and whether you are subject to any special rules that limit your ability to be taxed at this favorable rate.  The amount of a dividend will include the net amount withheld by us in respect of Chilean withholding taxes on the distribution.  The amount of the dividend will be treated as foreign-source dividend income to you and will not be eligible for the dividends-received deduction generally allowed to U.S. corporations under the Code.  Dividends will be included in your income on the date of your, or in the case of ADSs, the Depositarys, receipt of the dividend.  The amount of any dividend paid in Chilean pesos will be a U.S. dollar amount calculated by reference to the exchange rate for converting Chilean pesos into dollars in effect on the date of such receipt regardless of whether the payment is in fact converted into dollars.  If the dividend is converted into U.S. dollars on the date of receipt, you generally should not be required to recognize foreign currency gain or loss in respect of the dividend income.  You may have foreign currency gain or loss if the dividend is converted into dollars on a date after the date of receipt.  Subject to applicable limitations that may vary depending upon your circumstances and subject to the discussion above regarding concerns expressed by the U.S. Treasury, the net amount of Chilean withholding tax (after reduction for the credit for Chilean corporate income tax, as discussed above under Chilean Tax Considerations  Taxation of Shares and ADSs  Taxation of Cash Dividends and Property Distributions) withheld from dividends on shares or ADSs will be creditable against your U.S. federal income tax liability.  The rules governing foreign tax credits are complex and, therefore, you should consult your tax advisor regarding the availability of foreign tax credits in your particular circumstances.  Instead of claiming a credit, you may, at your election, deduct such Chilean taxes in computing your taxable income, subject to generally applicable limitations under U.S. law.  An election to deduct foreign taxes instead of claiming foreign tax credits must apply to all taxes paid or accrued in the taxable year to foreign countries and possessions of the United States.  Subject to the discussion below under Information Reporting and Backup Withholding, if you are aNon-U.S.  Holder, you generally will not be subject to U.S. federal income or withholding tax on dividends received by you on your shares or ADSs, unless you conduct a trade or business in the United States and such income is effectively connected with that trade or business.  Sale or Other Disposition of Shares or ADSs  For U.S. federal income tax purposes, the gain or loss you realize on the sale or other disposition of shares or ADSs will be a capital gain or loss, and will be a long-term capital gain or loss if you have held the shares or ADSs for more than one year.  The amount of your gain or loss will equal the difference between your tax base in the shares or ADSs disposed of and the amount realized on the disposition, in each case as determined in dollars.  Such gain or loss will generally be U.S.-source gain or loss for foreign tax credit purposes.  In addition, certain limitations exist on the deductibility of capital losses by both corporate and individual taxpayers. In certain circumstances, Chilean taxes may be imposed upon the sale of shares.  See Chilean Tax Considerations  Taxation of Shares and ADSs.  If a Chilean tax is imposed on the sale or disposition of shares, and a U.S. holder does not receive significant foreign source income from other sources, such U.S. holder may not be able to credit such Chilean tax against his U.S. federal income tax liability.  Subject to the discussion below under Information Reporting and Backup Withholding, a Non-U.S. Holder of ADSs or shares generally will not be subject to United States income or withholding tax on gain from the sale or other disposition of ADSs or shares unless (i) such gain is effectively connected with the conduct of a trade or business within the United States or (ii) the Non-U.S. Holder is an individual who is present in the United States for at least 183 days during the taxable year of the disposition and certain other conditions are met.   123


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Passive Foreign Investment Company Rules  We believe that we were not a passive foreign investment company (PFIC) for U.S. federal income tax purposes for our 2009 taxable year.  However, because PFIC status depends upon the composition of a companys income and assets and the market value of its assets from time to time, and because it is unclear whether certain types of our income constitute passive income for PFIC purposes, there can be no assurance that we will not be considered a PFIC for any taxable year.  If we were a PFIC for 2009 or for any prior or future taxable year during which you held shares or ADSs, certain adverse consequences could apply to you, including the imposition of higher amounts of tax than would otherwise apply, and additional filing requirements.  You should consult your tax advisors regarding the consequences to you if we were a PFIC, as well as the availability and advisability of making any election, which may mitigate the adverse consequences of PFIC status.  Information Reporting and Backup Withholding  Payments of dividends and sales proceeds that are made within the United States or through certain U.S.-related financial intermediaries generally are subject to information reporting and to backup withholding unless (i) you are a corporation or other exempt recipient or (ii) in the case of backup withholding, you provide a correct taxpayer identification number and certify that you are not subject to backup withholding.  U.S. information reporting and backup withholding may also apply to Non-U.S. Holders that are not "exempt recipients" and that fail to provide certain information as may be required by United States law and applicable regulations.  The amount of any backup withholding from a payment to you will be allowed as a credit against your U.S. federal income tax liability and may entitle you to a refund, provided that the required information is timely furnished to the Internal Revenue Service.  Recently enacted legislation requires certain U.S. Holders to report information with respect to their investment in shares or, it is assumed, ADSs not held through a custodial account with a U.S. financial institution to the Internal Revenue Service.  Investors who fail to report required information could become subject to substantial penalties.  F.            Dividends and Paying Agents.  Not applicable.  G.           Statement by Experts.  Not applicable.  H.           Documents on Display.  We are subject to the information requirements of the Exchange Act, except that as a foreign issuer, we are not subject to the proxy rules (other than general anti-fraud rules) or the short-swing profit disclosure rules of the Exchange Act.  In accordance with these statutory requirements, we file or furnish reports and other information with the SEC.  Reports and other information filed or furnished by us with the SEC may be inspected and copied at the public reference facilities maintained by the SEC at Room 1024, 100 F Street, N.E., Washington, D.C. 20549, and at the SECs regional offices at 233 Broadway, New York, New York 10279 and 475 West Jackson Boulevard, Suite 900, Chicago, Illinois 60604.  Copies of such material may also be inspected at the offices of the New York Stock Exchange, 11 Wall Street, New York, New York 10005, on which our ADSs are listed.  In addition, the SEC maintains a website that contains information filed electronically with the SEC, which can be accessed over the Internet at http://www.sec.gov.  I.             Subsidiary information.  Not applicable.  Item 11      Quantitative and Qualitative Disclosures about Market Risk  We are exposed to risks from changes in commodity prices, interest rates and foreign exchange rates, which we monitor.  Our Board of Directors approves risk management policies at all levels.   124


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Commodity Price Risk  In our electricity generation business, we are exposed to market risks arising from the price volatility for electricity, natural gas, diesel oil, and coal.  In order to manage these exposures, we enter into long-term contracts with suppliers and customers.  We are exposed to the volatility of natural gas prices in the Chilean and Argentine markets.  We seek to ensure our supply of this commodity by securing long-term contracts with our suppliers for terms that are expected to match the lifetime of our generation assets.  These contracts generally provide for us to purchase gas at market prices prevailing at the time the purchase occurs.  As of December 31, 2009, 2008 and 2007, we did not hold any contracts classified as either derivative financial instruments or financial instruments or derivative commodity instruments related to natural gas.  We are partially exposed to the volatility of diverse commodities as coal and diesel oil prices.  In the countries where we operate, the dispatch mechanism allows the thermal power plants to cover their variable cost.  However, under certain circumstances, fuel price fluctuations might affect the marginal costs.  In the markets where it is possible, our company has a policy of transferring these variations to the contract prices according to different indexes associated to the commodity prices.  As of December 31, 2009, 2008 and 2007, we did not hold any contracts classified as either derivative financial instruments or financial instruments or derivative commodity instruments related either to coal or to diesel oil.  Additionally, through adequate commercial risk mitigation policies, and a hydro-thermal power plant mix, we seek to naturally protect our operating income from electricity price volatility. As of December 31, 2009, we did not hold electricity price-sensitive instruments.  The Company is permanently analyzing ways for hedging commodity price risk, so we cannot discard that in the future we could subscribe to price-sensitive instruments.  Interest Rate Risk  Of our total outstanding debt obligations as of December 31, 2009, 69.0% of such debt bore interest at floating rates compared to 31.7% in 2008.  Until 2008, the debt linked to inflation was considered as fixed rate debt.  However, since 2009, we started considering this debt as variable rate debt, increasing its corresponding total amount.  This modification corresponds to a new Endesa Spains group policy.  We manage interest rate risk by maintaining a mixture of both variable and fixed rate debt.  Additionally, we manage interest rate risk through the use of interest rate derivatives.  The above percentages include the effect of interest rate derivatives (swaps or collars) that hedge part of our debt.  The recorded values for accounting purposes of our financial debt as of December 31, 2009, and the corresponding fair values of the significant financial instruments exposing us to interest rate risk are detailed below, according to the date of maturity.  Total values do not include interest rate derivatives.  125




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Contract TermsAs of December 31,
     
     2010
     
     2011
     
     2012
     
     2013
     
     2014
     
     Thereafter
     
     Total
     
     Fair Value(1)(in millions of constant Ch$)Long-term DebtFixed rate:Ch$- and UF-denominated
     
     0
     
     0
     
     0
     
     0
     
     0
     
     0
     
     0
     
     0Weighted average interest rate
     
     0.0
     %
     0.0
     %
     0.0
     %
     0.0
     %
     0.0
     %
     0.0
     %
     0.0
     %$-denominated
     
     59,199
     
     31,511
     
     30,934
     
     219,994
     
     201,527
     
     443,111
     
     986,277
     
     1,179,135Weighted average interest rate
     
     7.5
     %
     7.0
     %
     6.7
     %
     8.6
     %
     7.4
     %
     8.0
     %
     7.9
     %Other currencies(2)
     
     101,568
     
     71,436
     
     72,471
     
     53,898
     
     53,528
     
     55,050
     
     407,950
     
     438,993Weighted average interest rate
     
     4.0
     %
     8.0
     %
     7.5
     %
     7.0
     %
     7.8
     %
     7.0
     %
     6.6
     %Variable rate:Ch$- and UF-denominated
     
     15,374
     
     7,057
     
     7,176
     
     7,616
     
     7,749
     
     405,056
     
     450,028
     
     569,917Weighted average interest rate
     
     7.2
     %
     3.7
     %
     3.7
     %
     3.7
     %
     3.7
     %
     2.4
     %
     2.7
     %$-denominated
     
     175,297
     
     147,598
     
     53,624
     
     12,887
     
     111,493
     
     28,772
     
     529,671
     
     529,671Weighted average interest rate
     
     2.3
     %
     2.5
     %
     3.1
     %
     5.0
     %
     2.4
     %
     3.1
     %
     2.6
     %Other currencies(2)
     
     313,116
     
     350,462
     
     342,360
     
     124,379
     
     135,539
     
     364,045
     
     1,629,901
     
     1,751,004Weighted average interest rate
     
     10.9
     %
     11.5
     %
     12.3
     %
     10.9
     %
     9.8
     %
     8.9
     %
     10.8
     %Total
     
     664,554
     
     608,063
     
     506,564
     
     418,774
     
     509,837
     
     1,296,034
     
     4,003,827
     
     4,468,720
 
 (1)   As of December 31, 2009, fair values were calculated based on the discounted value of future cash flows expected to be paid (or received), considering current discount rates that reflect the different risks involved. (2)   Other currencies includes the Euro, the reais, the Colombian peso and the sol, among others.  By comparison, as of December 31, 2008, the recorded values for financial accounting purposes and the corresponding fair values of the significant financial instruments which expose the Company to interest rate risk, considering the new Endesa Spain policy regarding debt linked to inflation, were as follows:  Contract TermsAs of December 31,
     
     2009
     
     2010
     
     2011
     
     2012
     
     2013
     
     Thereafter
     
     Total
     
     Fair Value(1)(in millions of constant Ch$)Long-term DebtFixed rate:Ch$- and UF-denominated
     
     33,696
     
     12,383
     
     12,417
     
     6,224
     
     0
     
     0
     
     64,720
     
     48,317Weighted average interest rate
     
     13.0
     %
     12.0
     %
     12.0
     %
     12.0
     %
     0.0
     %
     0.0
     %
     12.5
     %$-denominated
     
     433,329
     
     28,247
     
     34,043
     
     38,716
     
     275,994
     
     723,232
     
     1,533,562
     
     1,932,145Weighted average interest rate
     
     8.3
     %
     6.9
     %
     7.0
     %
     6.5
     %
     8.5
     %
     7.8
     %
     8.0
     %Other currencies(2)
     
     93,763
     
     123,281
     
     66,253
     
     46,829
     
     79,262
     
     77,627
     
     487,016
     
     493,352Weighted average interest rate
     
     4.2
     %
     9.5
     %
     7.6
     %
     9.3
     %
     7.6
     %
     7.5
     %
     7.6
     %Variable rate:Ch$- and UF-denominated
     
     15,935
     
     7,113
     
     7,228
     
     7,350
     
     7,801
     
     422,852
     
     468,729
     
     585,873Weighted average interest rate
     
     15.2
     %
     16.1
     %
     16.0
     %
     16.0
     %
     16.0
     %
     9.2
     %
     9.9
     %
     $-denominated
     
     199,680
     
     208,170
     
     182,021
     
     63,328
     
     12,900
     
     173,174
     
     839,274
     
     839,159Weighted average interest rate
     
     3.8
     %
     4.7
     %
     4.7
     %
     5.7
     %
     5.0
     %
     4.4
     %
     4.5
     %
     Other currencies(2)
     
     387,887
     
     170,062
     
     346,687
     
     258,631
     
     65,037
     
     327,990
     
     1,556,295
     
     1,586,326Weighted average interest rate
     
     13.4
     %
     15.3
     %
     12.7
     %
     13.0
     %
     11.3
     %
     12.2
     %
     13.1
     %
     Total
     
     1,164,289
     
     549,258
     
     648,650
     
     421,080
     
     440,995
     
     1,724,875
     
     4,949,146
     
     5,485,172
 
 (1)   As of December 31, 2008, fair values were calculated based on the discounted value of future cash flows expected to be paid (or received), considering current discount rates that reflect the different risks involved. (2)   Other currencies includes the Euro, the reais, the Colombian peso and the sol, among others.  On the other hand, by comparison, as of December 31, 2008 the recorded values for financial accounting purposes and the corresponding fair value of these significant financial instruments which expose the Company to interest rate risk, not considering the new Endesa Spain policy regarding debt linked to inflation, were as follows:   126


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Contract TermsAs of December 31,
     
     2009
     
     2010
     
     2011
     
     2012
     
     2013
     
     Thereafter
     
     Total
     
     Fair Value(1)(in millions of constant Ch$)Long-term DebtFixed rate:Ch$- and UF-denominated
     
     36,346
     
     19,496
     
     19,645
     
     13,574
     
     7,801
     
     422,852
     
     519,715
     
     620,906Weighted average interest rate
     
     13.2
     %
     13.4
     %
     13.5
     %
     14.2
     %
     16.0
     %
     9.2
     %
     13.7
     %$-denominated
     
     433,329
     
     28,247
     
     34,043
     
     38,716
     
     275,994
     
     723,232
     
     1,533,562
     
     1,932,145Weighted average interest rate
     
     8.3
     %
     6.9
     %
     7.0
     %
     6.5
     %
     8.5
     %
     7.8
     %
     8.0
     %Other currencies(2)
     
     129,328
     
     187,710
     
     238,483
     
     48,854
     
     102,704
     
     397,852
     
     1,104,932
     
     1,136,774Weighted average interest rate
     
     7.6
     %
     12.4
     %
     10.9
     %
     9.7
     %
     7.8
     %
     11.3
     %
     10.8
     %Variable rate:Ch$- and UF-denominated
     
     13,284
     
     
     
     
     
     
     
     
     
     
     
     13,284
     
     13,284Weighted average interest rate
     
     15.2
     %
     
     
     
     
     
     
     
     
     
     
     15.2
     %
     $-denominated
     
     199,680
     
     208,170
     
     182,021
     
     63,328
     
     12,900
     
     173,174
     
     839,274
     
     839,159Weighted average interest rate
     
     3.8
     %
     4.7
     %
     4.7
     %
     5.7
     %
     5.0
     %
     4.4
     %
     4.5
     %
     Other currencies(2)
     
     352,322
     
     105,633
     
     174,457
     
     256,607
     
     41,595
     
     7,765
     
     938,379
     
     942,905Weighted average interest rate
     
     13.1
     %
     13.8
     %
     13.2
     %
     13.0
     %
     13.0
     %
     11.0
     %
     13.1
     %
     Total.
     
     1,164,289
     
     549,258
     
     648,650
     
     421,080
     
     440,995
     
     1,724,875
     
     4,949,146
     
     5,485,172
 
 (1)   As of December 31, 2008, fair values were calculated based on the discounted value of future cash flows expected to be paid (or received), considering current discount rates that reflect the different risks involved. (2)   Other currencies includes the Euro, the reais, the Colombian peso and the sol, among others.  Foreign Currency Risk  We are exposed to foreign currency risk arising from long-term debt denominated in foreign currencies, the majority of which is in dollars.  This risk is mitigated, as a substantial portion of our operating revenues is linked to the dollar either directly or indirectly.  Additionally, we manage this risk through the use of dollar/UF exchange currency swaps and dollar/peso forward foreign exchange contracts.  As of December 31, 2009, Enersis total consolidated indebtedness in financial terms reached $ 8,224 million, which includes the effect of currency hedging instruments.  From this amount, $2,357 million, or 29%, was denominated in dollars.  For the twelve-month period ended December 31, 2009, our operating revenues amounted to $ 12,897 million of which $ 750 million, or 6%, were denominated in dollars, and $ 2,436 million, or 19%, were linked in some way to the dollar.  In the aggregate, 25% of our operating revenues were either in dollars or correlated to such currency through some form of indexation.  On the other hand, the equivalent of $ 2,279 million was operating revenues in pesos, which represents 18% of our 2009 operating revenues.  The operating revenue figures discussed in this context are all prior to consolidation adjustments.  Since 2004, we have the current corporate currency risk policy.  This policy takes the level of operating income of each country that is indexed to the dollar and seeks to hedge them with liabilities in the same currency.  As of December 31, 2009, the recorded values of our financial debt for accounting purposes and the corresponding fair values of the significant financial instruments exposing us to foreign currency risk are detailed below, according to the date of maturity.  Total values do not include the effect of derivatives, except for Other foreign currency derivatives.  Contract TermsAs of December 31,
     
     2010
     
     2011
     
     2012
     
     2013
     
     2014
     
     Thereafter
     
     Total
     
     Fair
Value(1)(in millions of constant Ch$)Long-term DebtFixed rate:$-denominated
     
     59,199
     
     31,511
     
     30,934
     
     219,994
     
     201,527
     
     443,111
     
     986,277
     
     1,179,135Other currencies(2)
     
     101,568
     
     71,436
     
     72,471
     
     53,898
     
     53,528
     
     55,050
     
     407,950
     
     438,993Variable rate:$-denominated
     
     175,297
     
     147,598
     
     53,624
     
     12,887
     
     111,493
     
     28,772
     
     529,671
     
     529,671Other currencies(2)
     
     328,490
     
     357,518
     
     349,536
     
     131,995
     
     143,288
     
     769,101
     
     2,079,929
     
     2,320,921Other instruments(3)
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     $-denominated assets
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     Assets in other currencies(2)
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     Forward contracts (receive $/Pay Ch$)(1)
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     Swap contracts (receive $/Pay Ch$)
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     Other foreign currency derivatives(2)
     
     1,056
     
     646
     
     579
     
     313
     
     89,211
     
     74,620
     
     166,425
     
     213,015
 (1)   Calculated based on the Observed Exchange Rate as of December 31, 2009, which was Ch$ 507.10 = $1.00.  Fair values were calculated based on the discounted value of future cash flows expected to paid (or received), considering current discount rates that reflect the different risks involved. (2)   Other currencies includes the Euro, reais, the Colombian pesos, soles, Argentine pesos and Chilean pesos. (3)   Other instruments include cash, time deposits and short-term accounts receivables.  See Note 20 to Consolidated Financial Statements.
  
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As of December 31, 2008, the recorded values of our financial debt for accounting purposes and the corresponding fair values of the significant financial instruments exposing us to foreign currency risk, considering the new Endesa Spain policy regarding debt linked to inflation, were as follows, according to the date of maturity:  Contract TermsAs of December 31,
     
     2009
     
     2010
     
     2011
     
     2012
     
     2013
     
     Thereafter
     
     Total
     
     Fair
Value(1)(in millions of constant Ch$)Long-term DebtFixed rate:$-denominated
     
     433,329
     
     28,247
     
     34,043
     
     38,716
     
     275,994
     
     723,232
     
     1,533,562
     
     1,932,145Other currencies(2)
     
     127,458
     
     135,664
     
     78,670
     
     53,053
     
     79,262
     
     77,627
     
     551,736
     
     541,669Variable rate:$-denominated
     
     199,680
     
     208,170
     
     182,021
     
     63,328
     
     12,900
     
     173,174
     
     839,274
     
     839,159Other currencies(2)
     
     403,822
     
     177,175
     
     353,915
     
     265,982
     
     72,838
     
     750,842
     
     2,024,575
     
     2,172,200Other instruments(3)$-denominated assets.
     
     291,793
     
     107,446
     
     2,156
     
     
     
     
     
     
     
     401,395
     
     291,793Assets in other currencies(2)
     
     2,281,280
     
     85,575
     
     31,273
     
     14,268
     
     14,347
     
     58,882
     
     2,485,625
     
     2,281,280Forward contracts (receive $/Pay Ch$)(1)
     
     5,119
     
     
     
     
     
     
     
     
     
     
     
     5,119
     
     -2.2Swap contracts (receive $/Pay Ch$)
     
     
     
     
     
     
     
     
     
     
     
     381,870
     
     381,870
     
     -143.2Other foreign currency derivatives(2)
     
     70,010
     
     25,458
     
     37,657
     
     36,290
     
     19,094
     
     28,157
     
     216,666
     
     -11.8
 
 (1)   Calculated based on the Observed Exchange Rate as of December 31, 2008, which was Ch$ 636.45 = $ 1.00.  Fair values were calculated based on the discounted value of future cash flows expected to paid (or received), considering current discount rates that reflect the different risks involved. (2)   Other currencies includes the Euro, reais, the Colombian pesos, soles, Argentine and Chilean pesos. (3)   Other instruments include cash, time deposits and short-term accounts receivables.  See Note 20 to Consolidated Financial Statements.  As of December 31, 2008, the recorded values of our financial debt for accounting purposes and the corresponding fair values of the significant financial instruments exposing us to foreign currency risk, according to the date of maturity, not considering the new Endesa Spain policy regarding debt linked to inflation, were as follows:  Contract TermsAs of December 31,
     
     2009
     
     2010
     
     2011
     
     2012
     
     2013
     
     Thereafter
     
     Total
     
     Fair
Value(1)(in millions of constant Ch$)Long-term DebtFixed rate:$-denominated
     
     433,329
     
     28,247
     
     34,043
     
     38,716
     
     275,994
     
     723,232
     
     1,533,562
     
     1,932,145Other currencies(2)
     
     129,328
     
     187,710
     
     238,483
     
     48,854
     
     102,704
     
     820,704
     
     1,527,784
     
     1,136,774Variable rate:$-denominated
     
     199,680
     
     208,170
     
     182,021
     
     63,328
     
     12,900
     
     173,174
     
     839,274
     
     839,159Other currencies(2)
     
     352,322
     
     105,633
     
     174,457
     
     256,607
     
     41,595
     
     7,765
     
     938,379
     
     942,905Other instruments(3)$-denominated assets
     
     291,793
     
     107,446
     
     2,156
     
     
     
     
     
     
     
     401,395
     
     291,793Assets in other currencies(2)
     
     2,281,280
     
     85,575
     
     31,273
     
     14,268
     
     14,347
     
     58,882
     
     2,485,625
     
     2,281,280Forward contracts (receive $/Pay Ch$)(1)
     
     5,119
     
     
     
     
     
     
     
     
     
     
     
     5,119
     
     -2.2Swap contracts (receive $/Pay Ch$)
     
     
     
     
     
     
     
     
     
     
     
     381,870
     
     381,870
     
     -143.2Other foreign currency derivatives(2)
     
     70,010
     
     25,458
     
     37,657
     
     36,290
     
     19,094
     
     28,157
     
     216,666
     
     -11.8
 
 (1)   Calculated based on the Observed Exchange Rate as of December 31, 2008, which was Ch$ 636.45 = $ 1.00.  Fair values were calculated based on the discounted value of future cash flows expected to paid (or received), considering current discount rates that reflect the different risks involved. (2)   Other currencies includes the Euro, reais, the Colombian pesos, soles, Argentine and Chilean pesos. (3)   Other instruments include cash, time deposits and short-term accounts receivables.  See Note 20 to Consolidated Financial Statements.  (d)           Safe Harbor  The information in this Item 11.  Quantitative and Qualitative Disclosures About Market Risk, contains information that may constitute forward-looking statements.  See Forward-Looking Statements in the introduction of this report, for safe harbor provisions.   128


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Item 12.     Description of Securities Other Than Equity Securities  A.            Debt Securities.  Not applicable.  B.            Warrants and Rights.  Not applicable.  C.            Other Securities.  Not applicable.  D.            American Depositary Shares.  Depositary Fees and Charges  The Companys ADS program is administered by Citibank, N.A., as Depositary.  Under the terms of the Deposit Agreement, an ADS holder may have to pay the following service fees to the Depositary:  Service Fees
     FeesIssuance of Receipt; deposit of Shares (including deposits pursuant to stock dividends or any other deposits)
     Up to $ 5.00 per 100 ADSDelivery of deposited Shares or other Deposited Securities against surrender of Receipt
     Up to $ 5.00 per 100 ADSDistribution; sale or exercise of rights
     Up to $ 2.00 per 100 ADS
  The Depositary shall also charge the holders a fee of $ 1.50 or less per certificate for a Receipt or Receipts for transfers made pursuant to the terms of the Deposit Agreement.  Depositary Payments for Fiscal Year 2009  The Depositary has agreed to reimburse certain expenses related to the Companys ADS program and incurred by the Company in connection with the program.  In 2009, the Depositary reimbursed expenses related to investor relations activities for a total amount of $ 438,799.   129


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PART II  Item 13.     Defaults, Dividend Arrearages and Delinquencies  None.  Item 14.     Material Modifications to the Rights of Security Holders and Use of Proceeds  None.  Item 15.     Controls and Procedures  (a) Disclosure Controls and Procedures  The Company carried out an evaluation under the supervision and with the participation of the Companys Management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Companys disclosure controls and procedures (as defined in Rules 13 (a) - 15 (e) and 15 (d) - 15 (e) under the Exchange Act) for the year ended December 31, 2009.  There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error, and the circumvention or overriding of the controls and procedures. Accordingly, the Companys disclosure controls and procedures are designed to provide reasonable assurance of achieving their control objectives.  Based upon the Companys evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the disclosure controls and procedures are effective in providing reasonable assurance that information required to be disclosed in the reports the Company files and submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the applicable rules and forms, and that it is gathered and communicated to the Companys Management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.  (b) Managements Annual Report on Internal Control Over Financial Reporting  As required by Section 404 of the Sarbanes-Oxley Act of 2002, Enersis Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13(a)-15 (f) under the Exchange Act).  The Companys internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with IFRS.  Because of its inherent limitations, internal control over financial reporting may not necessarily prevent or detect some misstatements.  It can only provide reasonable assurance regarding financial statement preparation and presentation.  Also, projections of any evaluation of effectiveness for future periods are subject to the risk that controls may become inadequate because of changes in conditions or because the degree of compliance with the policies or procedures may deteriorate over time.  Management assessed the effectiveness of its internal control over financial reporting for the year ended December 31, 2009.  The assessment was based on criteria established in the Internal Controls  Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).  Based on the assessment, Enersis Management has concluded that as of December 31, 2009, the Companys internal control over financial reporting was effective.  (c) Attestation Report  Deloitte Auditores y Consultores Ltda., the independent registered public accounting firm that has audited our Consolidated Financial Statements, has issued an attestation report on the companys internal control over financial reporting as of December 31, 2009.  This attestation report appears on page F-2.   130


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(d) Changes in internal control  There were no changes in the Companys internal control over financial reporting that occurred during 2009 that have materially affected, or are reasonably likely to materially affect, the Companys internal control over financial reporting.  Item 16.     [Reserved]  Item 16A.       Audit Committee Financial Expert  As of December 31, 2009, the Audit Committee financial expert was Mr. Patricio Claro as determined by the Board of Directors, and was an independent member of the Directors Committe.  On April 23, 2010, the Board of Directors determined that Mr. Leonidas Vial is the new financial expert as defined under Item 16A of Form 20-F, who is serving on the Directors Committee (which performs the functions of the Audit Committee), and is an independent member of the Directors Committee, under the requirement of both Chilean law and NYSE corporate governance rules.  Item 16B.       Code of Ethics  The standards of ethical conduct at Enersis are currently governed by means of three corporate rulings or policies: the Charter Governing Executives (Estatuto del Directivo) the Internal Regulations on Conduct in Securities Markets and the Manual for the Management of Information of Interest to the Market (the Manual).  The Charter Governing Executives, approved as a corporate statute, was adopted by the Board of Directors in May 2003 and is applicable to all managers contractually related to Enersis, including the Chief Executive Officer, the Chief Financial Officer and other senior officers of the Company, and to all senior management controlled subsidiaries in which Enersis is the majority shareholder, both in Chile and internationally.  The objective of this statute is to establish standards for the governance of our managements actions.  The Internal Regulations on Conduct in Securities Markets, adopted by Enersis Board of Directors in January  2002, sets the criteria to be followed in market operations in order to make our behavior in the market more transparent and to protect market investors.  It is applicable to members of the Board of Directors, the senior executives, and the executives and employees of Enersis determined by the Chief Executive Officer, and known to the Chairman, who work in areas related to the securities market or have access to privileged information.  The Manual, adopted by Enersis Board of Directors in May 2008 and amended on February 2010, addresses the following issues: applicable standards to the information of transactions of the Companys securities or those of its affiliates by directors, management, principal executives, employees and other related parties; existence of blackout periods for such transactions by directors, management, principal executives, employees and other related parties; existence of mechanisms for the continuous revelation of information that is of interest to the market; and mechanisms that provide protection for confidential information.  A copy of these documents is available upon request, free of charge, by writing or calling us at:  Investor Relations Department 
ENERSIS S.A. 
Santa Rosa 76
Santiago, Chile
(56-2) 353-4682  During fiscal year 2009, there have been no amendments to any provisions of the Charter Governing Executives, the Internal Regulations on Conduct in Securities Markets nor the Manual.  No waivers from any provisions of the Charter Governing Executives, the Internal Regulations on Conduct in Securities Markets or the Manual, were expressly or implicitly granted to the Chief Executive Officer, the Chief Financial Officer or any other senior financial officer of the Company in fiscal year 2009.   131


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Item 16C.       Principal Accountant Fees and Services  The following table provides information on the aggregate fees billed by our principal accountants, Deloitte Auditores y Consultores Ltda., as well as the other member firms of Deloitte Touche Tohmatsu and their respective affiliates (including Deloitte Consulting) by type of service rendered for periods indicated.  Services Rendered
     
     2008
     
     2009(million of $)Audit Fees (1)
     
     2.9
     
     3.1Audit-Related Fees (2)
     
     0.2
     
     0.2Tax Fees
     
     0.1
     
     All Other Fees
     
     
     
     Total
     
     3.2
     
     3.3
 
  (1)
     
     During 2009, Deloitte Auditores y Consultores Ltda. has increased its audit fees mainly due to the introduction of IFRS in Chile.(2)
     
     The figure for 2009 mainly includes fees paid for bond issuances in Brazil for $ 166,371, and sustainability report in Chile and Peru for $ 43,519.  The 2008 figure mainly includes fees paid for due diligence works in Chile for $ 85,535 and a special requirement of the Chilean regulator for $ 48,593
  The amounts included in the table above and the related footnotes have been classified in accordance with SEC guidance.  100% of the fees disclosed under Audit-Related Fees, Tax Fees and All Other Fees were pre-approved by the Audit Committee.  Audit committee Pre-Approval Policies and Procedures  Our external auditors are appointed by our shareholders at the OSM.  Similarly, the shareholders of our subsidiaries, which are located in countries where applicable law and regulation so establishes, appoint their own external auditors.  The Audit Committee, through the Economic Financial General Directorate, or EFGD, manages appointment proposals, review of engagement letters, fee negotiations, quality control in respect of the services provided, review and control of independence issues and other related matters.  The Audit Committee has a pre-approval policy regarding the contracting of Enersis external auditor, or any affiliate of the external auditor, for professional services.  The professional services covered by such policy include audit and non-audit services provided to Enersis.  Fees payable in connection with recurring audit services are pre-approved as part of our annual budget. Fees payable in connection with non-recurring audit services, once they have been analyzed by the EFGD, are submitted to the Audit Committee for approval or rejection.  The pre-approval policy established by the Audit Committee for non-audit services is as follows:  
     
     The business unit that has requested the service and the audit firm requested to perform the service must request that the EFGD manager review the nature of the service to be provided.
     
     At that point, the EFGD analyzes the request and requires the audit firm that has been requested to provide the service to issue a certificate signed by the partner responsible for the audit of our Consolidated Financial Statements confirming such audit firms independence.
     
     Finally, the proposal is submitted to the Audit Committee for approval or denial.
  The services described in footnote (2) to the table above were approved in line with the procedure described immediately above since July 2005.   132


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In addition, due to the SEC release number 34-53677 File No. PCAOB-2006-01 (Audit Committee Pre-Approval of Certain Tax Services), the Audit Committee has designed, approved and implemented the necessary procedures to fulfill the new requirements described by this rule.  Item 16D.Exemptions from Listing Requirements for Audit Committees  Not applicable.  Item 16E.Purchases of Equity Securities by the Issuer and Affiliated Purchasers  Neither Enersis nor any affiliated purchaser acquired any shares of Enersis during 2009.  Item 16F.Change in Registrant’s Certifying Accountants  During the years ended December 31, 2008 and 2009 and through the date of this Annual Report, the principal independent accountant engaged to audit our financial statements, Deloitte S.L., has not resigned, indicated that it has declined to stand for re-election after the completion of its current audit or been dismissed.  Item 16G.Corporate Governance  To review the significant differences between our corporate governance practices and the NYSE Corporate Governance Standards, please see “Item 6. Directors, Senior Management and Employees—C. Board practices.”  133


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PART III  Item 17.     Financial Statements  None.  Item 18.     Financial Statements  ENERSIS S.A. and Subsidiaries  Index to the Audited Consolidated Financial Statements  Report of Independent Accountants:Report of Deloitte Auditores y Consultores Ltda.– Enersis S.A.
     F-1Report of Deloitte Auditores y Consultores Ltda.– Enersis S.A.– Internal Control over Financial Reporting
     F-2Report of KPMG.Auditores Consultores Ltda. – Empresa Nacional de Electricidad S.A.
     F-4Report of KPMG Auditores Consultores Ltda. – Empresa Nacional de Electricidad S.A. – Internal Control over Financial Reporting
     F-6Report of Deloitte Touche Tohmatsu Auditores Independentes – Endesa Brasil S.A.
     F-8Report of Deloitte & Touche Ltda. – Emgesa S.A. E.S.P.
     F-9Consolidated Financial Statements:Consolidated Statements of Financial Position as of December 31, 2009 and 2008 and as of January 1, 2008
     F-10Consolidated Statements of Comprehensive Income  for the years ended December 31, 2009 and 2008
     F-12Consolidated Statements of Changes in Equity for the years ended December 31, 2009 and 2008
     F-13Consolidated Statements of Cash Flows for the years ended December 31, 2009 and 2008
     F-14Notes to the Consolidated Financial Statements
     F-16SCHEDULE I Enersis S.A.’s condensed unconsolidated financial information
     F-139
  Item 19.     Exhibits  Exhibit
     
     Description1.1
     
     By-laws (Estatutos) of ENERSIS S.A., as amended1.2
     
     By-laws (Estatutos) of ENERSIS S.A., as amended (English translation)8.1
     
     List of Subsidiaries as of December 31, 200912.1
     
     Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act12.2
     
     Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act13.1
     
     Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act
   We will furnish to the Securities and Exchange Commission, upon request, copies of any unfiled instruments that define the rights of stakeholders of Enersis.   134


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SIGNATURES  The registrant certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this report on its behalf.  Date:  June 11, 2010  ENERSIS S.A.By:
     /s/ Ignacio Antoñanzas A.Name:   Ignacio Antoñanzas A.Title:     Chief Executive Officer
    135


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Enersis and Subsidiaries Audited Consolidated Financial Statements for the years ended December 31, 2009 and 2008 together with the Reports of Independent Registered Public Accounting Firms


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Enersis and Subsidiaries  Index to the Audited Consolidated Financial Statements **** Reports of Independent Registered Public Accounting Firms:Report of Deloitte Auditores y Consultores Ltda.– Enersis S.A.
     F-1Report of Deloitte Auditores y Consultores Ltda.– Enersis S.A.– Internal Control over Financial Reporting
     F-2Report of KPMG.Auditores Consultores Ltda. – Empresa Nacional de Electricidad S.A.
     F-4Report of KPMG Auditores Consultores Ltda. – Empresa Nacional de Electricidad S.A. – Internal Control over Financial Reporting
     F-6Report of Deloitte Touche Tohmatsu Auditores Independentes – Endesa Brasil S.A.
     F-8Report of Deloitte & Touche Ltda. – Emgesa S.A. E.S.P.
     F-9Consolidated Financial Statements:Consolidated Statements of Financial Position as of December 31, 2009 and 2008 and as of January 1, 2008
     F-10Consolidated Statements of Comprehensive Income  for the years ended December 31, 2009 and 2008
     F-12Consolidated Statements of Changes in Equity for the years ended December 31, 2009 and 2008
     F-13Consolidated Statements of Cash Flows for the years ended December 31, 2009 and 2008
     F-14Notes to the Consolidated Financial Statements
     F-16SCHEDULE I Enersis S.A.’s condensed unconsolidated financial information
     F-139  
 Ch$                     Chilean pesos US$                     United States dollars UF                       The UF is a Chilean inflation-indexed, peso-denominated monetary unit that is set daily in advance based on the previous month’s inflation rate. ThCh$                Thousand of Chilean pesos ThUS$                Thousand of United States dollars


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Deloitte Auditores y Consultores Ltda.RUT: 80.276.200-3Av. Providencia 1760Pisos 6, 7, 8, 9 y 13Providencia, SantiagoChileFono: (56-2) 729 7000Fax: (56-2) 374 9177e-mail: deloittechile@deloitte.comwww.deloitte.cl
  REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders ofEnersis S.A.: We have audited the accompanying consolidated statements of financial position of Enersis S.A. and subsidiaries (theCompany) as of December 31, 2009 and 2008 and January 1, 2008, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the years ended December 31, 2009 and 2008, and the schedule of Enersis S.A.'s condensed unconsolidated financial information. These consolidated financial statements and the scheduleare the responsibility of the Company's management. Our responsibility is toexpress an opinion on these consolidated financial statements and the schedule based on our audits. We did not audit the financial statements of Empresa Nacional de Electricidad S.A., certain of its consolidated subsidiaries, certain of its associates accounted for using the equity method and certain of its jointly controlled entities accounted for using proportionate consolidation(hereinafter collectively referred to as Endesa-Chile ), which statements reflect total assets constituting 31.01%, 33.14% and 29.59%of the Company's consolidated totalassets as of December 31, 2009 and 2008 and January 1, 2008, respectively, and total revenues constituting 24.03% and 28.11%of the Company's consolidatedtotal revenues for the years ended December 31, 2009 and 2008, respectively. Those consolidated financial statements were audited by other auditors whose reports have been furnished to us and our opinion, insofar as it relates to the amounts included for Endesa-Chile, is based solely on the reports of the other auditors. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States of America). 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 and the reports of the other auditors provide a reasonable basis for our opinion. In our opinion, based on our audits and the reports of the other auditors, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Enersis S.A. and subsidiaries as of December 31, 2009 and 2008 and January 1, 2008, and the results of their operations and their cash flows for the years ended December 31, 2009 and 2008, in conformity with International Financial Reporting Standards (IFRS) as issuedby the International Accounting Standards Board (IASB). Also, in our opinion, the schedule of Enersis’s condensed unconsolidated financial information, when considered in relation to the basic financial statements, taken as a whole, presents fairly in all material respects the information set forth therein. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States of America), the Company's internal control over financial reporting as of December 31, 2009, based on the criteria established in Internal ControlIntegrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated May 26, 2010 expressed an unqualified opinion on the effectiveness of the Company's internal control over financial reporting, based on our audit and the report of the other auditors. Santiago, Chile 
May 26, 2010 F - 1


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Deloitte Auditores y Consultores Ltda.RUT: 80.276.200-3Av. Providencia 1760Pisos 6, 7, 8, 9 y 13Providencia, SantiagoChileFono: (56-2) 729 7000Fax: (56-2) 374 9177e-mail: deloittechile@deloitte.comwww.deloitte.cl
  REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders ofEnersis S.A.: We have audited the internal control over financial reporting of Enersis S.A. and subsidiaries (the "Company") as of December 31, 2009, based on criteria established in Internal ControlIntegrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanyingManagement's Annual Report on Internal Control OverFinancial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We did not examine the effectiveness of internal control over financial reporting of Empresa Nacional de Electricidad S.A. and certain subsidiaries (collectively hereinafter referred to asEndesa-Chile), whose financial statements reflect totalassets and revenues constituting 31.01% and 24.03% percent, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2009. The effectiveness of Endesa-Chilesinternal control over financial reporting was audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the effectiveness of Endesa-Chilesinternal control over financial reporting, is based solely on the report of the other auditors. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. A company's internal control over financial reporting is a process designed by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions, and effected by the company's board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. F - 2


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Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. In our opinion, based on our audit and the report of the other auditors, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2009, based on the criteria established in Internal ControlIntegrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States of America), the consolidated financial statements as of and for the year ended December 31, 2009 of the Company and our report dated May 26, 2010 expressed an unqualified opinion on those financial statements based on our audit and the report of the other auditors. Santiago, Chile 
May 26, 2010
  F - 3


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KPMG Auditores Consultores Ltda.
     Phone   +56 (2) 798 10003520 Isidora Goyenechea Av., 2ndfloor
     Fax       +56 (2) 798 1001Las Condes, Santiago, Chile
     www.kpmg.cl
  Report of Independent Registered Public Accounting Firm The Board of Directors and Shareholders ofEmpresa Nacional de Electricidad S.A.(Endesa-Chile): We have audited the accompanying consolidated statements of financial position of Endesa-Chile and subsidiaries (the Company) as of December 31, 2009 and 2008, and January 1, 2008, and the related consolidated statements of comprehensive income, changes in equity, and cash flows for each of the years in the two-year period ended December 31, 2009. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We did not audit the December 31, 2009 and 2008 financial statements of certain subsidiaries and nonsubsidiary investees carried on the equity method of accounting, which statements reflect total assets constituting 33.02 percent and 32.63 percent of the Company's consolidated total asset position as of December 31, 2009 and 2008, respectively, and total revenues constituting 23.48 percent and 18.09 percent of the Company's consolidated revenues for the years ended December 31, 2009 and 2008, respectively. Those consolidated financial statements prepared in accordance with the local statutory accounting basis were audited by other auditors whose reports have been furnished to us and our opinion, insofar as it relates to the amounts included for those entities on such basis of accounting, is based solely on the reports of the other auditors. Accordingly, we have audited the conversion adjustments to the financial statements of these subsidiaries and nonsubsidiary investees prepared in accordance with the local statutory accounting basis to conform them to the Company s accounting basis referred to below. 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 consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, 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 and the reports of the other auditors provide a reasonable basis for our opinion. In our opinion, based on our audits and the reports of the other auditors, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Endesa-Chile and subsidiaries as of December 31, 2009 and 2008 and January 1, 2008, and the results of their operations and their cash flows for each of the years in the two-year period ended December 31, 2009, in conformity with International Financial Reporting Standards (IFRS). KPMG Auditores Consultores Ltda. a Chilean member firm of KPMG International, a Swiss cooperative. All rights reserved. F - 4


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We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Endesa-Chile's internal control over financial reporting as of December 31, 2009, based on the criteria established in Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated May 25, 2010, expressed an unqualified opinion on the effectiveness of the Company s internal control over financial reporting.  KPMG Auditores Consultores Ltda. Santiago, Chile May 25, 2010  KPMG Auditores Consultores Ltda. a Chilean member firm of KPMG International, a Swiss cooperative. All rights reserved. F - 5


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KPMG Auditores Consultores Ltda.
     Phone      +56 (2) 798 10003520 Isidora Goyenechea Av., 2ndfloor
     Fax         +56 (2) 798 1001Las Condes, Santiago, Chile
     www.kpmg.cl
  Report of Independent Registered Public Accounting Firm The Board of Directors and Shareholders ofEmpresa Nacional de Electricidad S.A.(Endesa-Chile): We have audited Endesa-Chile's internal control over financial reporting as of December 31, 2009, based on criteria established inInternal Control - Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Endesa-Chile's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanyingManagement's Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on Endesa-Chile's internal control over financial reporting based on our audit. We conducted our audit 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 effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. KPMG Auditores Consultores Ltda. a Chilean member firm of KPMG International, a Swiss cooperative. All rights reserved. F - 6


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In our opinion, Endesa-Chile maintained, in all material respects, effective internal control over financial reporting as of December 31, 2009, based on criteria established inInternal Control - Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated statement of financial position of Endesa-Chile and subsidiaries as of December 31, 2009, and the related consolidated statements of comprehensive income, changes in equity, and cash flows for the year then ended, and our report dated May 25, 2010 expressed an unqualified opinion on those consolidated financial statements.  KPMG Auditores Consultores Ltda. Santiago, Chile May 25, 2010 KPMG Auditores Consultores Ltda. a Chilean member firm of KPMG International, a Swiss cooperative. All rights reserved.  F - 7


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Deloitte Touche TohmatsuAuditores IndependentesAv. Presidente Wilso n, 231220 andarRio de Janeiro - RJ -20030-021BrasilTe l: +55 (21) 3981-0500Fax :+55 (21) 3981-0600www.deloitte.com.br
  REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of Endesa Brasil S.A.
Niterói - RJ 1.
     We have audited the accompanying consolidated balance sheets of Endesa Brasil S.A . and subsidiaries (the "Company") as of December 31, 2009 and 2008 , and the related consolidated statements of income, changes in shareholders' equity, and cash flows for the years then ended. These financial statements, prepared in accordance with accounting practices adopted in Brazil and presented in Brazilian real, 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 auditing 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. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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.
     In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Endesa Brasil S.A. and subsidiaries as of December 31, 2009 and 2008, and the results of their operations, changes in shareholders' equity, and cash flows for the years then ended in accordance with accounting practices adopted in Brazil.4.
     As mentioned in note 1 to the consolidated financial statements, the subsidiary Companhia de Interconexao Energetica - CIEN is seeking alternatives for new businesses, including the discussions with the regulatory agencies to change CIEN's "trading" activity to "transmission" activity, in order to obtain the Allowed Annual Revenue (RAP).
    DELOITTE TOUCHE TOHMATSU
Auditores Independentes Rio de Janeiro 
May 25, 2010 F - 8


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Deloitte & Touche Ltda.Cra. 7 N° 94 - 09A.A. 075874Nit. 860.005.813-14Bogotá D.C.ColombiaTel: +57(1) 5461810 - 5461815Fax: +57(1) 2178088www.deloitte.com/co
  REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Shareholders ofEmgesa S.A. E.S.P.: We have audited the accompanying balance sheets of EMGESA S.A. E.S.P. (the "Company") as of December 31, 2009 and 2008, and the related statements of income, shareholders' equity, changes in financial position and cash flows for the years then ended. 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. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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. In our opinion, such financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2009 and 2008, and the results of its operations, changes in financial position and cash flows for the years then ended in conformity with accounting principles generally accepted in Colombia. Deloitte & Touche Ltda. May 25, 2010 
Bogotá, Colombia    F - 9


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ENERSIS S.A. AND SUBSIDIARIES  Consolidated Statements of Financial Position As of December 31, 2009, December 31, 2008, and January 1, 2008 (In thousands of Chilean pesos – ThCh$)
  ASSETS
     Note
     12-31-2009
     12-31-2008
     01-01-2008ThCh$
     ThCh$
     ThCh$CURRENT ASSETS
     
     2,571,455,657
     2,942,721,087
     2,071,684,795Current Operating Assets
     
     2,501,094,806
     2,942,721,087
     2,071,684,795Cash and cash equivalents
     5
     1,134,900,821
     1,318,061,963
     588,877,065Financial assets at fair value with changes through net income
     20
     1,493,492
     -
     -Other financial assets
     20
     42,657
     -
     -Trade accounts receivable and other receivables, net
     6
     1,138,646,562
     1,313,066,854
     1,159,930,650Accounts receivable from related companies
     7
     19,014,232
     24,746,692
     52,579,384Inventories
     8
     56,319,268
     96,975,161
     96,743,485Prepayments
     
     11,559,440
     8,894,236
     10,916,229Current tax receivable
     9
     112,175,952
     152,700,466
     146,791,421Other assets
     
     26,942,382
     28,275,715
     15,846,561Non-current assets and disposal groups held for sale
     10
     70,360,851
     -
     -NON-CURRENT ASSETS
     
     10,638,684,664
     10,838,455,413
     9,853,446,756Available-for-sale financial assets
     11
     2,512,716
     22,495,036
     22,500,804Other financial assets
     12
     25,746,002
     1,746,462
     25,635,319Trade accounts receivable and other receivables, net
     6
     194,977,413
     319,283,809
     253,273,272Accounts receivable from related companies
     7
     -
     641,336
     505,026Investments in associates accounted for using the equity method
     13
     21,281,461
     37,833,671
     12,454,619Intangible assets, net
     14
     2,947,474,178
     2,626,894,224
     2,561,293,136Property, plant and equipment, net
     15
     6,864,071,242
     7,215,792,131
     6,334,857,266Investment properties
     16
     31,231,839
     26,368,681
     28,504,034Deferred tax assets
     17
     454,896,521
     511,300,668
     541,265,109Hedging instrument
     20
     2,238,039
     2,486,652
     1,035,531Prepayments
     
     834,131
     1,202,581
     1,385,608Other assets
     
     93,421,122
     72,410,162
     70,737,032TOTAL ASSETS
     
     13,210,140,321
     13,781,176,500
     11,925,131,551
   The attachednotes are an integral part of these consolidated financial statements  F - 10


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ENERSIS S.A. AND SUBSIDIARIES  Consolidated Statements of Financial Position As of December 31, 2009, December 31, 2008, and January 1, 2008 (In thousands of Chilean pesos – ThCh$)
  LIABILITIES AND EQUITY
     Note
     12-31-2009
     12-31-2008
     01-01-2008ThCh$
     ThCh$
     ThCh$CURRENT LIABILITIES
     
     2,195,387,538
     2,702,780,184
     1,814,698,609Current Operating Liabilities
     
     2,144,737,172
     2,702,780,184
     1,814,698,609Interest-bearing loans
     18
     721,511,320
     1,272,965,333
     735,415,257Other financial liabilities
     
     696,791
     -
     -Trade accounts payable and other payables
     21
     976,506,464
     949,308,773
     778,360,284Accounts payable to related companies
     7
     111,955,779
     116,021,988
     69,457,930Provisions
     22
     100,024,455
     109,531,819
     78,637,754Current tax payable
     9
     185,285,671
     201,275,475
     102,642,159Other liabilities
     
     29,880,038
     32,080,608
     20,733,425Deferred revenues
     24
     5,519,586
     12,180,284
     14,223,406Post-employment benefit obligations
     23
     4,915,167
     5,147,403
     4,374,795Hedging instruments
     20
     8,441,901
     4,268,501
     10,853,599Liabilities included in disposal groups classified as held for sale
     10
     50,650,366
     -
     -NON-CURRENT LIABILITIES
     
     4,637,749,139
     5,049,265,096
     4,604,868,856Interest-bearing loans
     18
     3,323,906,197
     3,825,346,360
     3,369,575,079Trade accounts payable and other payables
     21
     58,727,503
     49,133,974
     42,961,467Accounts payable to related companies
     7
     3,556,672
     8,977,789
     8,161,792Provisions
     22
     250,286,912
     212,959,573
     200,023,232Deferred tax liabilities
     17
     573,049,297
     635,013,331
     589,952,913Other liabilities
     
     35,049,979
     33,824,353
     31,468,018Deferred revenues
     24
     3,552,342
     4,419,730
     3,824,825Post-employment benefit obligations
     23
     182,688,990
     175,537,177
     145,482,715Hedging instruments
     20
     206,931,247
     104,052,809
     213,418,815EQUITY
     
     6,377,003,644
     6,029,131,220
     5,505,564,086Equity attributable to shareholders of the company
     
     3,518,479,555
     3,091,314,880
     2,901,130,937Issued share capital
     25
     2,983,642,483
     2,983,642,483
     2,752,775,107Reserves
     25
     (1,481,429,808)
     (1,403,037,146)
     (723,745,034)Retained earnings
     25
     2,016,266,880
     1,510,709,543
     872,100,864Equity attributable to Minority Interest
     25
     2,858,524,089
     2,937,816,340
     2,604,433,149TOTAL LIABILITIES AND EQUITY
     
     13,210,140,321
     13,781,176,500
     11,925,131,551
   The attachednotes are an integral part of these consolidated financial statements  F - 11


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ENERSIS S.A. AND SUBSIDIARIES  Consolidated Statements of Comprehensive Income For the years ended December 31, 2009 and 2008 (In thousands of Chilean pesos – ThCh$, except share data)
  January - DecemberSTATEMENT OF COMPREHENSIVE INCOME
     Note
     2009
     2008ThCh$
     ThCh$Sales
     26
     6,076,107,565
     6,080,511,020Other operating income, total
     26
     373,780,873
     479,080,416Total Revenues
     
     6,449,888,438
     6,559,591,436Consumption of raw and secondary materials
     27
     (3,205,851,169)
     (3,542,951,730)Contribution Margin
     
     3,244,037,269
     3,016,639,706Employee expenses
     28
     (336,671,926)
     (290,028,873)Depreciation and amortization
     29
     (454,369,959)
     (417,710,326)Impairment losses
     29
     (65,927,354)
     -Other miscellaneous operating expenses
     30
     (462,431,605)
     (445,249,879)Operating Income
     
     1,924,636,425
     1,863,650,628Gain (loss) on derecognition of available-for-sale financial assets
     32
     28,113,548
     964,000Total gain (loss) on sale of non-current assets not held for sale
     32
     25,197,831
     1,539,279Financial expenses
     31
     (482,472,627)
     (515,108,257)Gain (loss) from investments
     33
     159,808,348
     181,789,017Share of the profit (loss) of associates accounted for using the equity method
     13
     2,235,579
     3,261,180Foreign currency exchange differences, net
     31
     (8,235,253)
     (23,632,778)Gain (loss) for indexed assets and liabilities
     31
     21,781,329
     (62,378,252)Net Income Before Tax
     
     1,671,065,180
     1,450,084,817Income tax
     34
     (359,737,610)
     (415,902,784)Net Income  After Tax from Continuing Operations
     
     1,311,327,570
     1,034,182,033Profit (loss) from discontinued operations, net of tax
     
     -
     -Net Income
     
     1,311,327,570
     1,034,182,033Attributable to:Shareholders of the company
     
     660,231,043
     507,589,633Minority interest
     
     651,096,527
     526,592,400Net Income
     
     1,311,327,570
     1,034,182,033Earnings (Loss) Per ShareBasic earnings per shareBasic earnings (loss) per share
     Ch$ / share
     20.22
     15.55Basic earnings (loss) per share from continuing operations
     Ch$ / share
     20.22
     15.55Diluted earnings per shareDiluted earnings (loss) per share
     Ch$ / share
     20.22
     15.55Diluted earnings (loss) per share from continuing operations
     Ch$ / share
     20.22
     15.55Statement of Other Comprehensive IncomeNet income
     
     1,311,327,570
     1,034,182,033Other Comprehensive IncomeAvailable-for-sale financial assets
     
     59,941
     436Cash flow hedge
     
     201,849,056
     (301,007,749)Foreign currency translation
     
     (237,426,556)
     191,156,367Share of other comprehensive income (loss) of associates
     
     (17,358,564)
     214,148Actuarial gain (loss) on defined benefit pension plans
     
     (19,249,042)
     (31,441,287)Other adjustments to equity
     
     (2,128,372)
     -Income tax effect related to the components of other comprehensive income (loss)
     
     (27,897,293)
     55,669,712Total Other Comprehensive Income
     
     (102,150,830)
     (85,408,373)Total Comprehensive Income
     
     1,209,176,740
     948,773,660Attributable toShareholders of the company
     
     655,007,019
     433,164,534Minority interest
     
     554,169,721
     515,609,126Total Comprehensive Income
     
     1,209,176,740
     948,773,660
  The attachednotes are an integral part of these consolidated financial statements  F - 12


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ENERSIS S. A. AND SUBSIDIARIES  Consolidated Statements of Changes in Equity For the years ended December 31, 2009 and 2008 (In thousands of Chilean pesos – ThCh$)
  Statement of Changes in Equity, Net
     Changes in Issued Capital
     Changes in Other Reserves
     Changes in Retained Earnings
     Changes in Equity Attributable to Parent
     Changes in Minority Interest
     Changes in Equity, TotalOrdinary Shares
     Proposed Dividend Reserves
     Translation Reserves
     Hedging Reserves
     Available-for-Sale Reserves
     Cumulative Income (Expense) Relating to Non-Current Assets and Disposal Groups Held for Sale
     Miscellaneous Other ReservesShare Capital
     Share PremiumOpening Balance at 01/01/08
     2,594,015,459
     158,759,648
     (37,842,392)
     199,615,814
     (44,390,168)
     9,108
     -
     (841,137,396)
     872,100,864
     2,901,130,937
     2,604,433,149
     5,505,564,086Prior Period AdjustmentsPrior Period Errors Affecting Equity
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Change in Accounting Policy Affecting Equity
     -
     
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Prior Period Adjustments
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Restated Opening Balance
     2,594,015,459
     158,759,648
     (37,842,392)
     199,615,814
     (44,390,168)
     9,108
     -
     (841,137,396)
     872,100,864
     2,901,130,937
     2,604,433,149
     5,505,564,086ChangesComprehensive Income
     
     
     
     84,462,951
     (145,917,895)
     457
     -
     128,445
     494,490,576
     433,164,534
     515,609,126
     948,773,660Declared Cash Dividends
     
     
     (119,138,817)
     
     
     
     
     -
     (123,841,774)
     (242,980,591)
     (252,290,387)
     (242,980,591)Transfers to (from) Retained Earnings
     
     
     37,842,392
     
     
     
     
     
     (37,842,392)
     -
     
     -Other Increase (Decrease) in Net Equity
     230,867,376
     -
     -
     (247,599)
     (86,459,544)
     -
     -
     (449,962,502)
     305,802,269
     -
     70,064,452
     (182,225,935)Changes in Equity
     230,867,376
     -
     (81,296,425)
     84,215,352
     (232,377,439)
     457
     -
     (449,834,057)
     638,608,679
     190,183,943
     333,383,191
     523,567,134Ending Balance at 12/31/2008
     2,824,882,835
     158,759,648
     (119,138,817)
     283,831,166
     (276,767,607)
     9,565
     -
     (1,290,971,453)
     1,510,709,543
     3,091,314,880
     2,937,816,340
     6,029,131,220
  Statement of Changes in Equity, Net
     Changes in Issued Capital
     Changes in Reserves
     Changes in Retained Earnings
     Changes in Equity Attributable to Parent
     Changes in Minority Interest
     Changes in Equity, TotalCommon Shares
     Proposed Dividend Reserves
     Translation Reserves
     Hedging Reserves
     Available-for-Sale Reserves
     Cumulative Income (Expense) Relating to Non-Current Assets and Disposal Groups Held for Sale
     Other ReservesShare Capital
     Share PremiumOpening Balance at 01/01/2009
     2,824,882,835
     158,759,648
     (119,138,817)
     283,831,166
     (276,767,607)
     9,565
     
     (1,290,971,453)
     1,510,709,543
     3,091,314,880
     2,937,816,340
     6,029,131,220Prior Period AdjustmentsPrior Period Errors Affecting Equity
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Change in Accounting Policy Affecting Equity
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Prior Period Adjustments
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Restated Opening Balance
     2,824,882,835
     158,759,648
     (119,138,817)
     283,831,166
     (276,767,607)
     9,565
     -
     (1,290,971,453)
     1,510,709,543
     3,091,314,880
     2,937,816,340
     6,029,131,220ChangesComprehensive Income
     
     
     
     (80,352,490)
     92,118,271
     32,134
     (16,213,663)
     4,953,582
     654,469,185
     655,007,019
     554,169,721
     1,209,176,740Declared Cash Dividends
     
     
     (198,069,313)
     
     
     
     
     -
     (29,773,031)
     (227,842,344)
     (400,612,182)
     (227,842,344)Transfers to( from) Retained Earnings
     
     
     119,138,817
     
     
     
     
     
     (119,138,817)
     -
     
     -Other Increase (Decrease) in Net Equity
     -
     -
     -
     
     -
     -
     -
     -
     -
     -
     (232,849,790)
     (633,461,972)Changes in Equity
     -
     -
     (78,930,496)
     (80,352,490)
     92,118,271
     32,134
     (16,213,663)
     4,953,582
     505,557,337
     427,164,675
     (79,292,251)
     347,872,424Ending Balance at 12/31/2009
     2,824,882,835
     158,759,648
     (198,069,313)
     203,478,676
     (184,649,336)
     41,699
     (16,213,663)
     (1,286,017,871)
     2,016,266,880
     3,518,479,555
     2,858,524,089
     6,377,003,644
   The accompanying notes are an integral part of these consolidated financial statements  F - 13


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ENERSIS S.A. AND SUBSIDIARIES  Consolidated Statements of Cash Flows For the years ended December 31, 2009 and 2008 (In thousands of Chilean pesos – ThCh$)
  Net Cash Flows provided by (used in) Operating Activities, Indirect Method
     Note
     2009
     2008ThCh$
     ThCh$Cash Flows provided by (used in) Operations, Indirect MethodOperating Cash Flows Before Changes in Working CapitalReconciliation of Net Income to Operating IncomeNet income
     
     1,311,327,570
     1,034,182,033Adjustments to reconcile to net operating income
     
     638,506,686
     831,007,874Financial expenses
     31
     460,691,298
     577,486,509Financial income
     33
     (159,670,405)
     (181,753,335)Dividend income
     33
     (137,943)
     (35,682)Income tax
     34
     359,737,610
     415,902,784Share of the (profit ) loss of associates accounted for using the equity method, net of cash distributions received
     
     (2,235,579)
     (3,261,180)Other adjustments to reconcile net income to operating income
     
     (19,878,295)
     22,668,778Operating income
     
     1,949,834,256
     1,865,189,907Non-monetaryadjustments
     
     509,336,826
     397,875,623Depreciation
     29
     346,587,547
     330,545,457Amortization of intangible assets
     29
     107,782,412
     87,164,869Impairment losses
     29
     65,927,354
     -Loss (gain) on sales of non-current assets not held for sale
     32
     (25,197,831)
     (1,539,279)Increase of provisions
     
     104,172,053
     34,290,209Reversal of unused provisions
     22
     (49,448,442)
     (29,414,181)Used provisions
     22
     (38,287,307)
     (27,282,144)Decrease (increase) in deferred tax assets
     
     (6,786,064)
     (1,804,984)Increase (decrease) in deferred tax liabilities
     
     (3,091,533)
     (3,008,176)Other non-monetary adjustments
     
     7,678,637
     8,923,852Total operating cash flows before changes in working capital
     
     2,459,171,082
     2,263,065,530Increase (Decrease) in Working Capital :
     
     (187,255,612)
     (271,561,477)Non-Current Assets and Disposal Groups Held for Sale
     
     (92,276,700)
     -Inventories
     
     31,682,662
     8,248,778Trade accounts receivable and other receivables
     
     112,512,315
     (168,319,588)Prepayments
     
     (4,619,699)
     (18,691,930)Other Assets
     
     140,620,316
     40,485,420Trade accounts payable and other payables
     
     (218,629,211)
     (55,137,025)Deferred revenues
     
     (4,037,407)
     1,492,814Accruals
     
     (13,316,393)
     (7,953,946)Taxes  Payable
     
     (134,097,395)
     (81,058,521)Post-Employment Benefit Obligations
     
     10,385,489
     19,622,453Other Liabilities
     
     (15,479,589)
     (10,249,932)Net cash flows provided by (used in) operating activities
     
     2,271,915,470
     1,991,504,053Net cash flows provided by (used in) other operating activities
     
     (233,585,779)
     (80,307,267)Proceeds from refunded Income Tax
     
     824,475
     11,451,436Payments of income tax
     
     (234,513,529)
     (90,569,868)Other Inflows (Outflows) from Other Operating Activities
     
     103,275
     (1,188,835)Net cash flows provided by (used in) operating activities
     
     2,038,329,691
     1,911,196,786
   The accompanying notes are an integral part of these consolidated financial statements  F - 14


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ENERSIS S.A. AND SUBSIDIARIES  Consolidated Statements of Cash Flows For the years ended December 31, 2009 and 2008 (In thousands of Chilean pesos – ThCh$)
  Continued.  Net Cash Flows provided by (used in) investing and financing activities, Indirect Method
     Note
     2009
     2008ThCh$
     ThCh$Net Cash Flows provided by (used in) Investing Activities
     
     (867,266,576)
     (707,100,714)Proceeds from sales of property, plant and equipment
     
     7,559,368
     14,139,478Proceeds from sales of intangible assets
     
     5,292,416
     -Proceeds from sales of other financial assets
     
     190,166,892
     7,730,911Other cash flows provided by (used in) investing activities
     
     9,847,726
     86,575,552Proceeds from dividends received classified for investing purposes
     
     2,675,741
     5,826,418Proceeds from interest received classified for investing purposes
     
     4,346,438
     11,043,445Purchases of property, plant and equipment
     
     (526,521,933)
     (496,750,943)Acquisitions of investment properties
     
     (12,641)
     (50,359)Acquisitions of intangible assets
     
     (209,939,738)
     (284,740,824)Acquisitionsof joint ventures, net of cash acquired
     5
     (19,912,162)
     -Loans to related companies
     
     (8,615,091)
     (27,298,838)Other investment disbursements
     
     (322,153,592)
     (23,575,554)Net Cash Flows provided by (used in) Financing Activities
     
     (1,308,405,991)
     (509,296,686)Loans obtained
     
     578,125,580
     1,091,907,129Proceeds from Issuance of other financial liabilities
     
     248,314,431
     332,343,788Proceeds from loans from related companies
     
     -
     412,223Revenue from other financing activities
     
     8,350
     470,255Payments of loans
     
     (807,135,975)
     (893,390,453)Repayments of other financial liabilities
     
     (476,215,561)
     (329,636,949)Repayments of liabilities for financial leases
     
     (3,171,884)
     (6,996,069)Payments of loans to related companies
     
     (16,986,597)
     (14,159,571)Payments of interest classified forfinancingpurposes
     
     (252,736,851)
     (230,036,860)Dividends paid to minority interests
     
     (356,030,235)
     (311,147,791)Dividends paid to shareholders of the company
     
     (222,577,249)
     (149,062,388)Net Increase (Decrease) in Cash and Cash Equivalents
     
     (137,342,876)
     694,799,386Effects of foreign exchange rate variations on cash and cash equivalents
     
     (45,818,266)
     34,385,512Beginning balance of cash and cash equivalents, statement of cash flows
     
     1,318,061,963
     588,877,065Ending balance of cash and cash equivalents, statement of cash flows
     5
     1,134,900,821
     1,318,061,963
   The accompanying notes are an integral part of these consolidated financial statements  F - 15


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ENersis S.A. and subsidiaries  Notes to the consolidated financial statements Index1.
     
     Financial statements and activities of the Group2.
     
     Basis of presentation of the consolidated financial statements2.1
     
     Basis of presentation2.2
     
     New accounting pronouncements2.3
     
     Responsibility for the information and use of estimates2.4
     
     Subsidiaries and jointly controlled entities2.4.1.
     
     Changes in the scope of consolidation2.4.2.
     
     Companies fully consolidated although the percentage of ownership is less than 50%2.4.3.
     
     Companies not fully consolidated although the percentage of ownership is more than 50%2.5
     
     Basis of consolidation and business combinations3.
     
     Accounting principles applieda)
     
     Property, plant and equipmentb)
     
     Investment propertiesc)
     
     Intangible assetsc.1)
     
     Goodwillc.2)
     
     Concessionsc.3)
     
     Research and development expensesc.4)
     
     Other intangible assetsd)
     
     Asset impairmente)
     
     Leasesf)
     
     Financial instrumentsf.1)
     
     Financial assets other than derivativesf.2)
     
     Cash and cash equivalentsf.3)
     
     Financial liabilities other than derivativesf.4)
     
     Derivative financial instruments and hedge accountingg)
     
     Investments in associates accounted for using the equity methodh)
     
     Inventoriesi)
     
     Non-current assets held for sale and discontinued operationsj)
     
     Treasury sharesk)
     
     Deferred revenuesl)
     
     Provisionsl.1)
     
     Provisions for post-employment benefit and similar obligationsm)
     
     Conversion of balance in foreign currencyn)
     
     Current/Non-current classificationo)
     
     Income taxp)
     
     Revenue and expense recognitionq)
     
     Earnings per sharer)
     
     Dividendss)
     
     Cash flow statement4.
     
     Sector regulation and electricity system operations4.1
     
     Generation4.2
     
     Distribution5.
     
     Cash and cash equivalents6.
     
     Trade accounts receivable and other receivables     F - 16


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7.
     
     Balances and transactions with related companies7.1
     
     Balances and transactions with related companies7.2
     
     Board of directors and key management personnel7.3
     
     Compensation of key management personnel7.4
     
     Compensation plans linked to share price8.
     
     Inventories9.
     
     Current tax receivables and payables10.
     
     Non-current assets and disposal groups held for sale11.
     
     Available-for-sale financial assets12.
     
     Other non-current financial assets13.
     
     Investments in associates accounted for using the equity method and jointly-controlled companies13.1
     
     Equity method accounted investments in associates13.2
     
     Jointly controlled companies14.
     
     Intangible assets14.1
     
     Intangible assets14.2
     
     Goodwill15.
     
     Property, plant and equipment, net16.
     
     Investment properties17.
     
     Deferred tax18.
     
     Interest-bearing loans19.
     
     Risk management policy19.1
     
     Interest rate risk19.2
     
     Exchange rate risk19.3
     
     Commodies risk19.4
     
     Liquidity risk19.5
     
     Credit risk19.6
     
     Risk measurement20.
     
     Financial instruments20.1
     
     Financial assets, classified by nature and category20.2
     
     Derivative instruments20.3
     
     Fair value hierarchies21.
     
     Trade accounts payable and other payables22.
     
     Provisions22.1
     
     Provisions22.2
     
     Lawsuits and arbitration proceedings23.
     
     Post-employment benefit obligations23.1
     
     General aspects23.2
     
     Details, movements and financial statement presentation23.3
     
     Other disclosures
    F - 17


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24.
     
     Deferred revenues25.
     
     Equity25.1
     
     Equity attributable to the Shareholders of the Company25.2
     
     Foreign currency translation25.3
     
     Capital management25.4
     
     Restrictions on the disposals of subsidiaries funds25.5
     
     Other reserves25.6
     
     Consolidated other comprehensive income25.7
     
     Equity attributable to minority interest26.
     
     Revenues27.
     
     Consumption of raw and secondary materials28.
     
     Employee expenses29.
     
     Depreciation, amortization and impairment losses30.
     
     Other miscellaneous operating expenses31.
     
     Financial costs32.
     
     Gain (loss) on derecognition of assets33.
     
     Gain (loss) from investments34.
     
     Income tax35.
     
     Segment information35.1
     
     Segmentation criteria35.2
     
     Generation, distribution and other35.3
     
     Countries35.4
     
     Generation and distribution by countries36.
     
     Guarantee commitments to third party, other contingent assets and liabilities, and other commitments36.1
     
     Direct guarantees36.2
     
     Indirect guarantees36.3
     
     Other information37.
     
     Personnel figures38.
     
     Subsequent events39.
     
     Environment40.
     
     Adoption of International Financial Reporting Standards41.
     
     Financial statements of principal subsidiariesAppendix No. 1 Enersis group companiesAppendix No. 2 Changes in the scope of consolidationAppendix No. 3 Enersis Group associated companiesSchedule I
 ****  F - 18


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ENersis s.a. AND SUBSIDIARIES  CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2009 (In thousands of Chilean pesos - ThCh$)
  1.FINANCIAL STATEMENTS AND ACTIVITIES OF THE GROUP  Enersis S.A. (hereinafter the Parent Company or the Company) and its subsidiaries form the Enersis Group (hereinafter, Enersis or the Group). Enersis S.A. is a publicly-traded corporation with registered address and head office located at Avenida Santa Rosa, N°76, Santiago, Chile. The Company was registered in the securities register of the Superintendency of Securities and Insurance of Chile (Superintendencia de Valores y Seguros or SVS), under number 175. In addition, the Company is registered with the Securities and Exchange Commission of the United States of America (hereinafter "U.S. SEC"),, and with Spains Comisión Nacional del Mercado de Valores. The Companys shares are listed in the New York Stock Exchange since 1993, and in Latibex since 2001. Enersis S.A. is a subsidiary of ENDESA, S.A., a Spanish entity controlled by Enel S.p.A. (hereinafter, Enel). Initially, the Company was formed with the corporate name of Compañía Chilena Metropolitana de Distribución Eléctrica S.A. back in 1981. Later on, changes were made to the by-laws, resulting in that the Company took up its current name of Enersis S.A. on August 1, 1988. The Companys corporate purpose consists in engaging, whether in Chile or abroad, in exploration, development, operation, generation, distribution, transmission, and transformation and/or sale of energy in any form or nature, either directly or through another company; and also performing telecommunication activities, and giving engineering advice in Chile or abroad. The Companys corporate purpose also includes investing in, and the management of investments made in, subsidiaries and associates that are generators, transmitters, distributors, or traders of electricity, or whose corporate purpose includes anyone of the following: (i) energy in any form or nature, (ii) supply of public services or of services whose main component is energy, (iii) telecommunications and computer services, and (iv) intermediation of businesses on the internet. The Companys consolidated financial statements for 2008 were approved by the Board of Directors at a meeting held on January 28, 2009. Then the consolidated financial statements were submitted to the consideration of a General Shareholders Meeting held on April 15, 2009, when the were finally approved. Those annual financial statements were prepared in accordance with accounting principles generally accepted in Chile and, therefore, they do not coincide with the amounts for 2008 included in these consolidated financial statements, which were prepared in accordance with International Financial Reporting Standards (IFRS). A detailed reconciliation of net equity, profit, and cash flows for the year, together with a description of the main adjustments to these financial statements presented in Note 40. These consolidated financial statements are presented in thousands of Chilean pesos (unless expressly stated otherwise), as the Chilean peso is the functional currency of the main economic environment in which the Company operates. Foreign operations are recorded, in accordance with the accounting policies set forth in notes 2.5 and 3m.   F - 19


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2.BASIS OF PRESENTATION OF THE CONSOLIDATED FINANCIAL STATEMENTS  2.1Basis of presentation The consolidated financial statements of Enersis and subsidiaries as of December 31, 2009 have been prepared in accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (hereinafter  IASB) and approved by its Board of Directors at its  meeting on January 27, 2010. These consolidated financial statements present fairly the financial position of Enersis and subsidiaries as of December 31, 2009, as well as the results of operations, the changes in equity and the cash flows for the year then ended. The present consolidated financial statements have been prepared from accounting records maintained by the Company and by its subsidiaries. Each entity prepares its financial statements according to the accounting principles and standards in force in each country,and through the consolidation process, the corresponding adjustments and reclassifications have been made in order to adapt such standards and principles to IFRS. The consolidated statement of financial position as of December 31, 2008, and January 1, 2008, as well as  the consolidated statement of comprehensive income, the consolidated statement of net equity, and the consolidated cash flow statement for the year ended December 31, 2008, included for comparative purposes, were also prepared in accordance with IFRS, on a basis consistent with that applied in 2009. 2.2New accounting pronouncements  As of the date of issuance of the present consolidated financial statements the following accounting pronouncements have been issued by the IASB but their application was not yet mandatory:  Standards and Amendments
     Mandatory Application for:IFRS 3 Revised:
Business Combinations.
     Annual periods beginning on or after July 1, 2009.Amendment to IAS 39:
Eligible hedged items.
     Annual periods beginning on or after July 1, 2009.Amendment to IAS 27:
Consolidated and separated financial statements.
     Annual periods beginning on or after July 1, 2009.Improvements to IFRS 2009
     Mostly annual periods beginning on or after July 1, 2009.Amendment to IFRS 2:
Group Cash-Settled Share-based Payments
     Annual periods beginning on or after January 1, 2010.Amendment to IAS 32:
Classification of Right Issues.
     Annual periods beginning on or after February 1, 2010.IFRS 9
Financial Instruments: Classification and Measurement
     Annual periods beginning on or after January 1, 2013.IAS 24 Revised
Related party disclosures
     Annual periods beginning on or after January 1, 2011.
  F - 20


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Interpretations and amendments
     Mandatory Application for:IFRIC 17
Distributions of Non-Cash Assets to Owners
     Annual periods beginning on or after July 1, 2009.IFRIC  19
Extinguishing Financial Liabilities with Equity Instruments
     Annual periods beginning on or after July 1, 2010.Amendment to  IFRIC  14:
Prepayments of a Minimum Funding Requirement
     Annual periods beginning on or after January 1, 2011.
  The Groups Management estimates that the adoption of the aforementioned Standards, Amendments, and Interpretations will not have a significant impact on the Groups consolidated financial statements in the period of their initial application.  2.3Responsibility for the information and use of estimates The information contained in these consolidated financial statements is the responsibility of the Companys Board, which expressly state that IFRS principles and standards -have been fully implemented. In preparing the consolidated financial statements, certain estimates made by the Companys Management have been used in order to quantify some of the assets, liabilities, income, expenses and commitments recorded in such statements. These estimates basically refer to: -The valuation of assets and goodwill to determine theexistenceof impairment losses (see Note 3.d).  -The assumptions used to calculate the actuarial liabilities and obligations to employees (see Note 23).  -The useful life of property, plant and equipment and intangible assets (see Notes 3.a and 3.c).  -The assumptions used to calculate the fair value of financial instruments (see Notes 3.f and 20).  -Energy supplied to customers and not invoiced at the end of each year.  -Certain magnitudes of the electricity system, including those to other companies, such as production, customer billings, energy consumption, etc. used on the estimations for electricity system settlements.  These settlements must be finalized in the corresponding final settlements, which are pending emission as of the date of issuance of the financial statements, and could affect the balances of assets, liabilities, income and expenses registered in such statements.  -The probability of the occurrence and the amount of liabilities which are uncertain as to their amount or contingent liabilities (see Note 3.l).  -The future facility closure and land restoration costs (see Note 3.a).  -The tax results of the various subsidiaries of Group, that will be reported to the respective tax authorities in the future, which have served as the basis for recording different balances related to income taxes in the current consolidated financial statements (See Note 3. o).   F - 21


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Although these estimates have been based on the best information available at the date of issuance of the current consolidated financial statements, it is possible that events may occur in the future that will require a change (increase or decrease) to these estimates in subsequent years, which would be done prospectively, recognizing the effects of such change in estimation in the corresponding future consolidated financial statements. 2.4Subsidiaries and jointly-controlled entities Subsidiaries are defined as entity in which the Parent Company controls the majority of the voting rights or, should that not be the case, is authorized to direct the financial and operating policies of such subsidiaries. Jointly-controlled entities are entities in which the situation described in the foregoing paragraph exists as a result of an agreement with other shareholders and control is exercised jointly with them. Appendix No. 1 of these consolidated financial statements, entitled Enersis Group Companies, describes Enersis relationshipwith each of its subsidiaries and jointly-controlled entities. 2.4.1Changes in the scope of consolidation On February 25, 2009, our subsidiary Compañía Distribuidora y Comercializadora de Energía S.A. (Codensa S.A.) made a capital contribution amounting to ThCh$23,744,357 in Distribuidora de Energía de Cundinamarca S.A. (DECA), that was used to subscribe and pay 489,997 shares, that represents a 48.997% of ownership interest in DECA.  The remaining 51.003% ownership interest in DECA was subscribed and paid by Empresa Eléctrica de Bogotá, a company that has entered into an agreement with our subsidiary Codensa S.A. for the joint control of DECA. Subsequently, on March 13, 2009, DECA acquired an 82.34% ownership interest inEmpresaEléctrica de Cundinamarca for ThCh$ 48,460,838. As a result of this acquisition DECA recognized a goodwill amounting to ThCh$14,457,069 (see Notes 5.c and 14.2). During the years 2009 and 2008 there were no other significant changes in Enersis Groups scope of consolidation. The section entitled Changes in Enersis Groups scope of consolidation, included as Appendix No. 2 to these consolidated financial statements, shows the companies incorporated on consolidation, together with a detail of the related ownership interest percentages. 2.4.2Companies fully consolidated although the percentage of ownership is less than 50% Although Enersis Group holds less than a 50% share in Codensa and in Empresa Generadora de Energía Eléctrica S.A. (Emgesa), they are deemed to be subsidiaries since the Group exercises control over the entity, directly or indirectly, through contracts or agreements with shareholders, or as a consequence of its structure, composition and shareholder classes. 2.4.3Companies not fully consolidated although the percentage of ownership is more than 50% Although Enersis Group holds more than 50% in Centrales Hidroeléctricas de Aysén, S.A. (hereinafter Hidroaysén), it is considered to be a jointly-controlled entity because the Group, through contracts and agreements with shareholders, exercises joint control of the entity. 2.5Basis of consolidation and business combinations Subsidiaries are consolidated by the global integration method, incorporating into the consolidated financial statements all assets, liabilities, income, expenses and cash flows after making the corresponding adjustments and eliminations for intra-Group transactions.  F - 22


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Jointly-controlled entities are consolidated by the proportional integration method. The Group recognizes, line by line, its share of the assets, liabilities, income and expenses of such entities, so that the aggregation of balances and subsequent eliminations, takes place only in the proportions of Group shares in them. The results of subsidiaries and jointly-controlled entities are included in the consolidated comprehensive income statement, from the effective date of acquisition until the effective date of disposal or termination of joint control, as appropriate. The consolidation of the operations of the Parent Company and its subsidiaries, as well as the jointly-controlled entities, was performed applying the following basic principles: 1.At the date of acquisition, the assets, liabilities and contingent liabilities of the subsidiary or jointly-controlled entity are recorded at market value. In the event that there is a positive difference between the acquisition cost and the fair value of the assets and liabilities of the acquired entity, including contingent liabilities, corresponding to the parents share, this difference is recorded as goodwill. In the event that the difference is negative, it is recorded with a credit to earnings.  2.The value of minority shareholder interest in equity and the results of subsidiaries consolidated through global integration are presented, respectively, under the headings Equity attributable to Minority Interest in the consolidated statement of financial position and Net Income attributable to minority interest and Other comprehensive income attributable to minority interest in the consolidated statement of comprehensive income.  3.The conversion of the financial statements of foreign companies with functional currencies other than the Chilean peso is performed as follows:  a.For assets and liabilities, the prevailing exchange rate on the closing date of the financial statements is used. b.For items in the comprehensive income statement, the average exchange rate for the year is used. c.Equity remains at the historical exchange rate from the date of acquisition or contribution, and for retained earnings at the average exchange rate at the date of generation.  Exchange differences that occur in the conversion of the financial statements are registered under the heading Translation reserves within Equity (see Note 25.2).  Translation adjustments incurred up to the date that the Group transitioned to IFRS have been transferred to reserves, using the exemption for that purpose in IFRS 1 First -time Adoption of IFRS (See Note 40). All balances and transactions between companies consolidated through global integration, as well as the share of the proportionally consolidated companies, were eliminated in the consolidation process.  F - 23


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3.ACCOUNTING PRINCIPLES APPLIED The main accounting policies used in preparing the accompanying consolidated financial statements were as follows: a)Property, plant and equipment Property, plant and equipment are valued at acquisition cost, net of accumulated depreciation and any impairment losses it may have experienced. In addition to the price paid to acquire  each item, the cost also includes, where appropriate, the following concepts: -Finance expenses accrued during the construction period that are directly attributable to the acquisition, construction or production of qualified assets, which require substantial period of time before being ready for use such as, for example, electricity generating or distribution facilities. The interest rate used is that of the specific financing or, if none exists, the mean financing rate of the company carrying out the investment. The mean financing rate depends principally on the geographic area and ranges between 2.66% to 12.6%. The amount capitalized for this concept amounted to ThCh$9,173,217 and ThCh$9,470,558 in 2009 and 2008, respectively.  -Employee expenses directly related to works in progress, capitalized for the years ended December 31, 2009 and 2008, amounted to  ThCh$16,723,291 and ThCh$18,611,427, respectively.  -Future disbursements that the Group must make to close their facilities are incorporated into the value of the asset at present value, recording the corresponding provision in accounting. On a yearly basis, the Group reviews their estimate of these future disbursements, increasing or decreasing the value of the asset based on the results of this estimate (see Note 22).  -Items acquired before the date on which the Groups transitioned to IFRS include within the acquisition cost, where appropriate, asset reappraisals permitted in various countries to adjust the value of the property, plant and equipment for  inflation as of that date. (See Note 15). Works in progress are transferred to operating assets once the testing period has been completed when they are available for use, at which time depreciation begins. Expansion, modernization or improvement costs that represent an increase in productivity, capacity or efficiency or a longer useful life are capitalized as a greater cost for the corresponding assets. The replacement or overhaul of whole components that increase the assets useful life, or its economic capacity, are recorded as an increase in value for the respective assets, derecognizing the replaced or overhauled components. Periodic maintenance, conservation and repair expenses are recorded directly in income as an expense for the year in which they are incurred. The company, based on the outcome of impairment testing explained in Note 3.d, believes that the book value of these assets does not exceed their net recoverable value. Property, plant and equipment, net of its residual value, are depreciated by distributing the cost of the different items that compose it on a straight-line basis over its estimated useful life, which is the period during which the companies expect to use them. Useful life estimates are periodically reviewed and, if appropriate, adjusted prospectively.  F - 24


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The following tables detail the principal useful lives used to depreciate assets: Years of estimated useful lifeGenerating facilities:Hydroelectric power plantsCivil engineering work
     35-65Electromechanical equipment
     10-40Coal-fired/fuel-oil power plants
     25-40Combined cycle plants
     10-25Renewable energy power plants
     35Transmission and distribution facilities:High-voltage network
     10-60Low- and medium-voltage network
     10-60Measuring and remote control equipment
     3-50Other facilities
     4-25
 In relation to the administrative concessions held by the Group companies, following is a detail of the years to maturity period for concessions that do not have an indefinite term: Company
     Country
     Concession term
     Period remaining until expirationEmpresa Distribuidora Sur S.A.Edesur (Distribution)
     Argentina
     95 years
     79 yearsHidroeléctrica El Chocón S.A. (Generation)
     Argentina
     30 years
     14 yearsTransportadora de Energía S.A. (Transmission)
     Argentina
     85 years
     79 yearsCompañía de Transmisión del Mercosur S.A. (Transmission)
     Argentina
     87 years
     79 yearsCentrais Eletricas Cachoeira Dourada S.A. (Generation)
     Brazil
     30 years
     19 yearsCentral Geradora Termeléctrica Fortaleza S.A (Generation)
     Brazil
     30 years
     23 yearsCompañía de Interconexión Energética S.A.Cien (Transmission, Line 1)
     Brazil
     20 years
     12 yearsCompañía de Interconexión Energética S.A.Cien (Transmission, Line 2)
     Brazil
     20 years
     14 years
   Management of the Group evaluated the specific casuistry of each of the aforementioned concessions, which vary by country, business or legal jurisprudence, and concluded that no determining factors exist to indicate that the grantor, which in each case is a government entity, controls the infrastructure and, at the same time, can continuously set the price to be charged for services. Those requirements are essential for applying IFRIC 12 Service Concession Arrangements, which establishes how to record and value certain types of concessions (See Note 3c.2 for concession arrangement within the scope of IFRIC 12). Gains or losses that arise from the sale or disposal of items of property, plant and equipment are recognized in income for the period and calculated as the difference between the sale value and the net book value.  F - 25


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b)Investment properties Investment properties include land and buildings held for the purpose to earn rentals and/or for capital appreciation. Investment property is measured initially at its cost. Subsequent to initial recognition, investment property is measured at cost less any accumulated depreciation and any accumulated impairment losses. Investment property, excluding land, is depreciated on a straight-line basis over the useful lives of the related assets. The fair value of the investment property is detailed in Note 16. c)Intangible assets c.1)Goodwill Goodwill generated upon consolidation represents the difference between the acquisition cost and the Group share of the fair value of assets and liabilities, including identifiable contingent assets and liabilities of a subsidiary as of the acquisition date. Acquired assets and liabilities are temporarily valued as of the date the company takes control and reviewed within no more than a year after the acquisition date. Until the fair value of assets and liabilities is ultimately determined, the difference between the acquisition price and the book value of the acquired company is temporarily recorded as goodwill. If goodwill is finally determined to exist in the financial statements the year following the acquisition, the prior year accounts presented for comparison purposes, are modified to include the value of acquired assets and liabilities and final goodwill from the acquisition date. Goodwillgeneratedfrom acquiring companies with functional currencies other than the Chilean peso is valued at the functional currency of theacquired companyandconvertedto Chilean pesosusingthe exchange rate in effect as of the date of the statement of financial position. Goodwill generated before the date of IFRS transition is maintained at its net value recorded as of that date, while goodwill originated afterwards is valued at acquisition cost(See Notes 14.2 and 40). Goodwill is not amortized, instead, at each period end, the Company estimates whether any impairment has reduced its recoverable value to an amount less than the net recorded cost and, if appropriate, immediately adjusts for impairment(see Note 3.d). In cases where the Group acquires an additional interest in a company that it already controlled and consolidated using the global integration method, the difference between the price of the additional percentage and the balance of "Equity attributable to minority interest that is derecognized as a result of the acquisition is recorded as goodwill. In cases where the Group sells part of its interest in a controlled company and maintains control after the sale and, therefore, continues to consolidate using the global integration method, the difference between the sale price and the balance of "Equity attributable to minority interest that must be recognized as a result of the sale is recorded in earnings for the year.  F - 26


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c.2)Concessions IFRIC 12 Service Concessions Arrangements'provides guidance for accounting operators for public-to-private concession arrangements. Thisaccountinginterpretation applies if:  a)The grantor controls or regulates which services the operator should provide with the infrastructure, to whom it must provide them and at what price; and  b)The grantor controls  through ownership, beneficial entitlement or otherwise  any significant residual interest in the infrastructure at the end of the term of the arrangement.  If theaforementioned criteriaare metsimultaneously, an intangible asset is recognized on books to the extent the operator is entitled to charge the users for thespecific use ofthe public service/facility, and if these charges are strictly based on the extent of use of the facility. These intangible assets are initially recognized at cost, which is defined as the fair value of the consideration paid, plus any other costs that are directly attributable to the operation. Subsequently, these intangibles are amortized over the period of the concession. The subsidiaries that have recognized an intangible asset from their service concession agreements are the following: Concession operator
     Type
     Country
     Term
     Remaining TermAmpla Energía e Serviços S.A.(*)
     Electrical energy distribution
     Brazil
     30 years
     17 yearsCompanhia Energética do Ceará S.A. (*)
     Brazil
     30 years
     19 yearsSociedad Concesionaria Túnel El Melón S.A
     Highway infrastructure
     Chile
     23 years
     7 years
  (*) Considering that part of the rights acquired by our subsidiaries are unconditional, a financial asset at amortized cost has also been recognized (See Notes 3.f.1 and 6).  -Borrowing costs incurred during the construction period that are directly attributable to the acquisition, construction or production of qualified assets, which are assets that necessarily take a substantial period of time to get ready for their intended use, such as electricity generating or distribution facilities are capitalized. The interest rate used is that corresponding to specific-purpose financing or, in the absence thereof, the average financing rate of the company making the investment. The average financing rate varies depending mainly on the geographical area and ranges between 11.5% to 12.5% for Ampla and 9.5% to 10.5% for Coelce.  Borrowing cost capitalized totaled ThCh$ 1,992,733 for the year ended December 31, 2009 and ThCh$ 2,648,915 for the year ended December 31, 2008.  -Cost of employees directly attributable to construction works in progress are also capitalized. Cost of employees capitalized totaled ThCh$ 17,007,228 for the year ended December 31, 2009 and ThCh$ 13,988,133 for the year ended December 31, 2008. c.3)Research and development expenses The Group follow the policy of recording as intangible asset in the statement of financial position, the cost incurred in developed projects as long as their technical viability and economic returns are reasonably assured. Expenditures on research activities are recognized as an expense in the period in which they are incurred. In 2009 and 2008 no research and development expenses were recognized.  F - 27


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c.4)Other intangible assets These intangible assets correspond primarily to computer software, easements, patents, trademarks, and water rights. They are initially recognized at acquisition or production cost and, subsequently, are valued at cost net of  accumulated amortization and any impairment losses, where appropriate, that may have occurred. This group of assets is amortized over its useful life, which in most cases is estimated at five years. Intangible assets with indefinite useful life are not amortized because such contracts are by nature permanent or indefinite. Criteria for recognizing impairment losses or, if appropriate, recoveries of impairment losses on these assets recorded in prior periods are explained in letter d) of this Note. d)Asset impairment During the period, and principally at period end, the Company evaluates whether there is any indication that an asset has been impaired. Should any such indication exist, the company estimates the recoverable amount of that asset to determine, where appropriate, the amount of impairment. In the case of identifiable assets that do not independently generate cash flows, the company estimates the recoverability of the Cash Generating Unit to which the asset belongs, which is understood to be the smallest identifiable group of assets that generates independent cash inflows. Notwithstanding the preceding paragraph, in the case of Cash Generating Units to which goodwill or intangible assets with an indefinite useful life have been allocated, a recoverability analysis is performed routinely at each period end. The recoverable amount is the greater between the fair value less the cost needed to sell and the value in use, which is defined as the present value of the estimated future cash flows. In order to calculate the recoverable value of property, plant and equipment, goodwill and intangible assets, value in use criteria is used by the Group in practically all cases. To estimate the value in use, the Group prepares future cash flow projections, before tax, based on the most recently available budgets. These budgets incorporate managements best estimates of revenue and costs of Cash Generating Units using sector projections, past experience and future expectations. These projections cover the next five years, estimating flows for subsequent years by applying reasonable growth rates between 3.7% and 8.3% that, in no case, are increasing nor exceed the average long-term growth rates for the particular sector and country. These flows are discounted at a given pre-tax rate in order to calculate their present value. This rate reflects the cost of capital of the business and the geographical area in which it is carried on. In order to calculate it, the current time value of money and the risk premiums generally used by analysts for the business and the geographical area are taken into account. The discount rates, before tax, expressed in nominal terms and applied in 2009 and 2008 are the following: Country
     Currency
     2009
     2008Minimum
     Maximum
     Minimum
     MaximumChile
     Chilean peso
     9.24%
     9.53%
     9.90%
     10.40%Argentina
     Argentinean peso
     19.51%
     17.40%Brazil
     Brazilian real
     11.32%
     12.10%Peru
     Peruvian nuevo sol
     9.09%
     10.00%Colombia
     Colombian peso
     11.45%
     11.90%
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If the recoverable amount is less than the net carrying amount of the asset, the corresponding provision for impairment loss is recorded for the difference, and charged to "Impairment losses" in the consolidated statement of comprehensive income. Impairment losses recognized for an asset in prior periods are reversed when its estimated recoverable amount changes, increasing the asset's value with a credit to earnings, limited to the assets carrying amount if no adjustment had occurred. In the case of goodwill, adjustments that would have been made are not reversible. The following procedure is used to determine the need to adjust financial assets for impairment: -In the case of commercial assets, the Group has defined a policy for recording impairment provision based on the age of past-due balance,which is generally appliedexcept in cases where a specific collectability analysis is advised (See Note 6).  -In the case of receivables of a financial nature, impairment is determined by specifically analyzing each case. As of the date of issuance of these consolidated financial statements, the Company had no significant past due non commercial financial assets.  e)Leases Leases that transfer substantially all the risks and rewards incidental to ownership are transferred to the lessee are classified as finance leases. All other leases are classified as operating leases. Finance leases in which the Group acts as a lessee are recognized when the agreement begins, , recording an assets based on the nature of the lease and a liabilities for the same amounts, equal to the lower of the fair value of the leased asset or the present value of the minimum lease payments. Subsequently, the minimum lease payments are divided between finance expense and reducing the debt. The finance expese is recorded in the income statement and distributed over the period of the lease term, so as to obtain a constant interest rate for each period over the balance of the debt pending amortization. The asset is amortized in the same terms as other similar depreciable assets, as long as there is reasonable certainty that the lessee will acquire ownership of the asset at the end of the lease. If no such certainty exists, the asset will be amortized over the lesser term between the useful life of the asset and the term of the lease. Operating lease payments are expensed on a straight-line basis over the term of the lease unless another type of systematic basis of distribution is deemed more representative. f)Financial instruments  Financial instrument are contracts that gives rise to both a financial asset for one company and a financial liability or equity instrument of another company. f.1)Financial assets other than derivatives The Group classify their financial investments, whether permanent or temporary, and excluding equity method investments (see Note13) and investments held for sale, into four categories: -       Trade accounts receivable and other receivables and Accounts receivable from related companies:These are recorded at amortized cost, which corresponds to initial fair value less principal repayments made, plus interest accrued but uncharged, calculated using the effective interest rate method.  F - 29


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The effective interest method is used to calculate the amortized cost of a financial asset or liability (or group of financial assets or financial liabilities) and is charged to financial income or expense over the relevant period.The effective interest rate is the discounts rate ethat sets the cash flows receivable or payable estimated over the expected life of thefinancial instrument (or, when appropriate, over a shorter period)exactly equalto the net carrying amount of the financial asset or financial liability. -       Held-to-maturity investments:Investments that Endesa Chile intends to hold and is capable of holding until their maturity are accounted for at amortized cost as defined in the preceding paragraph. -       Financial assets at fair value with changes in net income:This includes the trading portfolio and those financial assets that have been designated as such upon initial recognition and that are managed and evaluated using fair value criteria. They are valued in the consolidated statement of financial position at fair value, with changes in value recorded directly in income when they occur. -       Available-for-sale financial assets:These are financial assets specifically designated as available for sale or that do not fit within any of the three preceding categories and consist almost entirely of financial investments in equity instruments (See Note 11). These investments are recorded in the consolidated statement of financial position at fair value when it can be reliably determined. Changes in fair value, net of taxes, are recorded with a charge or credit to an equity reserve known as Available-for-sale reserves until the investment is disposed of, at which time the amount accumulated in this account for that investment is fully charged to the comprehensive income statement. Should the fair value be less than the acquisition cost, if there is objective evidence that the asset has been more than temporarily impaired, the difference is recorded directly in the comprehensive income statement. In the case of interests in unlisted companies or companies with very little liquidity, normally the market value cannot be reliably determined and, thus, when this occurs, they are valued at acquisition cost or a lesser amount if evidence of impairment exists. Purchases and sales of financial assets are accounted for using their trade date. f.2)Cash and cash equivalents This account within the statement of consolidated financial position includes cash on hand and in banks, time deposits and other highly-liquid, short-term investments that can be quickly converted to cash and have a low risk of value fluctuations. f.3)Financial liabilities other than derivatives Financial liabilities are generally recorded based on cash received, net of any costs incurred in the transaction. In subsequent periods, these obligations are valued at their amortized cost, using the effective interest rate method (see Note 3.f.1). In the particular case that a liability is the underlying item of a fair value hedge derivative, it will be exceptionally valued at its fair value for the portion of the hedged risk. In order to calculate the fair value of debt,both for the cases in which is recorded in the statement of financial position and for information on its fair value included in Note 20, debt has been divided into fixed interest rate debt (hereinafter fixed-rate debt) and variable interest rate debt (hereinafter floating-rate debt). Fixed-rate debt is that on which fixed-interest coupons established at the beginning of the transaction are paid explicitly or implicitly over its term. Floating-rate debt is that issued at a floating interest rate, i.e., each coupon is established at the beginning of each period based on the reference interest rate. All debt has been valued by discounting expected future cash flows with a market-interest rate curve based on the payments currency.  F - 30


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f.4)Derivative financial instruments and hedge accounting Derivatives held by the Group correspond primarily to transactions entered into to hedge interest and/or  exchange rate risk, intended toto eliminate or significantly reduce these risks in the underlying transactions being hedged. Derivatives are recorded at fair value as of the date of the statement of financial position within Hedging instrument. If their value is positive, they are recorded in assets and if their value is negative, they are recorded within liabilities. Changes in the fair value are recorded directly in income except when the derivative has been designated for accounting purposes as a hedge instrument and all of the conditions established under IFRS for applying hedge accounting are met, including that the hedge is highly effective, are met. In this case, changes are recorded as follows: -Fair value hedgesThe underlying portion for which the risk is being hedged is valued at its fair value as is the hedge instrument, recording any changes in the value of both in the comprehensive income statement by netting the effects in the same comprehensive income statement account. -Cash flow hedgesChanges in the fair value of the effective portion of derivatives are recorded in an equity reserve known as "Hedging Reserves". The cumulative loss or gain in this account is transferred to the comprehensive income statement to the extent that the underlying item impacts the comprehensive income statement because of the hedged risk, netting the effect in the same comprehensive income statement account. Gains or losses from the ineffective portion of the hedge are recorded directly in the comprehensive income statement. A hedge is considered highly effective when changes in the fair value or the cash flows of the underlying item directly attributable to the hedged risk, are offset by changes in the fair value or the cash flows of the hedging instrument, with effectiveness ranging from 80% to 125%. The Company does not apply hedge accounting to its investments abroad. As a general rule, long-term commodity purchase or sale agreements are recorded in the consolidated statement of financial position at their fair value as of period end, recording any differences in value directly in income, except when all of the following conditions are met: -The sole purpose of the agreement is for the own use.  -The Groups future projections justify the existence of these agreements with the purpose of own use.  -Past experience with agreements shows that they have been utilized for own use, except in certain isolated cases in which they had to be used for exceptional reasons or reasons associated with logistical management issues outside the control and projection of the Group.  -The agreement does not stipulate settlement by differences and the parties do not make it a practice to settle similar contracts by differences in the past. The long-term commodity purchase or sale agreements maintained by the Group, which are mainly for electricity, fuel and other supplies, meet the conditions described above. Thus, the purpose of fuelpurchase agreements is to be used to generate electricity, the electricity purchase contracts are used to materialize sales to end-customers and the electricity sale contracts are used to sell the companys own product. The Company also evaluates the existence of embedded derivatives in contracts or financial instruments to determine if their characteristics and risk are closely related to the principal contract as long as the set is not being accounted for at fair value. If they are not closely related, they are recorded separately and changes in value are accounted for directly in the comprehensive income statement.    F - 31


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The fair value of the various derivative financial instruments is determined using the following procedures: -For derivatives traded on active formal markets, by its quoted price as of year end. -Where such prices are not available, the Group calculates its fair value by performing discounted cash flows analysis using the applicable yield curve for the duration of the instruments, or by using generally accepted option pricing models, based on current and future market conditions at year end. g)Investments in associates accounted for using the equity method Investments in associates in which the Group has significant influence are recorded using the equity method. In general, significant influence is assumed in cases in which the Group has more than 20% interest. The equity method consists of recording the investment in the statement of financial position based on the share of its equity that the Group interest represents in its capital, adjusted for, if appropriate, the effect of transactions with subsidiaries plus any goodwill generated in acquiring the company. If the resulting amount were negative, zero is recorded for that investment in the statement of financial position, unless there is a commitment from the Group to support the companys negative equity situation, in which case a provision is recorded. Dividends received from these companies are deducted from the value of the investment and any profit or loss obtained from them to which the Group is entitled based on its interest is recorded within Share of the profit (loss) of associates accounted for using the equity method". Appendix 3 Enersis Group Associated Companies, included in these consolidated financial statements, provides information about Enersis' relation with each of its associates. h)Inventories Inventories are valued at the lesser of its weighted average acquisition price or its net realizable value. i)Non-current assets held for sale and discontinued operations The Group classifies as Non-Current Assets and Disposal Groups Held for Sale property, plant and equipment, intangible assets or investments under the heading Equity Method Accounted Investment in Associates if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the non-current assets or disposal groups are available for immediate sale in their present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification. Non-current assets and disposal groups classified as held for sale are measured at the lower of their previous carrying amount and fair value less costs to sell. Depreciation on such assets ceases from the time they are classified as held for sale. Non-current assets held for sale and the components of the disposal groups classified as held for sale are presented in the accompanying consolidated statement of financial position as a single line item within assets called Non-current assets and disposal groups held for sale and as a single line item within liabilities called "Liabilities included in disposal groups classified as held for sale".  F - 32


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The Group classifies as Discontinued operations that represents a separate major line of business or are part of a single coordinated plan to dispose of a separate major line of business that either has been disposed of, or are classified as held for sale, The Group also classified as Discontinued operations a subsidiary acquired exclusively with a view to resale. The components of profit or loss after taxes from discontinued operations are presented as a single line item in the consolidated comprehensive income statement as Profit (loss) from discontinued operations, net of tax. j)Treasury shares Treasury shares are deducted from Equity in the consolidated statement of financial position and valued at acquisition cost. Gains and losses obtained in disposing of the treasury shares are recorded within Retained Earnings in the consolidated statement of financial position. As of December 31, 2009, the Company has no treasury shares and had no transactions with treasury shares during the years 2009 and 2008. k)Deferred revenues This account primarily includes, contributions received from customers or government entities to finance construction or acquisition of certain facilities or, in some cases, facilities that are directly transferred based on current regulations in each country. These amounts are recorded as deferred revenues within liabilities in the consolidated statement of financial position and charged to earnings in the account "Other operating income" within the consolidated statement of comprehensive income over the useful life of the asset, thus offsetting the depreciation expense. The transactions that originated the amounts recorded in this account are not within the scope of IFRIC 18,Transfers of Assets from Customers, which was applicable starting on July 1, 2009.   l)Provisions Obligations existing as of the date of the consolidated financial statements resulting from past events for which equity damage for the Group is likely liable, whose amount and timing of payment are uncertain, are recorded as provisions in the consolidated statement of financial position at the present value of the most likely amount that it is believed that the Group will have to disburse to settle the obligation. Provisions are quantified using the best information available as of the date of issuance of the consolidated financial statements regarding the consequences of the event causing the provision and are re-estimated at each subsequent accounting close. l.1)Provisions for post-employment benefit and similar obligations Certain of the Group companies have pension and similar obligations to their employees. Such obligations, which combine defined benefits and defined contributions, are basically formalized through pension plans, except as regards certain non-monetary benefits, mainly electricity supply obligations, which, due to their nature, have not been externalized, and are covered by the related in-house provisions. For defined benefit plans, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at the end of each reporting period. Past service costs relating to changes in benefits are recognized immediately to the extent that the benefits are already vested, and otherwise are amortized on a straight-line basis over the average period until the benefits become vested.  F - 33


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The defined benefit plan obligations in the statement of financial position represent the present value of the defined benefit obligations as adjusted for unrecognized actuarial gains and losses and unrecognized past service costs, as reduced by the fair value of plan assets. For each of the plans, any positive difference between the actuarial liability for past services and the plan assets is recognized under line item "Post-employment benefit obligations" within non-current liabilities in the consolidated statement of financial position and any negative difference is recognized under line item Other Financial Assets within non-current assets in the consolidated statement of financial position, provided that such negative difference is recoverable by the Group, usually through a reduction in future contributions. Contributions to defined contribution benefit plans are recognized as an expense in the consolidated statement of comprehensive income when the employees have rendered their services. The actuarial gains and losses arising in the measurement of both the plan liabilities and the plan assets are recognized directly under Equity  Retained earnings. m)Conversion of balances in foreign currency Transactions carried out by each company in a currency other than its functional currency are recorded using the exchange rates in effect as of the date of each transaction. During the year, any differences that arise between the exchange rate recorded in accounting and the rate prevailing as of the date of collection or payment are recorded as Foreign currency exchange differences, net" in the comprehensive income statement. Likewise, as of each year end, balances receivable or payable in a currency other than each company's functional currency are converted using the period-end exchange rate. Any valuation differences are recorded as Foreign currency exchange differences, net" in the comprehensive income statement. The Group has established a policy to hedge the portion of its revenue that is directly linked to the US dollar by obtaining financing in this currency. Exchange differences related to this debt, as they are cash flow hedge transactions, are charged, net of taxes, to a reserve account in equity and recorded in income during the period in which the hedged cash flows are realized. This term has been estimated at ten years. n)Current/Non-Current Classification In the accompanying consolidated statement of financial position, assets and liabilities expected to be recovered or settled within twelve months are presented as current items and those assets and liabilities expected to be recovered or settled in more than twelve months are presented as non-current items. Should the Company have any obligations that mature in less than twelve months but can be refinanced over the long term at the Company's discretion, through unconditionally available credit agreements with long-term maturities, such obligations may be classified as long-term liabilities. o)Income tax Income taxes for the year are determined as the sum of current taxes from the Group numerous subsidiaries and result from applying the tax rate to the taxable base for the year, after allowable deductions have been made, plus any changes in deferred tax assets and liabilities and tax credits, both for tax losses and deductions. Differences between the book value and tax basis of assets and liabilities generate deferred tax asset and liability balances, which are calculated using tax rates expected to be in effect when the assets and liabilities are realized.  F - 34


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Current taxes and changes in deferred tax assets and liabilities that are not coming from business combinations are recorded in income or in equity accounts in the statement of financial position, based on where the gains or losses originating them were recorded. Any fluctuations from business combinations that are not recorded upon taking control because their recovery is not assured are recognized by reductions, if appropriate, to the value of goodwill accounted for in the business combination. Deferred tax assets and tax credits are recognized only when it is likely that there will be future tax gains sufficient enough to recover deductions for temporary differences and make use of tax losses. Deferred tax liabilities are recognized for all temporary differences, except those derived from the initial recognition of goodwill and those that arose from valuing investments in subsidiaries, associates and jointly-controlled companies in which The Group can control their reversal and where it is likely that they will not be reversed in the foreseeable future. Any deductions that can be applied at a given moment to current tax liabilities are credited to earnings within the income tax account, except when doubts exist about their tax realization, in which case they are not recognized until they are effectively realized, or when they correspond to specific tax incentives, in which case they are recorded as grants. At each accounting period close, the Company reviews the deferred taxes it has recorded, both assets and liabilities, in order to ensure they remain current and otherwise make any necessary corrections based on the results of this analysis. p)Revenue and expense recognition Revenue and expense are recognized on an accrual basis. Revenue is recognized when the gross inflow of economic benefits arising in the course of the Groups ordinary activities in the year occurs, provided that this inflow of economic benefits results in an increase in equity that is not related to contributions from equity participants and that these benefits can be measured reliably. Revenue is measured at the fair value of the consideration received or receivable arising therefrom. Revenue associated with the rendering of services is only recognized if it can be estimated reliably, by reference to the stage of completion of the transaction at the date of the statement of financial position. The Group excludes from the revenue figure gross inflows of economic benefits received by it when it acts as an agent or commission agent on behalf of third parties, and only recognizes as revenue economic benefits received for its own account. When goods or services are exchanged or swapped for goods or services which are of a similar nature, the exchange is not regarded as a transaction which generates revenue. The Group records for the net amount non-financial asset purchase or sale contracts settled for the net amount of cash or through some other financial instruments. Contracts entered into and maintained for the purpose of receiving or delivering these non-financial assets are recognized on the basis of the contractual terms of the purchase, sale or usage requirements expected by the entity. Interest income is recognized by reference to the effective interest rate applicable to the principal outstanding over the related repayment period.  F - 35


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q)Earnings per share Basic earnings per share are calculated by dividing profit or loss  attributable to equity holders of the Parent (the numerator) by the weighted average number of ordinary shares outstanding (the denominator) during the year, excluding, if any, the average number of shares of the Parent held by the Group. During 2009 and 2008, the Group did not perform any transactions of any kind that have dilutive potential effect leading to diluted earnings per share that could differ from the basic earnings per share. r)Dividends Article No. 79 of Chiles Corporations Law establishes that, except if unanimously agreed otherwise by shareholders of all issued shares, listed corporations should distribute a cash dividend to its shareholders on a yearly basis, prorated based on their shares or the proportion established in the company's by-laws if there are preferred shares, of at least 30% of net income for each period, except when accumulated losses from prior years must be absorbed. As it is practically impossible to achieve a unanimous agreement given Enersis highly fragmented share capital, as of the end of each year the amount of the obligation to its shareholders, net of interim dividends approved during the year, is determined and accounted for in "Trade accounts payable and other payables" or " Accounts payable to related companies ", as appropriate, and charged to equity in the account Proposed dividend reserves. Interim and final dividends are deducted from equity as soon as they are approved by the competent body, which in the first case is normally the Companys Board of Directors and in the second case is shareholders at the Ordinary Shareholders Meeting. s)Cash flow statement The cash flow statement reflects the changes in cash that took place in the year in relation to both continuing and discontinued operations, calculated using the indirect method. The following terms are used in the consolidated cash flow statements: -Cash flows:inflows and outflows of cash or cash equivalents, which are defined as highly-liquid investments maturing in less than three months with a low risk of changes in value.  -Operating activitiesare the principal revenue-producing activities of the Group and other activities that are not investing or financing activities.  -Investing activitiesarethe acquisition and disposal of long-term assets and other investments not included in cash and cash equivalents.  -Financing activitiesareactivities that result in changes in the size and composition of the contributed equity and borrowings of the Group.   F - 36


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4.SECTOR REGULATION AND ELECTRICITY SYSTEM OPERATIONS  There are different regulations in the Latin American countries in which the Group operates. We discuss below the main characteristics of each business.  4.1Generation: **** Chile  In Chile the electricity sector is regulated by the General Law of Electrical Services (Chilean Electricity Law), also known as DFL No. 1 of 1982, of the Ministry for Mining whose compiled and coordinated text was established by DFL No. 4 issued in 2006 by the Ministry for Economy as well as by an associated Regulation (D.S. No. 327 issued in 1998). Three government bodies are primarily responsible for enforcing this law: The National Energy Commission (CNE), which has the authority for proposing regulated tariffs (node prices), which require the final approval of the Ministry of Economy and prepares the indicative plan, a ten-year guide for the expansion of the system that must be consistent with the calculated node prices; the Superintendency of Electricity and Fuels (hereinafter, SEF), sets and enforces the technical standards of the system and the proper compliance with the law.; and, the recently created Ministry for Energy, which will be responsible for proposing and guiding public policies on energy matters, and it combines together the SEF, the NCE and the Chilean Commission for Nuclear Energy (ChCNE), thus strengthening coordination and allowing an integrated view of the energy sector. The Ministry of Energy also includes an Agency for Energy Efficiency and a Center for Renewable Energy.  The Chilean Electricity Law has established a so called Experts Panel whose main task is to resolve potential discrepancies among electricity companies.  The Chilean electrical sector is divided into four interconnected electrical systems: theSistema Interconectado Central(hereinafter, SIC),theSistema Interconectado del Norte Grande(hereinafter, SING), and two separate medium-size systems located in southern Chile, one in Aysén and the other in Magallanes. The SIC is the main electrical system covering 2,400 km, connecting Taltal in the northern part with Quellon, on the island of Chiloe, in the southern part of the country . The SING covers the far northern part of the country, from Arica down to Coloso, covering approximately 700 km.  The electrical industry is divided into three business segments, Generation, Transmission, and Distribution, operating in an interconnected and coordinated manner, and whose main purpose is to supply electrical energy to the market at minimum cost while maintaining quality and safety service standards required by the electrical regulations. Given their characteristics, Transmission and Distribution businesses are natural monopolies, and are segments regulated as such by the electrical law, requiring free access to networks and establishing regulated tariffs.  Under the Chilean Electricity Law, companies engaged in Generation and Transmission on an interconnected electrical system must coordinate their operations in a centralized manner through theCentro de Despacho Económico de Carga(CDEC) in order to operate the system at minimum cost while maintaining service safety. For this reason, the CDEC plans and operates the system, including the calculation of the so called marginal cost, which is the price at which energy transfers among generators performed through the CDEC are valued.  Therefore, each companys decision to generate electricity is subject to CDECs operation plan. On the other hand, each company is free to decide whether to sell its energy to regulated or unregulated customers. Any surplus or deficit between sales to customers and energy supply, is sold to, or purchased from, other generators at the marginal cost.  An electricity generator company may have the following types of clients:  (i)Regulated customers: Corresponds to those residential and commercial consumers and small and medium size businesses with a connected maximum capacity equal to, or less than, 2,000 KW that are located in the concession area of a distributor company. Until 2009, the transfer prices between generators and distributors companies were capped at a maximum value called node price, which is regulated by the Ministry of Economy. Node prices are determined every six months, in April and October, based on a report prepared by the CNE that takes into account projections of expected marginal costs in the system over the next 48 months for the SIC and 24 months for the SING. Beginning on 2010, the transfer prices between generators and distributors will be established in bidding processes carried out by these companies.    F - 37


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(ii)Unregulated customers: Corresponds to those customers, mainly industrial and mining companies, with a connected maximum capacity over 2,000 KW. These consumers can freely negotiate prices for electrical supply with generators and/or distributors. Customers with capacity between 500 and 2,000 KW have the option of contracting energy at prices agreed upon with their suppliers or choosing to be subject to regulated prices, either they must stay at least four years in each price regime.  (iii)Spot market: Represents the energy and capacity transactions among generators that result from the CDEC coordination intended to the economic operation of the system, where the excess (surpluses/deficits) between the energy supply and the energy to comply with business commitments are transferred through sale (purchase) to the other generators in the CDEC. In the case of energy, transfers are valued at the marginal cost; in the case of capacity, at the node prices.  In Chile, the capacity that must be remunerated to each generator depends on an annual calculation performed by the CDEC, which yields the final capacity of each power plant, which is independent from the dispatched capacity.  Beginning on 2010 with the enactment of Law 20,018 distributor companies must have permanently available supply to cover their entire demand, as such they have to undertake long-term public bids.  In regards of renewable energies, in April of 2008 it was enacted Law No. 20,257 which encourages the use of Non-Conventional Renewable Energies (ERNC). The main aspect of the law is requiring generators to provide, between 2010 and 2014, at least 5% of their energy from renewable sources, and progressively increasing in a 0.5% from 2015 until 2024, where 10% would be reached.   Brazil, Argentina, Peru and Colombia  In the other Latin American countries where the Group operates, different regulations are enforced. In general, regulations in Brazil, Argentina, Peru and Colombia allow participation of private capital in the electricity sector, uphold free competition in electricity generation, and define criteria to avoid that certain levels of economic concentration and/or market practices may cause a decline in this activity. Unlike Chile, government companies participate in the electricity sector together with private capital in the electricity generation, transmission and distribution activities.  The participation of companies in different activities (generation, distribution, and commercial), is allowed, as long as these activities are properly separated, both from an accounting and corporate point of view. Nevertheless, the transmission sector is where the strictest restrictions are usually imposed, mainly due to its nature and the need to assure adequate access to all players.  In regards to the main characteristics of the electricity generation business, one can indicate that in general these are open markets in which private players are free to make their own investment decisions. The exception is Brazil, a country which, based on the contractual needs of the distribution companies, the Ministry of Energy actively participates in the electrical systems expansion by establishing capacity quotas by technology (separate bids for thermal, hydraulic, or renewable energies) or participates directly by organizing public bids for specific projects.  The operation is coordinated in a centralized manner in which an independent operator coordinates the dispatch of electrical charges, except for Colombia, where charge dispatched is based on prices offered by the players, in the other countries charge dispatch is centralized, based on variable production costs, seeking to assure the fulfillment of the demand at a minimum cost for the system. On the basis of such charge dispatch, the marginal cost, which defines the price for spot transactions.    F - 38


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Nevertheless, it should be pointed out that currently Argentina and Peru intervene to some extent in the formation of price in these marginal generation markets. This occurs in Argentina after the 2002 crisis, and in Peru as a result of a recent Emergency Law enacted in 2008 that defines a marginal idealized cost, considering that no actual restrictions exist on the transportation system for gas and electricity.  In these four countries generation players are able to sell energy through contracts in the regulated market or in the unregulated market, and trade their surplus/deficit on the spot market. The unregulated market is focused on the segment of large users, although the limits that define such a status vary in each market. The principal differences among the markets involve the way of regulating the sale of energy among generators and distributors and how regulated prices are established for the determination of the tariffs charged to end users.  Initially, Argentine law contemplated that the selling price charged by generators to distributors would have to be obtained from a centralized calculation of the average spot price expected for the next six months. However, after the 2002 crisis, Argentine authorities have established the price arbitrarily, forcing intervention in the marginal system and provoking a mismatch between actual generation costs and payment of the demand through distributors.  In Brazil, the regulated purchase price used in the determination of tariffs to end users is based on average prices of open bids, and there are separate bidding processes for existing and new energy. Bidding processes for new energy contemplate long-term generation contracts in which new generation projects must cover the growth of demand foreseen by distributors. The open bids for existing energy consider shorter contractual terms and seek to cover the distributors contractual needs arising from the expiry of prior contracts. Each bidding process is coordinated centrally. Authorities define maximum prices and, as a result, contracts are signed where all distributors participating in the process buy pro rata from each offering generator.  In Colombia distributors are free to decide their supply, being able to define the conditions of public bidding processes where they acquire energy for the regulated market. And they are able to buy energy in the spot market. Prices paid by end users reflect an average of the purchase price.  In Peru, just like in Chile, distributors are obligated to enter into contracts, and the legislation was amended so that the public bids for energy would be based on distributor requirements. At present, contracts between generators and distributors are in force at bar price, which is defined on the basis of a centralized calculation. Nevertheless, since 2007 contracts are based on public bids. Authorities approve bidding bases and define the maximum price for each bid.  With the exception of Colombia, in all the other countries there is some statute in force that promotes use of renewable energy. In practical terms, there are no incentives or obligations as those in Chile that would push these renewable energy technologies to be competitive on a greater scale. Authorities are responsible for promoting specific bidding processes benefiting from special conditions in order to make these projects viable.   F - 39


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4.2Distribution: **** In the five countries where the Group operates, selling prices charged to clients are based on the purchase price paid to generators plus a component associated with the value added in distribution. Regulators set this value periodically through reviews of distribution tariffs. As a result, distribution is an essentially regulated activity.  Chile  The electricity distribution business in which the Company operates is governed by concession contracts that set aside a strict zone in which energy supply services can be provided. This enables the operating companies to develop their distribution business on a platform of tariff regulated by the authorities and in accordance with applicable laws.  Tariff-setting processes and regulatory issues  Establishing distribution tariff:In March of 2008, holders of distribution concessions delivered to the Superintendence for Electricity and Fuel (SEF) information on operating costs for 2007 in order for the SEF to establish the distribution added value (DAV), which is statutorily required to be estimated every four years. However, in September 29, 2008, Chilectra submitted to the experts panel objections as to how operating costs were established for 2007 by the SEF with respect to the acquisition of energy from the distribution point, which costs in the judgment of Chilectra were understated. On October 22, 2008, the experts panel issued a decision favorable to Chilectra.  In April of 2008, the Chilean National Commission for Energy (NCE) issued the final technical bases together with a classification of typical distribution areas for DAV studies. Chilectra was the only concession holding company classified at Typical Area 1. In May of 2008, the studies were started with the delivery of the first report requested by the NCE, and on September 3, 2008 Chilectra submitted its study.  On April 8, 2009, the Ministry for Economy, Development and Reconstruction published Decree 385, which sets forth tariff-setting formulae applicable to supply subject to regulated prices described in this statute done by distribution concession-holding companies indicated therein. The tariffs to which Decree 385 was applicable have retroactive effect as from November 4, 2008 backwards. The Decrees impact on tariffs charged to residential customers was equivalent to a drop of approximately 2.4% in billing.  Establishing Tariffs for Associated Services:In 2008, in connection with the process for establishing distribution tariff, a part of the process for establishing tariff for services associated with supply of distribution electricity was completed. On December 29, 2008, the studies prepared by the consultant working with the NCE were published on the NCE web page for companies to comply with them. In fact, on January 13, 2009, Chilectra issued its main observations, whereas the CNE published the relevant technical report on March 2, 2009, which was amended and published on April 3, 2009. On April 7, 2009, the companies submitted objections to the technical report with an experts panel, which passed down a ruling on May 25, 2009. On the basis of this ruling, the NCE prepared the decree establishing prices for associated services and that later on the Ministry of Economy sent to the Controllership Office for final review. As a result of several filings made with the Controllership Office motivated by the fact that the decree had retroactive effect, the Ministry of Economy withdrew the decree from the Controllership Office in order to amend it.  On December 4, 2009 the Ministry of Economy, Development and Reconstruction published in the Official Gazette decree No. 197/2009, which establishes prices for services associated with electricity distribution, but not consisting in energy supply, which are effective beginning on the date the decree was published in the Official Gazette. The decrees economic effect is that it slashes revenue by approximately Ch$3,000 million for 2009.  Establishing the annual value of Sub-transmission Systems:Law No. 19,940 of the Ministry of Economy, Development and Reconstruction published in the Official Gazette on March 13, 2004 introduced a tariff-setting process which establishes the annual value of sub-transmission systems every four years.   F - 40


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In this regard, the first tariff-setting process began in 2005 and on January 9, 2009 decree No. 320 from the Ministry of Economy, Development and Reconstruction was published in the Official Gazette which establishes tariff for sub-transmission and their associated indexation formulae. The decree is effective beginning on January 14, 2009 and it is believed that its effect will be a fall in income before taxes of Ch$52,000 million a year if current market conditions remain as well as the criteria for retribution established for this business activity.  On August 4, 2009, decree No. 144/2009 was published in the Official Gazette which approves the regulation that sets forth the procedure for carrying out studies for determining the annual value of sub-transmission systems.  Through resolution No. 650 issued on July 2, 2009 the NCE started the process for establishing the annual value of sub-transmission systems for the 4-year period 2011-2014 by establishing the terms and conditions to form the Register of Users and Institutions interested in this process.  On November 9, 2009 the NCE sent to the companies the “Final Bases for Studies to Determine the Annual Value of Sub-transmission Systems in the 4-year period 2011-2014”. Companies filed objections with respect to this with the experts panel on November 23, 2009. The objections were settled by ruling 15/2009 dated December 15, 2009. In particular, the experts panel issued a resolution favorable to the objections submitted by Chilectra.  Establishing the Annual Value of Main Transmission Systems:On October 13, 2009 NCE published the “Final Technical and Administrative Bases for Performing Main Transmission Studies”.  On December 2, 2009 the NCE published the final version of the “Final Technical and Administrative Bases for Performing Main Transmission Studies” after the resolution of the experts panel concerning the objections submitted on October 29, 2009.  As of this date, the Main Transmission Study is at a stage where bids are invited.  Main Transmission System Charges:Process for determining the so-called single charge for main transmission costs. In this regard, in January 2008, decree No. 207/2007 was published in the Official Gazette which establishes main system installations, the common influence area, the annual value of transmission by stretch and its components, and indexation formulae for the 4-year period 2007-2010. This decree orders also that the Economic Center for Charge Dispatch should calculate the main unit charge value that has retroactive effect as of March 13, 2004.  In June of 2009 the NCE published a decree that establishes Node Price No. 125 and which defines the single charge for main transmission in each electrical system, setting the value of 0.625 Ch$/kWh for the central interconnected system for clients who have connected wattage lower than, or equal to, 2MW. This charge is effective beginning on May 1, 2009.  In January of 2010 the NCE published a decree that establishes Node Price No. 281 and which defines the single charge for main transmission in each electrical system, setting the value of 0.754 Ch$/kWh for the central interconnected system for clients who have connected wattage lower than, or equal to, 2MW. This charge is effective beginning on November 1, 2009.  Node Price:On June 16, 2009 decree No. 125 of the Ministry of Economy, Development and Reconstruction was published that sets node prices and has retroactive application beginning on May 1, 2009.  On October 16, 2009 the NCE issued resolution No. 1063 setting new node prices for the Central Interconnected System, because as of October 1, 2009 it verified that the energy node price at the Central Interconnected System had reached a decreasing accumulated variation greater than 10%. The new tariff are in force as of October 16, 2009.   F - 41


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On January 4, 2010 decree No. 281 of the Ministry of Economy, Development and Reconstruction was published that sets node prices and has retroactive application beginning on November 1, 2009.   Ministry of Energy:  On December 3, 2009, Law No. 20,402 was published in the Official Gazette. This law creates the Ministry of Energy and introduced amendments to Law No. 2,224 of 1978 and to other statutes.  This law became effective as of the first day of the month following the one in which it was published, except for the provisions contained in the transitory articles of the law, which are effective as of the date of publication.  Law No. 20,402 restructures the public sector as regards energy and groups together typical functions associated with energy, ending the current dispersal of functions, and ending the dependence on the National Commission for Energy, the Superintendence for Electricity and Fuel, and the Chilean Commission for Nuclear Energy, all of which will have to communicate now with the executive power through the Ministry of Energy. In addition to the new Ministry of Energy, the future Chilean Agency for Energy Efficiency was created, which will take its place alongside the already existing Center for Renewable Energies.  Regarding the functions of the New Ministry of Energy, this ministry will take over some of the tasks that now a days are performed by the ministries of mining and economy, such as determining the parity prices contained in the funds for stabilizing the prices of oil, and the entering into Special Contracts for the Operation of Hydrocarbons, as well as taking over the competences that the Ministry of Economy had been assigned as regards gas and electricity (final concessions; transmission systems; operation and supply of electrical services; and issuance of regulations), among others.  On the other hand, the Ministry of Energy is statutorily required to promote the use of unconventional renewable energies, energy efficiency, sustainable development, and the protection of the environment, as well as policies contemplating social and rural energization, among other things.  The law in question created for the Ministry of Energy the power to establish minimum standards of energy efficiency, prohibit the sale of inefficient products, and determine what products must obtain an energy efficiency certificate. At the same time, the Ministry of Energy will have a mandate to request information, relevant to its tasks, from public bodies, companies and legal entities operating in the energy sector, and from users not subject to price regulation.   Rest of Latin America  In Peru, the VAD is calculated every 4 years, also using the model company method based on a typical area.  During 2009 the VAD process was performed to determine the tariff of the next 2009-2013 period.  In Brazil there are three types of tariff adjustments:  (i)Ordinary Tariff Reviews (RTO) which are conducted in accordance with the provisions in the concession contracts (in Coelce every 4 years and in Ampla every 5 years).  (ii)Annual adjustment (IRT); and  (iii)Extraordinary Reviews.  In the case of the Group companies, the latest RTO occurred in 2007 for Coelce and in 2009 for Ampla.  In Colombia, the Comisión de Regulación de Energía y Gas (CREG) established in 2008 a new methodology for calculating the return rate applicable to the compensation of the distribution, and a new methodology for establishing the charges for use of regional transmission and local distribution systems. In October of 2009 the CREG published the distribution charges for Codensa for the period 2009-2013.   F - 42


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In Argentina, the tariffs were frozen since the countrys default on payments in 2001. Edesurs tariff restructuring begins with the enforcement of the acta acuerdo in 2007. Begining in that year, tariff adjustments (positive effect on distribution added value, VAD) and inflation adjustments (cost monitoring mechanism, CMM) have been made. However, an Overall Tariff Review (RTI) is yet to be performed on Edesurs concession contract.  In all the countries a distinction can be drawn between customers supplied energy under regulated conditions, and customers supplied energy under freely negotiated conditions. In each country the limits up to which energy supply can be negotiated freely are as follows:  Country
     Minimum MWArgentina
     0.03Brazil
     3.0Chile
     0.5Colombia
     0.1Peru
     1.0
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5.Cash and cash equivalents  a)The detail of cash and cash equivalents as of December 31, 2009, December 31, 2008, and January 1, 2008 is as follows:  Cash and Cash Equivalents
     Balance at12-31-2009
     12-31-2008
     01-01-2008ThCh$
     ThCh$
     ThCh$Cash on Hand
     2,033,228
     3,141,353
     384,290Bank balances
     280,296,850
     186,008,671
     124,440,931Time Deposits
     631,827,134
     671,273,838
     361,385,113Other fixed-income investments
     220,743,609
     457,638,101
     102,666,731Total
     1,134,900,821
     1,318,061,963
     588,877,065
  Time deposits has a maturity of three months or less from their date of acquisition and earn the market interest for this type of investments. The other short-term investments debt securities mainly comprise of resale agreements with maturity of 30 days or less. There are no amounts of cash and cash equivalents balances held by the Group that are not available for its use.   b)The detail of cash and cash equivalents by type of currency is as follows:  Currency
     12-31-2009
     12-31-2008
     01-01-2008ThCh$
     ThCh$
     ThCh$Chilean peso
     171,799,777
     462,051,927
     93,419,235Argentine peso
     28,624,735
     34,431,374
     19,238,111Colombian peso
     395,598,094
     237,747,307
     96,263,946Brazilian Real
     370,793,677
     318,762,025
     291,404,234Peruvian Soles
     21,485,345
     17,347,852
     7,937,931U.S. dollar
     146,599,193
     247,721,478
     80,613,608Total
     1,134,900,821
     1,318,061,963
     588,877,065
   c)The following table set forth the amounts paid for the acquisition of associates and other entities, during 2009 and 2008:  Acquisitions of Associates and Other Entities
     12-31-2009
     12-31-2008ThCh$
     ThCh$Amounts Paid for Acquisitions in Cash and Cash Equivalents
     (23,744,357)
     -Amount of Cash and Cash Equivalents in Entities Acquired
     3,832,195
     -Assets and Liabilities Other than Cash or Cash Equivalents in Entities Acquired
     12,828,632
     -Total Purchase Consideration Paid to Acquired Entities, Net (*)
     (7,083,530)
     -
  (*) Corresponds to a 48.997% of goodwill recognized by DECA in the acquisition of Empresa Eléctrica de Cundinamarca. As DECA is a jointly controlled entity (See Notes 2.5), is reported by our subsidiary Condesa S.A. using proportionate consolidation (See Notes 2.4.1 and 14.2).    F - 44


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6.TRADE ACCOUNTS RECEIVABLE ANDOTHERRECEIVABLES  The detail of trade and other receivables as of December 31, 2009, December 31, 2008, and January 1, 2008, is as follows:  Trade accounts receivable and other receivables, gross
     Balance at12-31-2009
     12-31-2008
     01-01-2008Current
     Non-Current
     Current
     Non-Current
     Current
     Non-CurrentThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$Trade and Other Receivables, Gross
     1,312,802,776
     198,609,866
     1,476,578,040
     319,283,809
     1,324,272,232
     268,370,611Trade Receivables, Gross
     1,266,953,322
     128,738,890
     1,404,510,966
     177,333,954
     1,179,047,485
     84,595,808Other Receivables, Gross
     45,849,454
     69,870,976
     72,067,074
     141,949,855
     145,224,747
     183,774,803Trade accounts receivable and other receivables, net
     Balance at12-31-2009
     12-31-2008
     01-01-2008Current
     Non-Current
     Current
     Non-Current
     Current
     Non-CurrentThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$Trade and Other Receivables, Net
     1,138,646,562
     194,977,413
     1,313,066,854
     319,283,809
     1,159,930,650
     253,273,272Trade Receivables, Net (1)
     1,097,562,493
     126,907,444
     1,242,285,448
     176,469,559
     1,020,713,162
     70,043,630Other Receivables, Net (2)
     41,084,069
     68,069,969
     70,781,406
     142,814,250
     139,217,488
     183,229,642
  (1)Includes Ch$69,092 million corresponding to accounts due to our subsidiary Cachoeira Dourada S.A. from Compañía de Electricidade de Goiás (CELG), arising in years prior to 2004. CELG (a state-owned Company of the State of Goiás) has currently recognized its outstanding debt and is negotiating a loan from the financial institution BNDES to obtain the proceeds to pay its debt. The Board of Directors of Enersis anticipates a favorable outcome as a result of such negotiations and expects to recover at least the carrying amount recognized.  (2)The non-current portion includes the financial asset classified as loans and receivables measured at amortized cost arising from application of the requirements of IFRIC 12,Service Concession Arrangementtotaled ThCh$34,203,618, ThCh$23,553,568 and ThCh$20,867,696 as of December 31, 2009 and 2008, and January 1, 2008, respectively.  In general, no interest is charged on trade and other receivables.  There are no amounts trade and other receivables balances held by the Group that are not available for its use.  There are no significant balance transactions with single external customers in relation to the Group’s total revenues or receivables.  Refer to Note 7.1 for detail information about amounts, terms and conditions associated with accounts receivable from related companies.   F - 45


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The analysis of the age of trade receivables past due but not impaired as of December 31, 2009, December 31, 2008, and January 1, 2008 is as follows:  Trade accounts receivable past due and unpaid but not impaired
     Balance at12-31-2009
     12-31-2008
     01-01-2008ThCh$
     ThCh$
     ThCh$Less than three months
     170,338,640
     181,837,068
     179,469,711Between three and six months
     29,491,746
     31,165,710
     37,983,191Between six and twelve months
     67,272,982
     28,508,481
     38,159,015Greater than twelve months
     108,528,471
     150,191,655
     140,416,101Total
     375,631,839
     391,702,914
     396,028,018
   The reconciliation of changes in the allowance for impairment of trade receivables is as follows:  Trade Receivables Past Due Impaired
     Current andNon-CurrentThCh$Balance at January 1, 2008
     179,438,921Increases (decreases) for the year
     26,106,863Amounts written-off
     (42,487,884)Foreign Currency Translation Differences
     453,286Balance at December 31, 2008
     163,511,186Increases (Decreases) for the year
     38,090,116Amounts Written-off
     (26,875,711)Foreign Currency Translation Differences
     3,063,076Balance at December 31, 2009
     177,788,667
    F - 46


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7.BALANCES AND TRANSACTIONS WITH RELATED COMPANIES  Related party transactions are performed at current market conditions.  Balances and transactions between the Company and its subsidiaries have been eliminated on consolidation and are not disclosed in this note.  As of the date of these financial statements, no guarantees have been given or received nor any allowance for bad or doubtful accounts has been recorded in respects of receivable balances.  7.1Balances and transactions with related companies  The detail of the amounts receivable and payable between the Company and its related companies is as follows:  a)Accounts receivable from related companies:  Balance atCurrent
     Non-CurrentTax ID
     Country
     Company
     Description of the Transaction
     Term of the Transaction
     Nature of the Relationship
     Currency
     12-31-2009
     12-31-2008
     01-01-2008
     12-31-2009
     12-31-2008
     01-01-2008ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$Foreign
     Peru
     E. E. Piura
     Other
     Less than 90 days
     Common Immediate Parent
     Soles
     187,654
     50,178
     73,034
     -
     -
     -Foreign
     Peru
     E. E. Piura
     Other
     Less than 90 days
     Common Immediate Parent
     Ch$
     5,199
     -
     -
     -
     -
     -Foreign
     Spain
     Endesa Energía S.A.
     Other
     Less than 90 days
     Common Immediate Parent
     CPs
     23,575
     51,827
     -
     -
     -
     -Foreign
     Spain
     Endesa Latinoamérica S.A.U.
     Other
     Less than 90 days
     Related to Immediate Parent
     US$
     245,659
     319,769
     225,144
     -
     -
     -Foreign
     Spain
     Endesa Latinoamérica S.A.U.
     Other
     Less than 90 days
     Related to Immediate Parent
     Ar$
     52,688
     -
     -
     -
     -
     -Foreign
     Argentina
     Eléctrica Cabo Blanco S.A.
     Other
     Less than 90 days
     Common Immediate Parent
     Soles
     1,579
     -
     -
     -
     -
     -Foreign
     Peru
     Generalima S.A.
     Other
     Less than 90 days
     Common Immediate Parent
     Soles
     1,579
     -
     -
     -
     -
     -Foreign
     Italy
     Enel
     Other
     Less than 90 days
     Ultimate Controlling Party
     Ch$
     219,278
     -
     -
     -
     -
     -Foreign
     Argentina
     SACME
     Other
     Less than 90 days
     Associate
     Ar$
     154,115
     93
     772
     -
     -
     -Foreign
     Argentina
     SACME
     Other
     Less than 90 days
     Associate
     Ch$
     -
     -
     -
     -
     -
     -Foreign
     Argentina
     Endesa CEMSA S.A.
     Commercial Current Account
     Less than 90 days
     Associate
     Ar$
     16,241,814
     18,455,984
     9,122,231
     -
     -
     -Foreign
     Argentina
     Endesa CEMSA S.A.
     Commercial Current Account
     Less than 90 days
     Associate
     Ch$
     3,121
     -
     -
     -
     -
     -Foreign
     Spain
     Endesa Servicios S.L.U.
     Other
     Less than 90 days
     Common Immediate Parent
     US$
     15,586
     160,545
     197,432
     -
     -
     -Foreign
     Spain
     Endesa Servicios S.L.U.
     Other
     Less than 90 days
     Common Immediate Parent
     Euros
     26,980
     770,108
     561,046
     -
     -
     -Foreign
     Spain
     Endesa Servicios S.L.U.
     Other
     Less than 90 days
     Common Immediate Parent
     Ch$
     424,958
     -
     -
     -
     -
     -Foreign
     Spain
     ENDESA, S.A.
     Commercial Current Account
     Less than 90 days
     Immediate Parent
     US$
     -
     13,611
     272,825
     -
     -
     -76.788.080-4
     Chile
     GNL Quintero S.A.
     Commercial Current Account
     Less than 90 days
     Associate
     US$
     -
     4,198,715
     40,175,603
     -
     -
     -76.418.940-k
     Chile
     GNL Chile S.A.
     Other
     Less than 90 days
     Associate
     US$
     577,755
     725,127
     1,873,672
     -
     -
     -76.418.940-k
     Chile
     GNL Chile S.A.
     Other
     Less than 90 days
     Associate
     Ch$
     285,024
     -
     -
     -
     -
     -76.583.350-7
     Chile
     Konecta Chile S.A.
     Other
     Less than 90 days
     Associate
     Ch$
     547,069
     735
     77,625
     -
     -
     -76.583.350-7
     Chile
     Konecta Chile S.A.
     Other
     Less than 90 days
     Associate
     Ch$
     599
     -
     -
     -
     641,336
     505,026Total
     
     
     
     
     19,014,232
     24,746,692
     52,579,384
     -
     641,336
     505,026
   F - 47


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b)Accounts payables to related companies:  Balance atCurrent
     Non-CurrentTax ID
     Country
     Company
     Description of the Transaction
     Term of the Transaction
     Nature of the Relationship
     Currency
     12-31-2009
     12-31-2008
     01-01-2008
     12-31-2009
     12-31-2008
     01-01-2008ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$Foreign
     Peru
     E E Piura
     Other
     Less than 90 days
     Common Parent
     Soles
     718,613
     857,324
     369,810
     -
     -
     -Foreign
     Spain
     Endesa Latinoamérica S.A.U.
     Dividends
     Less than 90 days
     Related to immediate Parent
     Ar$
     144,655
     -
     -
     -
     -
     -Foreign
     Spain
     Endesa Latinoamérica S.A.U.
     Dividends
     Less than 90 days
     Related to Immediate Parent
     Ch$
     866,168
     73,115,919
     32,726,350
     -
     -
     -Foreign
     Spain
     Endesa Latinoamérica S.A.U.
     Dividends
     Less than 90 days
     Related to Immediate Parent
     R$
     582
     1,833,779
     7,493,872
     -
     -
     -Foreign
     Spain
     Endesa Latinoamérica S.A.U.
     Dividends
     Less than 90 days
     Related to Immediate Parent
     US$
     71,447,653
     -
     -
     -
     -
     -Foreign
     Spain
     Endesa Latinoamérica S.A.U. (1)
     Other
     Less than 90 days
     Related to Immediate Parent
     US$
     2,644,130
     -
     -
     3,556,672
     8,977,789
     8,161,792Foreign
     Spain
     ENDESA, S.A.
     Other
     Less than 90 days
     Related to Immediate Parent
     US$
     -
     -
     -
     -
     -
     -Foreign
     Argentina
     SACME
     Other
     Less than 90 days
     Associate
     Ar$
     99,036
     112,398
     130
     -
     -
     -96.806.130-5
     Chile
     Electrogas S.A.
     Commercial Current Account
     Less than 90 days
     Associate
     Ch$
     263,041
     1,804,673
     256,002
     -
     -
     -Foreign
     Argentina
     Endesa CEMSA S.A.
     Commercial Current Account
     Less than 90 days
     Associate
     Ar$
     16,763,778
     14,436,259
     10,317,134
     -
     -
     -Foreign
     Argentina
     Endesa CEMSA S.A.
     Other
     Less than 90 days
     Associate
     R$
     19,000,085
     23,861,636
     17,908,150
     -
     -
     -Foreign
     Spain
     Endesa Servicios S.L.U.
     Other
     Less than 90 days
     Common Immediate Parent
     US$
     8,038
     -
     386,482
     -
     -
     -Total
     
     
     
     
     111,955,779
     116,021,988
     69,457,930
     3,556,672
     8,977,789
     8,161,792
   (1)The balance payable to Endesa Latinoamérica S.A.U. relates to a loan granted to Compañía Interconexao Energética S.A. (Cien) to purchase machinery and equipment necessary to complete the construction of its second transmission line. The loan is denominated in US dollars, bears an annual interest rate of 8.08% and matures in May of 2012.    F - 48


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c)Significant transactions and their effects in profit or loss:  Transactions with related companies and their effects in profit or loss for the years ended December 31, 2009 and 2008 is as follows:   Tax ID
     Country
     Company
     Nature of the Relationship
     Description of
the Transaction
     12-31-2009
     12-31-2008ThCh$
     ThCh$Foreign
     Argentina
     Endesa CEMSA S.A.
     Associate
     Energy Purchases
     (110,444)
     -Foreign
     Argentina
     Endesa CEMSA S.A.
     Associate
     Energy Sales
     12,489,207
     19,870,268Foreign
     Argentina
     Endesa CEMSA S.A.
     Associate
     Loans
     6,149,685
     -Foreign
     Argentina
     Endesa CEMSA S.A.
     Associate
     Gas Consumption
     (55,180,792)
     (46,618,707)Foreign
     Argentina
     Endesa CEMSA S.A.
     Associate
     Transmission and Transportation Tolls
     4,823,010
     5,580,305Foreign
     Argentina
     Endesa CEMSA S.A.
     Associate
     Other Services Rendered
     33,716
     -Foreign
     Peru
     E E Piura
     Common immediate Parent
     Energy Purchases
     (9,528,999)
     (9,935,134)Foreign
     Peru
     E E Piura
     Common Immediate Parent
     Other Services Rendered
     243,809
     5,176Foreign
     Peru
     E E Piura
     Common Immediate Parent
     Energy Sales
     968,848
     -Foreign
     Spain
     Endesa Energía S.A.
     Common immediate Parent
     Other Services Rendered
     35,352
     -Foreign
     Spain
     Endesa Latinoamérica S.A.U.
     Immediate Parent
     Loans
     1,533,007
     (797,186)Foreign
     Spain
     Endesa Servicios S.L.U.
     Common Immediate Parent
     Other Services Rendered
     480,584
     909,196Foreign
     Peru
     Generalima S.A.
     Common Immediate Parent
     Other Services Rendered
     113,001
     -76.788.080-4
     Chile
     GNL Quintero S.A.
     Associate
     Energy Sales
     398,267
     -76.788.080-4
     Chile
     GNL Quintero S.A.
     Associate
     Other Services Rendered
     37,651
     11,25676.788.080-4
     Chile
     GNL Quintero S.A.
     Associate
     Loans
     (247,192)
     -Foreign
     Argentina
     SACME
     Associate
     Other Services Rendered
     (759,968)
     -Foreign
     Italy
     Enel
     Ultimate Controlling Party
     Other Services Rendered
     688,898
     -96.806.130-5
     Chile
     Electrogas S.A.
     Associate
     Gas TransportationTolls
     (1,239,471)
     -76.583.350-7
     Chile
     Konecta Chile S.A.
     Associate
     Loans
     49,992
     -76.583.350-7
     Chile
     Konecta Chile S.A.
     Associate
     Other Services Rendered
     3,028
     12,120Total
     (39,018,812)
     (30,962,706)
  Transfers of short-term funds between related companies are treated as current cash transactions, with associated variable interest rates based on market conditions. The resulting amounts receivable or payable are usually at 30 days term, with automatic rollover for the same term and amortization in line with cash flows.  7.2Board of directors and key management personnel  Enersis is managed by its Executive Officers under the direction of its Board of Directors which consists of seven members. Each director serves for a three-year term after which they can be reelected.  The Board of Directors was elected at the General Shareholders Meeting held on April 15, 2009. The Chairman, Vice Chairman, and Secretary positions of the Board were designated at the same Meeting.  a)Accounts receivable and payable and other transactions  ·Accounts receivable and payable  There are no outstanding amounts receivable or payable between the Company and the members of the Board of Directors and Key Management Personnel.  ·Other transactions  No other transactions have been performed between the Company and the members of the Board of Directors and Key Management Personnel.   b)Compensation of Directors  In accordance with article 33 of Law No. 18,046, which governs stock corporations, the compensation of Directors is established each year at the General Shareholders Meeting of Enersis S.A. The method to determine the remuneration of Directors has not changed since 2001.   F - 49


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The remuneration consists of paying a variable annual compensation equal to a one-thousandth portion of the profit for the year. Also, each member of the Board will be paid a monthly compensation determined as follows:  -UF 72.74 as monthly fee fixed; and  -UF 36.37 as per diem for Board meetings attendance.  The amounts paid for the monthly fee will be treated as payment in advance of the variable annual compensation described above. The remuneration for the Chairman of the Board will be twice that for a director, and the compensation of the Vice Chairman will be 50% higher than that for a director.  Any payment in advance received will be deducted from the annual variable compensation with no reimbursement if the annual variable compensation is lower than the aggregated payment in advances. The variable compensation will be paid after the General Shareholders’ Meeting approves the Annual Report, Balance Sheet and Financial Statements, and the Independent Auditors’ Reports and Account Inspectors’ Reports relating to a corresponding year.  If any Director of Enersis S.A. is a member of more than one Board in any Chilean or foreign subsidiaries and/or associates, or holds the position of director or advisor in other Chilean or foreign companies or legal entities in which Enersis S.A. has a direct or indirect ownership interest, such Director can be compensated for his/her participation in only one of those Boards.  The Executives Officers of Enersis S.A. and/or any of its Chilean or foreign subsidiaries or associates will not receive any compensation or per diem if they hold the position of director in any of the Chilean or foreign subsidiaries or associates of Enersis S.A. Nevertheless, the executives can receive such compensation or per diem providing that are authorized as payment in advance over the variable portion of their remuneration received from the respective companies for which the executives are employed.  Directors Committee:  Each member of the Directors Committee receives a per diem of UF 36.37 for each attended meeting, capped at 12 annual remunerated meetings. The members of the Directors Committee have been receiving the same determined remuneration since 2001.  Audit Committee:  Each member of the Audit Committee receives a per diem of UF 36.37 for each attended meeting, capped at 6 annual remunerated meetings. The members of the Audit Committee have been receiving the same determined remuneration since 2005.   F - 50


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The following tables set forth the compensation paid to the members of the Board of Directors, Directors Committee and Audit Committee as of December 31, 2009 and 2008:  Name
     Position
     12-31-2009Period in position
     Enersis Board
ThCh$
     Board of Subsidiaries or Associates
ThCh$
     Directors Committee
ThCh$
     Audit Committee
ThCh$Pablo Yrarrázaval Valdés
     Chairman
     01/01/09 to 12/31/09
     55,012
     -
     8,388
     -Andrea Bentran
     Vice Chairman
     08/01/09 to 12/31/09
     -
     -
     -
     -Rafael Miranda Robredo
     Director (*)
     01/01/09 to 12/31/09
     35,854
     -
     -
     -Pedro Larrea Paguaga
     Director
     01/01/09 to 07/29/09
     16,856
     -
     -
     -Hernán Somerville Senn
     Director
     01/01/09 to 12/31/09
     28,280
     -
     9,163
     3,824Eugenio Tironi Barrios
     Director
     01/01/09 to 12/31/09
     28,280
     -
     -
     -Patricio Claro Grez
     Director
     01/01/09 to 12/31/09
     28,280
     -
     9,163
     3,824Juan Eduardo Errázuriz Ossa
     Director (**)
     01/01/09 to 12/31/09
     23,698
     -
     -
     3,061Total
     216,260
     -
     26,714
     10,709Name
     Position
     12-31-2008Period in position
     Enersis Board
ThCh$
     Board of Associates
ThCh$
     Directors Committee
ThCh$
     Audit Committee
ThCh$Pablo Yrarrázaval Valdés
     Chairman
     01/01/08 to 12/31/08
     53,446
     -
     8,939
     -Rafael Miranda Robredo
     Vice Chairman
     01/01/08 to 12/31/08
     40,335
     -
     -
     -Pedro Larrea Paguaga
     Director
     01/01/08 to 12/31/08
     25,951
     -
     -
     -Hernán Somerville Senn
     Director
     01/01/08 to 12/31/08
     26,722
     -
     8,939
     5,863Eugenio Tironi Barrios
     Director
     01/01/08 to 12/31/08
     26,721
     -
     -
     -Patricio Claro Grez
     Director
     01/01/08 to 12/31/08
     26,722
     -
     8,939
     5,863Juan Eduardo Errázuriz Ossa
     Director
     01/04/08 to 12/31/08
     19,539
     -
     -
     2,982Juan Ignacio de la Mata Gorostizaga
     Director
     01/01/08 to 03/31/08
     6,458
     -
     -
     2,156Total
     225,894
     -
     26,817
     16,864
   (*) Vice Chairman until July 31, 2009 and Director since August 1, 2009. (**) Director until October 28, 2009.   c)Guarantees established by the Company in favor of the Directors.  No guarantees have been given to or received from Directors.   F - 51


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7.3Compensation of Key Management Personnel  a)Compensation received by key Management personnel  Key Management PersonnelName
     PositionIgnacio Antoñanzas Alvear
     Chief Executive OfficerAlfredo Ergas Segal
     Chief Financial OfficerAngel Chocarro García (*)
     Accounting OfficerRamiro Alfonsín Balza
     Planning and Control OfficerAntonio Zorrilla Ortega
     Internal Audit OfficerFrancisco Silva Bafalluy
     Human Resources OfficerJuan Pablo Larraín Medina (*)
     Communications OfficerDomingo Valdés Prieto
     General Counsel
   (*) Beginning on November 1, 2009.  The compensation paid to key management personnel totaled ThCh$ 2,399,672 as of December 31, 2009 (ThCh$2,230,137 as of December 31, 2008). Such compensation includes the remunerations paid and the accrued short-term (annual bonuses) and long-term (severance indemnities payment) benefits.   Incentive plans for principal executives and managers  Enersis has implemented for its executives an annual bonuses plan based on achieving specified targets and  on the level of their individual contribution in achieving the overall goals of the Group. The plan provides for a range of bonuses amounts according to seniority level. The bonuses eventually paid to the executives consist of a certain number of monthly gross remunerations.  b)Guarantees established by the Company in favor of the management  No guarantees have been given to or received from key management personnel.   7.4Compensation plans linked to share price  There are share-based payments granted to the Directors or key management personnel.    F - 52


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8.INVENTORIES  The detail of inventories as of December 31, 2009, December 31, 2008, and January 1, 2008 is as follows:  Classes of Inventory
     Balance at12-31-2009
     12-31-2008
     01-01-2008ThCh$
     ThCh$
     ThCh$Raw materials
     3,461,372
     3,828,531
     2,670,798Goods
     1,467,734
     2,867,450
     1,067,548Supplies for production
     42,152,882
     53,009,192
     59,139,804Other inventories (*)
     9,237,280
     37,269,988
     33,865,335Total
     56,319,268
     96,975,161
     96,743,485The detail of Other Inventories is as follows:Balance at(*) Other Inventories
     12-31-2009
     12-31-2008
     01-01-2008ThCh$
     ThCh$
     ThCh$Supplies for Projects and for Spare Parts
     3,492,452
     5,182,106
     2,942,208Electric Supplies
     5,670,986
     24,227,971
     29,041,995Supplies and Equipment
     -
     5,851,195
     4,245Obsolescence Provision
     (1,232,549)
     (1,477,272)
     (1,207,733)Other
     1,306,391
     3,485,988
     3,084,620Total
     9,237,280
     37,269,988
     33,865,335
  There are no inventories pledged as security for liabilities.  The cost of inventories recognized as an expense as of December 31, 2009 was ThCh$580,237,613 (ThCh$ 847,411,384 as of December 31, 2008). See Note 27.  As of December 31, 2009 and 2008 no inventories has been written-down.   9.CURRENT TAX RECEIVABLES AND PAYABLES  The detail of current tax receivables as of December 31, 2009, December 31, 2008, and January 1, 2008 is as follows:  Balance at12-31-2009
     12-31-2008
     01-01-2008ThCh$
     ThCh$
     ThCh$Monthly provisional tax payments
     20,644,496
     46,628,379
     30,186,428VAT tax credit
     51,159,855
     66,059,182
     52,354,622Tax credit for absorbed profits
     17,116,026
     17,174,739
     16,143,722Tax credit for training expenses
     251,365
     274,182
     528,719Other
     23,004,210
     22,563,984
     47,577,930Total
     112,175,952
     152,700,466
     146,791,421
   F - 53


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The detail of current tax payables as of December 31, 2009, December 31, 2008, and January 1, 2008 is as follows:  Balance at12-31-2009
     12-31-2008
     01-01-2008ThCh$
     ThCh$
     ThCh$Income tax payable
     118,845,936
     112,016,737
     50,288,123VAT Tax Charge
     37,272,870
     50,552,950
     36,003,275Stamp Taxes
     -
     8,225,376
     11,896Provision for taxes
     3,963,860
     1,851,679
     1,746,168Other
     25,203,005
     28,628,733
     14,592,697Total
     185,285,671
     201,275,475
     102,642,159
  10.NON-CURRENT ASSETS AND DISPOSAL GROUPS HELD FOR SALE  During the last quarter of 2009, the Board of Directors of Enersis authorized the sale of the subsidiary Compañía Americana de Multiservicios (CAM) because such subsidiary was considered a non core business. The sale process includes at first an internal verification of the market and the hiring of a financial advisor to provide assistance in the sale process, so that, upon offers being received, will be submitted to the Board for making the final decision about the sale and its specific conditions. The sale is expected to be completed in 2010. Despite of certain offers have been received to date, the Company is actively seeking potential buyers.  CAM is a company engaged in providing products and services related to electricity as well as related developments based on technological innovation in five Latin American countries. In these markets, it offers various products for electric power infrastructure, and it provides technologies and services for electricity distribution, water and sewage, gas, mining, telecommunications, construction, and industry in general.  As described in Note 3 i), non-current assets and disposal groups held for sale have been measured at fair value less cost to sell. An impairment loss of was recognized Ch$ 21,916 million for the initial measurement of the assets to fair value less cost to sell on its reclassification as held for sale.  The detail of the assets and liabilities classified as held for sale as of December 31, 2009 is as follows:  ASSETS
     ThCh$
     
     LIABILITIES
     ThCh$CURRENT ASSETS
     50,431,921
     
     CURRENT LIABILITIES
     42,058,254Current operating assets:
     50,431,921
     
     Current operating liabilities:
     42,058,254Cash and cash equivalents
     4,011,638
     
     Interest-bearing borrowings
     7,013,861Trade and other receivables, net
     28,831,795
     
     Trade payables and other payables
     21,981,684Inventories
     14,764,600
     
     Provisions
     6,856,461Other current assets
     2,823,888
     
     Current tax payable
     2,659,591Other current liabilities
     3,546,657NON-CURRENT ASSETS
     19,928,930Trade and other receivables, net
     3,968,937
     
     NON-CURRENT LIABILITIES
     8,592,112Intangibles assets, net
     1,358,619
     
     Interest-bearing borrowings
     1,108,759Property, plant and equipment, net
     10,817,749
     
     Deferred taxes
     4,727,164Deferred taxes
     3,612,849
     
     Other non-current liabilities
     647,909Other non-current assets
     170,775
     
     Post-employment benefit obligations
     2,108,280TOTAL ASSETS
     70,360,851
     
     TOTAL LIABILITIES
     50,650,366
   F - 54


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11.AVAILABLE-FOR-SALE FINANCIAL ASSETS  As stated in Note 3.f.1, the detail of available-for-sale financial assets as of December 31, 2009, December 31, 2008, and January 1, 2008 is as follows:  Balance atCurrent
     Non-CurrentAvailable-for-Sale Financial Assets
     12-31-2009
     12-31-2008
     01-01-2008
     12-31-2009
     12-31-2008
     01-01-2008ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$Unquoted equities
     -
     -
     -
     2,423,878
     22,466,139
     22,462,732Quoted equities
     -
     -
     -
     88,838
     28,897
     38,072Total
     -
     -
     -
     2,512,716
     22,495,036
     22,500,804
  On October 2, 2009, Enersis S.A. and its subsidiary Chilectra S.A. sold in the stock exchange of Bogotá their equity securities of Empresa Eléctrica de Bogotá (EEB), which in an aggregate represented a 2.47% of the paid-in capital in EEB, with Enersis S.A. owning a 1.41% interest equivalent to 1,213,741 shares, and Chilectra S.A. owning or a 1.06% interest equivalent to 910,306 shares.  This transaction has resulted in the recognition of a gain in profit or loss totaled ThCh$ 28,113,548. See Note 27.  12.OTHER NON-CURRENT FINANCIAL ASSETS  Other non-current financial assets as of December 31, 2009, December 31, 2008, and January 1, 2008, are as follows:  Balance at12-31-2009
     12-31-2008
     01-01-2008ThCh$
     ThCh$
     ThCh$Deposits in Guarantee
     24,548,711
     -
     25,391,701Other Assets
     1,197,291
     1,746,462
     243,618Total
     25,746,002
     1,746,462
     25,635,319
   F - 55


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13.INVESTMENTS IN ASSOCIATES ACCOUNTED FOR USING THE EQUITY METHOD AND JOINTLY-CONTROLLED COMPANIES  13.1 Equity method accounted investments in associates  a)The following tables set forth the changes in the shareholders equity of the investment in associates during the years ended December 31, 2009 and 2008:  Movements in investments
in associates
     Country of origin
     Functional
currency
     Ownership interest
     Balance as of 12/31/2008
     Additions
     Share
of Profit
(Loss)
     Dividends Received
     Foreign Currency Translation
     Other
     Balance at 12/31/2009comprehensiveincomeElectrogas S.A. (1)
     Chile
     US Dollar
     0.02%
     4,275
     -
     1,632
     (1,291)
     (841)
     -
     3,775Inversiones Electrogas S.A.
     Chile
     Chilean Peso
     42.50%
     9,065,667
     -
     2,871,709
     (3,202,586)
     (915,853)
     -
     7,818,937GNL Quintero S.A.
     Chile
     US Dollar
     20.00%
     24,126,683
     -
     (825,889)
     -
     (4,508,852)
     (8,664,477)
     10,127,465Endesa CEMSA S.A.
     Argentina
     Argentinean Peso
     45.00%
     4,592,900
     -
     186,494
     -
     (1,481,614)
     -
     3,297,780Sacme S.A.
     Argentina
     Argentinean Peso
     50.00%
     43,868
     -
     1,633
     
     (12,275)
     -
     33,226Konecta Chile S.A.
     Chile
     Chilean Peso
     26.20%
     278
     -
     -
     -
     -
     -
     278TOTAL
     37,833,671
     -
     2,235,579
     (3,203,877)
     (6,919,435)
     (8,664,477)
     21,281,461
   Movements in Investments
in Associates
     Country of Origin
     Functional
Currency
     Ownership Interest
     Balance at 01/01/2008
     Additions
     Share of Profit (Loss)
     Dividends Received
     Foreign Currency Translation
     Other
     Balance at 12/31/2008comprehensiveincomeElectrogas S.A. (1)
     Chile
     US Dollar
     0.02%
     3,406
     -
     1,620
     (1,022)
     271
     -
     4,275Inversiones Electrogas S.A.
     Chile
     Chilean Peso
     42.50%
     7,335,639
     -
     3,184,266
     (1,263,179)
     (191,059)
     -
     9,065,667GNL Quintero S.A.
     Chile
     US Dollar
     20.00%
     1,590,042
     17,778,818
     (618,726)
     -
     404,940
     4,971,609
     24,126,683Endesa CEMSA S.A.
     Argentina
     Argentinean Peso
     45.00%
     3,488,806
     -
     692,884
     -
     411,210
     -
     4,592,900Sacme S.A.
     Argentina
     Argentinean Peso
     50.00%
     36,448
     -
     1,136
     -
     6,284
     -
     43,868Konecta Chile S.A.
     Chile
     Chilean Peso
     26.20%
     278
     -
     -
     -
     -
     -
     278TOTAL
     12,454,619
     17,778,818
     3,261,180
     (1,264,201)
     631,646
     4,971,609
     37,833,671
   (1)The Group exercises significant influence indirectly through the 42.5% ownership interest held in Inversiones Electrogas S.A. which is the immediate parent company of Electrogas S.A. holding a 99.95% of ownership interest.   F - 56


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b)The main transactions carried out by the Group in respect of equity accounted investments in associates during 2009 and 2008 were as follow:  2009  As of December 31, 2009 no changes in ownership interest in our investment associates have occurred.  2008  On July 15, 2008 the subsidiary Endesa Chile made a capital contribution of US$35,680,377 (equivalent to ThCh$17,778,818) in the associate GNL Quintero S.A., by capitalizing credits, maintaining its 20% ownership interest on that associate.  On August 20, 2008 the subsidiary Endesa Chile subscribed a capital contribution of US$1,000,000 (equivalent to a ThCh$528,191) in the associate GNL Chile S.A., maintaining its 33.33% ownership interest on that associate.   c)Additional financial information about the investments in associates  - Significant influence investments.  The following tables set forth summarized information of  main investment in associates, including the aggregated amounts of assets, liabilities, revenues, expenses and profit or loss as of December 31, 2009 and 2008:  Significant influence investments
     December 31, 2009Ownership interest
     Non-Current assets
     Current assets
     Non-Current liabilities
     Current liabilities
     Revenues
     Expenses
     Profit (Loss)%
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$Endesa CEMSA S.A.
     45.00%
     168,678
     54,486,842
     -
     47,327,120
     19,339,396
     (18,924,965)
     414,431Inversiones Electrogas S.A.
     42.50%
     18,471,729
     -
     -
     74,230
     6,940,967
     (184,004)
     6,756,963GNL Quintero S.A.
     20.00%
     562,965,213
     28,098,229
     334,839,224
     205,586,895
     12,893,075
     (17,022,519)
     (4,129,444)Electrogas S.A. (1)
     0.02125%
     5,606,476
     41,393,766
     8,210,466
     21,027,132
     13,510,320
     (5,830,170)
     7,680,150Significant influence investments
     December 31, 2008Ownership interest
     Non-Current assets
     Current assets
     Non-Current liabilities
     Current liabilities
     Revenues
     Expenses
     Profit (Loss)%
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$Endesa CEMSA S.A.
     45.00%
     548,162
     46,807,941
     -
     37,149,659
     5,108,385
     (3,568,643)
     1,539,742Inversiones Electrogas S.A.
     42.50%
     21,393,734
     -
     -
     62,753
     7,618,787
     (126,396)
     7,492,391GNL Quintero S.A.
     20.00%
     586,921,507
     48,609,505
     489,922,026
     24,975,571
     -
     (3,093,630)
     (3,093,630)Electrogas S.A. (1)
     0.02125%
     47,753,926
     4,189,072
     25,977,552
     5,847,799
     14,006,127
     (6,382,598)
     7,623,529
   (1) The Group exercises significant influence indirectly through the 42.5% ownership interest held in Inversiones Electrogas S.A. which is the immediate parent company of Electrogas S.A. holding a 99.95% of ownership interest.  Appendix 3 to these consolidated financial statements provides information about the principal activities and ownership interest of the Groups investment in associates.  All of our associates do not have published price quotations.  The Group has discontinued recognition of its share of losses for its investment in associates, GNL Chile S.A. and Endesa Market Place S.A. The unrecognized share of losses recognized as liabilities for GNL Chile S.A. totaled ThCh$2,552,867 and ThCh$2,244,759 as of December 31, 2009 and 2008 while for Endesa Market Place S.A. totaled ThCh$1,503,760 as of December 31, 2008.    F - 57


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13.2 Jointly controlled companies.  The following tables set forth summarized information of jointly controlled companies that are reported using proportionate consolidation as of December 31, 2009 and 2008.  December 31, 2009Ownership Interest
     Non-Current Assets
     Current Assets
     Non-Current Liabilities
     Current Liabilities
     Revenues
     Expenses
     Profit (Loss)%
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$Hidroaysén S.A.
     51.00%
     86,908,393
     8,111,503
     -
     37,110,402
     -
     (5,994,070)
     (5,994,070)Transquillota Ltda
     50.00%
     10,198,482
     1,288,870
     876,728
     1,480,132
     2,327,365
     (1,207,963)
     1,119,402GasAtacama S.A.
     50.00%
     316,349,774
     114,435,232
     42,467,600
     187,877,000
     343,304,368
     (319,108,438)
     24,195,930Sistemas Sec S.A.
     49.00%
     6,667,086
     6,640,078
     5,059,582
     4,893,676
     7,814,302
     (7,063,659)
     750,643Distribuidora de Energía de Cundinamarca S.A.
     48.99%
     76,304,505
     29,937,971
     31,814,970
     25,954,531
     68,128,403
     (66,191,338)
     1,937,065December 31, 2008Ownership Interest
     Non-Current Assets
     Current Assets
     Non-Current Liabilities
     Current Liabilities
     Revenues
     Expenses
     Profit (Loss)%
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$Hidroaysén S.A.
     51.00%
     61,671,245
     8,981,534
     165,087
     6,584,072
     -
     (2,860,539)
     (2,860,539)Transquillota Ltda
     50.00%
     11,158,610
     2,195,498
     1,076,759
     4,267,259
     1,391,918
     (654,610)
     737,308GasAtacama S.A.
     50.00%
     397,241,564
     140,024,772
     233,117,138
     83,824,330
     553,663,581
     (540,477,046)
     13,186,535Sistemas Sec S.A.
     49.00%
     6,469,256
     4,711,757
     6,227,616
     2,383,834
     8,943,450
     (8,251,642)
     691,808
    F - 58


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14.INTANGIBLE ASSETS.  14.1 Intangible assets  Intangible asset as of December 31, 2009 and 2008 are detailed as follows:  Intangible Assets, Net
     12-31-2009
     12-31-2008ThCh$
     ThCh$Intangible Assets, Net
     2,947,474,178
     2,626,894,224Goodwill
     1,501,351,933
     1,361,283,587Identifiable Intangible Assets, Net
     1,446,122,245
     1,265,610,637Easements
     11,786,094
     8,357,393Water Rights
     12,291,780
     10,503,656Concessions
     1,357,976,679
     1,186,692,686Development Costs
     12,330
     17,123Patents, Registered Trademarks and Other Rights
     6,844,249
     5,316,837Computer Software
     52,003,080
     53,667,078Other Identifiable Intangible Assets
     5,208,033
     1,055,864Intangible Assets, Gross
     12-31-2009
     12-31-2008ThCh$
     ThCh$Intangible Assets, Gross
     3,649,325,776
     3,323,092,875Goodwill
     1,501,351,933
     1,361,283,587Identifiable Intangible Assets, Gross
     2,147,973,843
     1,961,809,288Easements
     15,269,989
     15,929,485Water Rights
     15,232,158
     13,495,367Concessions
     1,950,821,927
     1,777,329,379Development Costs
     25,522
     32,031Patents, Registered Trademarks and Other Rights
     8,541,903
     6,810,063Computer Software
     145,952,298
     144,380,712Other Identifiable Intangible Assets
     12,130,046
     3,832,251Accumulated Amortization and Impairment
     12-31-2009
     12-31-2008ThCh$
     ThCh$Accumulated Amortization and Impairment, Total
     (701,851,598)
     (696,198,651)Easements
     (3,483,895)
     (7,572,092)Water Rights
     (2,940,378)
     (2,991,711)Concessions
     (592,845,248)
     (590,636,693)Development Costs
     (13,192)
     (14,908)Patents, Registered Trademarks and Other Rights
     (1,697,654)
     (1,493,226)Computer Software
     (93,949,218)
     (90,713,634)Other Identifiable Intangible Assets
     (6,922,013)
     (2,776,387)
   F - 59


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The reconciliation of the carrying amounts of intangible assets for the years ended December 31, 2009 and 2008 is as follows:  Year ended December 31, 2009  Movements in intangible assets
     Development costs, net
     Easements, net
     Water rights,
net
     Concessions, net
     Patents, registered trademarks and other rights, net
     Computer software,
net
     Other identifiable intangible assets, net
     Intangible assets,
netThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$Opening Balance at 01/01/2009
     17,123
     8,357,393
     10,503,656
     1,186,692,686
     5,316,837
     53,667,078
     1,055,864
     1,265,610,637Movements in Identifiable Intangible Assets
     
     
     
     
     
     
     
     -Additions from Internal Developments
     -
     -
     -
     -
     -
     805,735
     -
     805,735Additions
     -
     922,067
     -
     201,622,235
     394,063
     11,036,515
     4,987,412
     218,962,292Transfers to (from) Non-Current Assets and Disposal Groups Held for Sale
     -
     -
     -
     -
     -
     (1,547,852)
     (233,741)
     (1,781,593)Amortization (*)
     (1,333)
     (24,159)
     (346,002)
     (94,784,374)
     (226,916)
     (11,499,590)
     (900,038)
     (107,782,412)Foreign Currency Translation Differences
     (3,460)
     (62,423)
     (1,513,556)
     82,055,009
     (907,664)
     452,281
     (391,739)
     79,628,448Other Increases (Decreases)
     -
     2,593,216
     3,647,682
     (17,608,877)
     2,267,929
     (911,087)
     690,275
     (9,320,862)Movements in Identifiable Intangible Assets, Total
     (4,793)
     3,428,701
     1,788,124
     171,283,993
     1,527,412
     (1,663,998)
     4,152,169
     180,511,608Closing Balance Identifiable Intangible Assets at 12/31/2009
     12,330
     11,786,094
     12,291,780
     1,357,976,679
     6,844,249
     52,003,080
     5,208,033
     1,446,122,245Goodwill Closing Balance (Note 14.2)
     
     
     
     
     
     
     
     1,501,351,933Closing Balance Intangible Assets at 12/31/2009
     
     
     
     
     
     
     
     2,947,474,178
  (*) See Note 28 Depreciation and Amortization.  Year ended as of December 31, 2008  Movements in Intangible Assets
     Development costs, net
     Easements, net
     Water rights,
net
     Concessions, net
     Patents, registered trademarks and other rights, net
     Computer software, net
     Other identifiable intangible assets, net
     Intangible assets, netThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$Opening Balance at 01/01/2008
     14,656
     7,721,478
     10,533,473
     1,108,734,103
     5,404,166
     47,167,828
     17,403,632
     1,196,979,336Movements in Identifiable Intangible AssetsAdditions from Internal Developments
     -
     -
     -
     -
     -
     911,887
     -
     911,887Additions
     -
     163,412
     1,360,102
     272,104,278
     480,782
     13,681,139
     80,000
     287,869,713Disinvestments
     -
     -
     -
     -
     -
     (272,108)
     -
     (272,108)Amortization
     (1,649)
     (25,916)
     (699,006)
     (77,888,662)
     (259,476)
     (8,280,028)
     (10,132)
     (87,164,869)Foreign Currency Translation Differences
     819
     -
     -
     (68,642,556)
     6,895
     2,968,877
     3,724
     (65,662,241)Other Increases (Decreases)
     3,297
     498,419
     (431,437)
     (47,614,477)
     (575,006)
     (2,510,517)
     (16,421,360)
     (67,051,081)Total Movements
     2,467
     635,915
     229,659
     77,958,583
     (346,805)
     6,499,250
     (16,347,768)
     68,631,301Closing Balance Identifiable Intangible Assets at 12/31/2008
     17,123
     8,357,393
     10,763,132
     1,186,692,686
     5,057,361
     53,667,078
     1,055,864
     1,265,610,637Goodwill, Net, Ending Balance (Note 14.2)
     
     
     
     
     
     
     
     1,361,283,587Closing Balance Intangible Assets at 12/31/2008
     
     
     
     
     
     
     
     2,626,894,224
   In accordance with estimates and projections of the management of the Group, the future cash flows expected attributable to intangible assets allow recovering the carrying amount of these assets recorded as of December 31, 2009.  As of December 31, 2009 the Company does not have significant intangible assets with indefinite useful life.    F - 60


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14.2Goodwill  The reconciliation of the carrying amount of goodwill as of December 31, 2009 and 2008 is as follows:  Company
     Opening Balance at 01/01/2008
     Foreign Currency Translation
     Closing Balance at 12/31/2008
     Additions
     Foreign Currency Translation
     Closing
Balance at 12/31/2009ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$Distrilec S.A.
     6,320,679
     1,062,507
     7,383,186
     -
     (2,037,713)
     5,345,473Edesur S.A.
     5,355,146
     900,201
     6,255,347
     -
     (1,726,437)
     4,528,910Ampla S.A.
     237,894,409
     (6,359,211)
     231,535,198
     -
     16,093,387
     247,628,585Investluz S.A.
     120,893,649
     (3,215,176)
     117,678,473
     -
     8,123,310
     125,801,783Empresa Eléctrica de Colina Ltda.
     2,240,478
     -
     2,240,478
     -
     -
     2,240,478Codensa S.A.
     10,686,274
     1,605,375
     12,291,649
     -
     (1,543,016)
     10,748,633Pangue S.A.
     3,139,337
     -
     3,139,337
     -
     -
     3,139,337Endesa Costanera S.A.
     3,684,244
     872,536
     4,556,780
     -
     (1,260,549)
     3,296,231Southern Cone Power Argentina S.A.
     3,232,176
     546,854
     3,779,030
     -
     (1,045,539)
     2,733,491Hidroeléctrica el Chocón S.A.
     16,492,236
     3,094,705
     19,586,941
     -
     (5,416,671)
     14,170,270San Isidro S.A.
     1,516,768
     -
     1,516,768
     -
     -
     1,516,768Empresa Eléctrica de Cundinamarca S.A. (1)
     -
     -
     -
     7,083,530
     414,012
     7,497,542Edelnor S.A.        (2)
     -
     -
     -
     43,662,944
     (3,146,697)
     40,516,247Cachoeira Dourada S.A.
     87,492,846
     (2,352,746)
     85,140,100
     -
     6,189,928
     91,330,028Edegel S.A.          (2)
     453,128
     100,475
     553,603
     81,370,212
     (6,003,555)
     75,920,260Emgesa S.A. E.S.P.
     4,744,215
     711,736
     5,455,951
     -
     (686,926)
     4,769,025Chilectra S.A.
     128,374,362
     -
     128,374,362
     -
     -
     128,374,362Endesa Chile S.A.
     731,782,459
     -
     731,782,459
     -
     -
     731,782,459Distrilima S.A.
     11,394
     2,531
     13,925
     -
     (1,874)
     12,051Total
     1,364,313,800
     (3,030,213)
     1,361,283,587
     132,116,686
     7,951,660
     1,501,351,933
   In accordance with the Group’s management estimates and projections , the future cash flows projections used to determined the recoverable amount of the Cash Generating Units (or groups of Cash-Generating Units), to which the acquired goodwill has been allocated, exceeds its carrying amount, as such no impairment losses has been recognized as of December 31, 2009 and 2008.  (1) Addition corresponding to a 48.997% of goodwill recognized by DECA taking place in March of 2009 the acquisition of Empresa Eléctrica de Cundinamarca. As DECA is a jointly controlled entity, is reported by our subsidiary Condesa S.A. using proportionate consolidation (See Notes 2.4.1 and 5.c).  (2) The additions in Edegel and Edelnor originated as a result of the acquisitions taking place in October of 2009, as per the detail in Note 25.7. Both Edegel and Edelnor were already being consolidated through the global integration method.      F - 61


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15.PROPERTY, PLANT AND EQUIPMENT, NET  Property, plant and equipment as of December 31, 2009 and 2008 are as follows:  Classes of Property, Plant and Equipment, Net
     12-31-2009
     12-31-2008ThCh$
     ThCh$Property, Plant and Equipment, Net
     6,864,071,242
     7,215,792,131Construction in Progress
     710,996,813
     704,106,532Land
     105,539,626
     107,263,181Buildings
     537,134,153
     635,062,398Plant and Equipment
     5,290,412,998
     5,523,897,707IT Equipment
     14,165,508
     17,959,471Fixtures and Fittings
     9,551,749
     24,495,712Motor Vehicles
     1,702,512
     4,152,102Leasehold Improvements
     484,178
     1,916,796Other Property, Plant and Equipment
     194,083,705
     196,938,232Classes of Property, Plant and Equipment, Gross
     12-31-2009
     12-31-2008ThCh$
     ThCh$Property, Plant and Equipment, Gross
     11,449,077,029
     11,791,957,837Construction in Progress
     710,996,813
     704,106,532Land
     105,539,626
     107,263,181Buildings
     729,774,296
     844,320,935Plant and Equipment
     9,471,762,740
     9,628,948,472IT Equipment
     44,699,294
     50,824,228Fixtures and Fittings
     51,720,215
     66,031,173Motor Vehicles
     8,117,546
     10,701,820Leasehold Improvements
     521,182
     1,924,467Other Property, Plant and Equipment
     325,945,317
     377,837,029Classes of Accumulated Depreciation and Impairment, Property, Plant and Equipment
     12-31-2009
     12-31-2008ThCh$
     ThCh$Accumulated Depreciation and Impairment, Property, Plant and Equipment, Total
     4,585,005,787
     4,576,165,706Buildings
     192,640,143
     209,258,537Plant and Equipment
     4,181,349,742
     4,105,050,765IT Equipment
     30,533,786
     32,864,757Fixtures and Fittings
     42,168,466
     41,535,461Motor Vehicles
     6,415,034
     6,549,718Leasehold Improvements
     37,004
     7,671Other Property, Plant and Equipment
     131,861,612
     180,898,797
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The reconciliation of the carrying amounts of property, plant and equipment for the years ended December 31, 2009 and 2008 is as follows:  Changes in 2009
     Construction in Progress
     Land
     Buildings, Net
     Plant and Equipment, Net
     IT Equipment, Net
     Fixtures and Fittings, Net
     Motor Vehicles, Net
     Leasehold Improvements, Net
     Other Property, Plant and Equipment, Net
     Property, Plant and Equipment, NetOpening Balance at January 1, 2009
     704,106,532
     107,263,181
     635,062,398
     5,523,897,707
     17,959,471
     24,495,712
     4,152,102
     1,916,796
     196,938,232
     7,215,792,131Changes
     Additions
     582,635,904
     328,647
     2,835,573
     13,496,442
     1,021,326
     1,829,812
     901,494
     -
     11,214,688
     614,263,886Acquisitions Through Business Combinations
     738,560
     321,713
     162,902
     31,858,508
     119,254
     144,707
     25,407
     -
     32,580
     33,403,631Disposals
     (5,566,491)
     (172,005)
     (28,910)
     14,737,550
     (32,472)
     (16,548)
     (254,650)
     -
     (11,661,348)
     (2,994,874)Transfers to (from) Non-Current Assets and Disposal Groups Held for Sale
     (2,604,574)
     -
     (153,130)
     (768,227)
     (1,445,215)
     (7,121,974)
     (1,113,818)
     -
     (981,469)
     (14,188,407)Depreciation Expense
     
     
     (17,141,091)
     (305,897,443)
     (5,723,356)
     (3,317,429)
     (1,144,121)
     (30,560)
     (13,333,547)
     (346,587,547)Impairment Loss Recognized in profit or loss
     -
     -
     -
     (43,999,600)
     -
     -
     -
     -
     -
     (43,999,600)Foreign Currency Translation Differences
     (21,558,720)
     (22,245,010)
     (80,797,075)
     (365,052,553)
     (5,358,344)
     (12,300,921)
     (1,465,393)
     178,361
     (45,283,415)
     (553,883,070)Other Increases (Decreases)
     (546,754,398)
     20,043,100
     (2,806,514)
     422,140,614
     7,624,844
     5,838,390
     601,491
     (1,580,419)
     57,157,984
     (37,734,908)Total Changes
     6,890,281
     (1,723,555)
     (97,928,245)
     (233,484,709)
     (3,793,963)
     (14,943,963)
     (2,449,590)
     (1,432,618)
     (2,854,527)
     (351,720,889)Closing Balance at December 31, 2009
     710,996,813
     105,539,626
     537,134,153
     5,290,412,998
     14,165,508
     9,551,749
     1,702,512
     484,178
     194,083,705
     6,864,071,242Changes in 2008
     Construction in Progress
     Land
     Buildings, Net
     Plant and Equipment, Net
     IT Equipment, Net
     Fixtures and Fittings, Net
     Motor Vehicles, Net
     Leasehold Improvements, Net
     Other Property, Plant and Equipment, Net
     Property, Plant and Equipment, NetOpening Balance at January 1, 2008
     428,599,320
     96,815,751
     438,597,728
     5,114,427,314
     19,852,332
     32,625,906
     3,744,719
     1,083,816
     199,110,380
     6,334,857,266Changes
     Additions
     497,772,204
     2,467,967
     4,207,391
     94,123,801
     6,644,208
     4,908,594
     2,080,161
     250,275
     30,573,369
     643,027,970Disposals
     (41,806,788)
     (1,813,408)
     (4,534)
     (5,327,237)
     (3,032,482)
     (381,790)
     (609,457)
     -
     (1,203,074)
     (54,178,770)Depreciation Expense
     -
     -
     (16,227,332)
     (287,352,179)
     (6,401,108)
     (3,281,043)
     (815,823)
     (183,636)
     (16,284,336)
     (330,545,457)Foreign Currency Translation Differences
     42,782,214
     8,717,949
     106,765,473
     422,151,835
     2,977,427
     1,335,842
     532,554
     (55,347)
     34,995,269
     620,203,216Other Increases (Decreases)
     (223,240,418)
     1,074,922
     101,723,672
     185,874,173
     (2,080,906)
     (10,711,797)
     (780,052)
     821,688
     (50,253,376)
     2,427,906Total Changes
     275,507,212
     10,447,430
     196,464,670
     409,470,393
     (1,892,861)
     (8,130,194)
     407,383
     832,980
     (2,172,148)
     880,934,865Closing Balance at December 31, 2008
     704,106,532
     107,263,181
     635,062,398
     5,523,897,707
     17,959,471
     24,495,712
     4,152,102
     1,916,796
     196,938,232
     7,215,792,131
   Additional information in Property, Plant and Equipment:  a)Main Investments.  Material investments in the electricity generation business include developments in the program to create new capacity.  In Chile, stands out among other projects the construction of the Bocamina II Coal-fired Thermoelectric Power Plant with capacity of 370 MW. The project Central Térmica Quintero, consisting primarily of an open-cycle plant will operate similarly as GNL with a diesel fuel plant with capacity of 257 MW. Such project has been finalized and put into operation on September 2009. The Canela II Wind Park Expansion project with 40 wind generators with 60 MW capacity, has been finalized and put in operation on December 2009, reinforcing Endesa Chile's commitment to the environment by developing non-conventional renewable energies (NCREs).  In Peru, the Santa Rosa Open Cycle Thermoelectric Power Plant, with a capacity of 200 MW. This plant will operate using natural gas from Camisea. This project was completed and put in operation s in September 2009.   F - 63


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b)Finance leases  As of December 31, 2009 and 2008, property, plant and equipment includes ThCh$137,586,941 and ThCh$141,091,265, respectively, relating to leased assets under finance leases.  The present value of future minimum lease payments derived from these finance leases is as follows:  12-31-2009
     12-31-2008Gross 
ThCh$
     Interest 
ThCh$
     Present 
Value ThCh$
     Gross ThCh$
     Interest 
ThCh$
     Present 
Value ThCh$Less than one year
     14,606,088
     3,253,227
     11,352,861
     9,538,867
     1,715,433
     7,823,434Between 1 and 5 years
     57,745,294
     12,162,349
     45,582,945
     63,658,939
     4,289,995
     59,368,944More than 5 years
     48,383,017
     7,089,994
     41,293,023
     53,025,710
     6,032,776
     46,992,934Total
     120,734,399
     22,505,570
     98,228,829
     126,223,516
     12,038,204
     114,185,312
  Leased assets relates to:  1.Lease agreement for Electric Transmission Lines and Installations (Ralco-Charrúa 2X220 KV) entered into Endesa Chile and Abengoa Chile S.A The lease agreement has a 20-year maturity and bears interest at an annual rate of 6.5%.  2.Lease agreements to finance the project of converting the Ventanilla thermo-electrical plant to a combined cycle plant entered into Edegel S.A. and the financial institutions Banco de Crédito del Perú and BBVA - Banco Continental. These agreements has an 8-year maturity and bears interest at an annual rate of Libor + 3.0% and Libor +2.5%, respectively.  c)Operating leases  As of December 31, 2009 and 2008 total payments recognized as an expense from operating leases totaled ThCh$13,160,909 and ThCh$15,312,905, respectively.  As of December 31, 2009 and 2008 the total future minimum lease payments under non-cancellable operating leases is as follows:  12-31-2009
     12-31-2008ThCh$
     ThCh$Less than one year
     4,441,719
     14,910,341Between 1 and 5 years
     6,835,695
     3,982,855More than 5 years
     7,166,850
     14,376,703Total
     18,444,264
     33,269,899
   d)Other information  i)As of December 31, 2009 and 2008, the Group had contractual commitments for the acquisition of property, plant and equipment amounting to ThCh$334,581,961 and ThCh$348,984,515, respectively.  ii)As of December 31, 2009 and 2008, the Group property, plant and equipment pledged as security for liabilities amounting to ThCh$462,772,688 and ThCh$497,505,685, respectively (see Note 36).  iii)The Company and its foreign subsidiaries have all carry risk, earthquake, machinery breakdown and damages for business interruption insurance policies with a ThUS$200,000 limit in the case of generating companies and a ThUS$30,000 limit for distribution companies. The premiums associated with these policies are presented under line item Prepayments within assets and are recognized in the income statement over the term of the insurance policy.   F - 64


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iv)GasAtacama, in which Endesa Chile has a 50% interest consolidated using the proportional integration method, has, among other assets, a combined-cycle electricity generation plant in northern Chile. As importing natural gas from neighboring countries was not possible, GasAtacama has been forced to generate electricity using alternative fuels, the cost of which significantly increased during the final months of 2007 due to increases in oil prices. As a result, the company filed lawsuits for early termination of a contract with distributor Emel. On January 25, 2008, a ruling was issued in arbitration proceedings on this matter to deny early termination. This situation significantly reduced the recoverable value of the aforementioned plant and, therefore, as of December 31, 2007, an impairment provision of US$ 110 million was recorded.  v)The current situation regarding long-lived assets, mostly plants and infrastructure constructed with the purpose of providing energy resources for the SIC system from year 1998, has changed, principally due to the installation of new thermal plants in the SIC, the arrival of GNL, and the estimated development of new projects. This situation has created an environment of excess supply for future years resulting in the expectation that some of these assets will not be used. Accordingly, at December 31, 2009 the Company has recorded an impairment provision for these assets for ThCh$ 43,999,600.  vi)Companhia De Interconexão Energética (CIEN) sells electricity in Argentina and Brazil. Because of the reduction in the maximum availability of the generation and physical guarantee of energy and its associated power, the Company is focusing its business on a different compensation structure that is not based on the purchase and sale of energy between the countries.  Given the strategic importance of the Companys assets in the relations between Brazil and Argentina, the Brazilian government has been presented with a new business plan model changing its selling activity to an electricity transmission activity with payment of a fixed compensation, which is in the process of being approved. This new plan involves integrating its transmission lines with the Brazilian transmission grid operated by the Brazilian Government.  During the prior and current year, the Argentinean and Uruguayan governments, formalized payments of usage charges with the Company for conveying energy between the two countries. Management considers that this situation further emphasizes the importance of the application made to the Brazilian Government to approve the new business plan and considers that it will probably be approved. Based on its estimates on the different business alternatives, CIENs management considers that it will not have any problems in recovering all its net assets.    F - 65


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16.INVESTMENT PROPERTIES  The detail of the composition of, and changes in, investment property during 2009 and 2008 is as follows:  Investment Properties
     ThCh$Opening Balance at January 1, 2008
     28,504,034Additions
     6,079,060Disposals
     (8,190,386)Depreciation Expense
     (24,027)Balance at December 31, 2008
     26,368,681Additions
     5,063,418Disposals
     (2,985,275)Depreciation Expense
     (24,029)Impairment Losses Reversed Recognized in Consolidated Statement of Comprehensive Income(*)
     2,809,044Closing Balance Investment Property at December 31, 2009
     31,231,839
   (*) Impairment losses reversed are presented in line item Gain (loss) on sale of non-current assets not held for sale in the consolidated statement of comprehensive income. See Note 32.  The fair value of the Groups investment properties as of December 31, 2009 and 2008 was ThCh$34,921,883 and ThCh$34,575,076, respectively, and was determined on the basis of valuations carried out by internal valuers.  The selling price of investment properties disposed of in 2009 and 2008 was ThCh$7,369,162 and ThCh$10,733,288, respectively.  The amounts recognized in profit or loss as direct operating expenses arising from investment properties were not significant.  The Group has insurance policies to cover operational risks of its investment properties, as well as to cover legal claims against the Group that could potentially arise from exercising its business activity. The Groups management considers that the insurance policies coverage are sufficient against the risks involved.  17.DEFERRED TAX a)The deferred taxes recognized by temporary differences as of December 31, 2009 and 2008 are as follows:  Deferred Tax Assets
     Deferred Tax LiabilitiesTemporary Differences
     12-31-2009
     12-31-2008
     12-31-2009
     12-31-2008ThCh$
     ThCh$
     ThCh$
     ThCh$Deferred Tax Relating to Depreciation
     112,732,337
     144,937,386
     511,370,845
     567,525,469Deferred Tax Relating to Amortization
     -
     -
     8,226,527
     9,104,066Deferred Tax Relating to Accruals
     7,805,157
     8,667,039
     27,169,053
     32,217,089Deferred Tax Relating to Provisions
     143,783,859
     119,683,835
     5,799,412
     956,270Deferred Tax Relating to Foreign Exchange Contracts
     29,199,072
     24,169,737
     2,919,974
     226,158Deferred Tax Relating to Post-employment benefit obligations
     27,080,973
     22,290,187
     1,391,382
     1,243,630Deferred Tax Relating to Revaluations of Financial Instruments
     34,574,100
     393,823
     293,219
     -Deferred Tax Relating to Tax Losses
     64,935,086
     115,543,640
     -
     -Deferred Tax Relating to Others
     34,785,937
     75,615,021
     15,878,885
     23,740,649Total
     454,896,521
     511,300,668
     573,049,297
     635,013,331
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b)The following table sets forth the changes in deferred taxes in the Consolidated Statement of Financial Position during 2009 and 2008:  Deferred Tax Movements
     Assets
     LiabilitiesThCh$
     ThCh$Balance at January 01, 2008
     541,265,109
     589,952,913Increase (Decrease) in Profit or Loss
     (44,614,329)
     21,371,543Increase (Decrease) in Equity
     (1,810,634)
     (1,473,154)Foreign Currency Translation
     18,804,713
     25,162,029Other Increase (Decrease)
     (2,344,191)
     -Balance at December 31, 2008
     511,300,668
     635,013,331Increase (Decrease) in Profit or Loss
     (41,820,393)
     (20,683,609)Increase (Decrease) in Equity
     6,628,427
     9,440,909Foreign Currency Translation
     (16,112,600)
     (47,324,914)Other Increase (Decrease)
     (5,099,581)
     (3,396,420)Balance at December 31, 2009
     454,896,521
     573,049,297
  Deferred tax assets have been recognized to the extent that it is probable that taxable profits will be available against which the deductible temporary differences can be utilized. The management of the Group considers that taxable profits will be available to be utilized.  c)As of December 31, 2009 and 2008, the Group has not recognized deferred tax assets related to tax losses totaled ThCh$ 24,643,223 and ThCh$ 34,424,576, respectively. The unrecognized tax losses can be carried forward indefinitely.  The Group has not recognized deferred tax liabilities for taxable temporary differences associated with investment in subsidiaries, associates, and jointly controlled entities, as is able to control the timing of the reversal of the temporary differences and considers that it is probable that such temporary differences will not reverse in the foreseeable future. The aggregate amount of taxable temporary differences associated with investments in subsidiaries, associates, and jointly controlled entities, for which deferred tax liabilities have not been recognized totaled ThCh$931,081,512 as of December 31, 2009.  The Group is potentially subject to income tax audits by the tax authorities of each country in which the Group operates. Such tax audits can be performed until the applicable statute of limitation expire. Tax audits by their nature are often complex and could require several years to complete. The following table sets forth a summary of tax years, potentially subject to examination, in the significant tax jurisdictions in which the Group operates:  Country
     PeriodChile
     2003-2009Argentina
     2002-2009Brazil
     2005-2009Colombia
     2003-2009Peru
     2004-2009
  As no tax system can foresee and make provisions for every complex transaction in which an entity may engage. Accordingly, application of the tax rules to complicated transactions is sometimes open to interpretation by financial statement preparers and tax authorities. The tax authorities may, through income tax audits, challenge positions that an entity takes in determining its current income tax expense and may require further tax liabilities. However, the management of the Group believes that tax liabilities, if any, that might arise from such income tax audits will not have a significant effect on the future profit or loss of the Group.   F - 67


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The effect of deferred taxes of components of other comprehensive income for the years 2009 and 2008 are as follows:  Deferred tax effects of components of other comprehensive income
     Balance at 12-31-2009
     Balance at 12-31-2008Amount Before Tax
     Income Tax Expense (Benefit)
     Amount After Tax
     Amount Before Tax
     Income Tax Expense (Benefit)
     Amount After TaxThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$Available-for-Sale Financial Assets
     38,826
     (6,692)
     32,134
     458
     (1)
     457Cash Flow Hedge
     112,011,539
     (19,893,268)
     92,118,271
     (170,435,599)
     24,517,704
     (145,917,895)Foreign currency translation
     (80,352,490)
     -
     (80,352,490)
     84,462,951
     -
     84,462,951Share of other comprehensive income (loss) of associates
     (10,387,426)
     1,064,436
     (9,322,990)
     128,445
     -
     128,445Actuarial income on defined benefit pension plans
     (8,065,153)
     2,303,295
     (5,761,858)
     (18,340,596)
     5,241,539
     (13,099,057)Other Adjustments to Equity
     (1,891,776)
     (45,315)
     (1,937,091)
     -
     -
     -Total
     11,353,520
     (16,577,544)
     (5,224,024)
     (104,184,341)
     29,759,242
     (74,425,099)
    18.INTEREST-BEARING LOANS  a)Current and non-current portion of interest-bearing loans as of December 31, 2009, December 31, 2008, and January 1, 2008 is as follows:   12-31-2009
     12-31-2008
     01-01-2008Classes of Interest-Bearing Loans
     Current
     Non-Current
     Current
     Non-Current
     Current
     Non-CurrentThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$Bank Loans
     381,345,601
     862,052,840
     570,871,358
     1,230,967,938
     348,668,407
     1,041,480,725Unsecured obligations
     228,951,828
     2,257,547,764
     605,039,356
     2,378,421,245
     347,937,977
     2,137,722,847Secured obligations
     11,023,415
     28,559,670
     -
     -
     -
     -Finance Leases
     11,352,861
     86,875,968
     7,823,434
     106,361,878
     7,337,715
     57,841,980Other Loans
     88,837,615
     88,869,955
     89,231,185
     109,595,299
     31,471,158
     132,529,527Total
     721,511,320
     3,323,906,197
     1,272,965,333
     3,825,346,360
     735,415,257
     3,369,575,079
   b)Bank Loans by currency and contractual maturity as of December 31, 2009, December 31, 2008, and January 1, 2008, is as follows:  Summary of Bank Loans by currency and maturity  12-31-2009  Country
     Currency
     Type of
Amortization
     Nominal Rate
     Secured/ Unsecured
     Current
     Non-CurrentMaturity
     Total Current of 12/31/2009
     Maturity
     Total Non-Current of 12/31/2009Unde-
termined
     Up to One Month
     One to
Three
Months
     Three to twelve Months
     One to Five Years
     Five Years
or moreThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$Chile
     US$
     Semi-annually
     2.23%
     Unsecured
     -
     -
     370,984
     158,998,362
     159,369,346
     104,732,133
     103,405,424
     208,137,557Peru
     US$
     Quarterly
     5.12%
     Unsecured
     -
     -
     11,446,321
     6,188,337
     17,634,658
     13,297,208
     11,561,913
     24,859,121Peru
     Soles
     Quarterly
     4.38%
     Unsecured
     -
     -
     8,715,418
     -
     8,715,418
     42,167,699
     -
     42,167,699Argentina
     US$
     Semi-annually
     8.70%
     Unsecured
     -
     -
     8,324,583
     13,621,109
     21,945,692
     36,113,536
     -
     36,113,536Argentina
     Ar$
     Semi-annually
     15.94%
     Unsecured
     -
     -
     5,895,705
     7,195,591
     13,091,296
     18,960,874
     -
     18,960,874Colombia
     CPs
     Semi-annually
     12.92%
     Unsecured
     -
     -
     744,192
     9,592,842
     10,337,034
     -
     75,661,785
     75,661,785Brazil
     US$
     Semi-annually
     6.04%
     Unsecured
     -
     -
     5,424,269
     4,375,237
     9,799,506
     10,955,906
     42,102,033
     53,057,939Brazil
     R$
     Semi-annually
     11.21%
     Unsecured
     -
     -
     925,256
     139,527,395
     140,452,651
     227,224,494
     175,869,835
     403,094,329Total
     -
     -
     41,846,728
     339,498,873
     381,345,601
     453,451,850
     408,600,990
     862,052,840
   F - 68


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Table of Contents


12-31-2008  Country
     Currency
     Type of
Amortization
     Nominal
rate
     Secured/
Unsecured
     Current
     Non-CurrentMaturity
     Total Current of 12/31/2008
     Maturity
     Total Non-Current of 12/31/2008Unde-termined
     Up to
One
Month
     One to
Three
Months
     Three
to twelve
Months
     One
to Five
Years
     Five Years
or moreThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$Chile
     US$
     Semi-annually
     2.56%
     Unsecured
     -
     -
     1,236,634
     100,366,113
     101,602,747
     344,742,110
     134,504,952
     479,247,062Chile
     CH$
     Semi-annually
     12.43%
     Unsecured
     -
     -
     -
     46,509,607
     46,509,607
     -
     1,316,483
     1,316,483Peru
     US$
     Quarterly
     5.79%
     Unsecured
     -
     -
     3,184,277
     38,431,273
     41,615,550
     -
     42,424,463
     42,424,463Peru
     Soles
     Quarterly
     7.91%
     Unsecured
     -
     -
     8,116,695
     7,609,262
     15,725,957
     26,599,962
     -
     26,599,962Argentina
     US$
     Semi-annually
     7.85%
     Unsecured
     -
     -
     14,092,130
     29,398,920
     43,491,050
     52,588,321
     -
     52,588,321Argentina
     Ar$
     Semi-annually
     11.98%
     Unsecured
     -
     -
     2,868,019
     15,491,811
     18,359,830
     2,510,699
     1,255,471
     3,766,170Colombia
     CPs
     Semi-annually
     13.78%
     Unsecured
     -
     -
     61,228,992
     42,904,261
     104,133,253
     -
     86,523,390
     86,523,390Brazil
     US$
     Semi-annually
     6.96%
     Unsecured
     -
     -
     -
     6,181,302
     6,181,302
     2,412,900
     15,911,248
     18,324,148Brazil
     R$
     Semi-annually
     5.62%
     Unsecured
     -
     -
     1,244,205
     192,007,857
     193,252,062
     207,360,052
     312,817,887
     520,177,939Total
     -
     -
     91,970,952
     478,900,406
     570,871,358
     636,214,044
     594,753,894
     1,230,967,938
  01-01-2008  Country
     Currency
     Type of
Amortization
     Nominal Rate
     Secured/ Unsecured
     Current
     Non-CurrentMaturity
     Total Current of
01/01/2008
     Maturity
     Total Non-Current of
01/01/2008Unde-termined
     Up to
One
Month
     One to
Three
Months
     Three to
Twelve
Months
     One to
Five
Years
     Five Years
or moreThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$Chile
     US$
     Semi-annually
     3.97%
     Unsecured
     -
     -
     3,581,560
     49,075,476
     52,657,036
     220,402,717
     74,312,626
     294,715,343Peru
     US$
     Quarterly
     4.39%
     Unsecured
     -
     -
     124,672
     16,398,362
     16,523,034
     12,923,615
     23,021,791
     35,945,406Peru
     Soles
     Quarterly
     5.88%
     Unsecured
     -
     -
     48,398,052
     18,077,771
     66,475,823
     -
     -
     -Argentina
     US$
     Semi-annually
     7.90%
     Unsecured
     -
     -
     1,558,561
     15,710,553
     17,269,114
     67,038,260
     4,057,264
     71,095,524Argentina
     Ar$
     Semi-annually
     1.75%
     Unsecured
     -
     -
     1,082,226
     921,452
     2,003,678
     2,488,790
     2,488,790
     4,977,580Colombia
     CPs
     Semi-annually
     12.95%
     Unsecured
     -
     -
     67,943,027
     24,736,084
     92,679,111
     -
     75,222,830
     75,222,830Brazil
     US$
     Semi-annually
     7.08%
     Unsecured
     -
     -
     -
     36,625,803
     36,625,803
     10,535,788
     56,878,470
     67,414,258Brazil
     R$
     Semi-annually
     10.86%
     Unsecured
     -
     -
     -
     64,434,808
     64,434,808
     200,130,551
     291,979,233
     492,109,784Total
     -
     -
     122,688,098
     225,980,309
     348,668,407
     513,519,721
     527,961,004
     1,041,480,725
  The fair value of current and non-current bank borrowings totaled ThCh$1,307,770,461 and ThCh$1,954,779,024 as of December 31, 2009 and 2008, respectively.   F - 69


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Table of Contents


-Identification of Bank Borrowings by Companies  Company
     Financial
     Currency
     Nominal
     Type
     December 31, 2009
     December 31, 2008
     January 1, 2008Institution
     
     Interest rate
     of
     Current
     
     Non-
Current
     
     Current
     Non-
Current
     Current
     Non-
CurrentAmortization
     Less
than
90 days
     More
than
90 days
     Current,
Total
     1 to 5
years
     Over 10
Years
     Non-
Current,
Total
     Less
than
90 days
     More
than
90 days
     Current,
Total
     1 to 5
years
     Over
10 Years
     Non-
Current,
Total
     Less
than
90 days
     More
than
90 days
     Current,
Total
     1 to 5
years
     Over 10
Years
     Non-
Current,
TotalAmpla
     Banco Itaú
     R$
     13.76%
     Semi-annually
     -
     780,505
     780,505
     2,319,872
     777,600
     3,097,472
     -
     -
     -
     -
     -
     -
     -
     -
     -
     748,996
     2,995,984
     3,744,980Ampla
     Unibanco
     R$
     13.82%
     Semi-annually
     -
     821,168
     821,168
     2,311,183
     774,687
     3,085,870
     -
     -
     -
     -
     -
     -
     -
     -
     -
     22,859,962
     2,984,762
     25,844,724Ampla
     Banco Alfa
     R$
     13.56%
     Semi-annually
     -
     3,822,187
     3,822,187
     13,032,988
     4,368,539
     17,401,527
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     19,636,596
     19,636,596Ampla
     Banco Pactual
     R$
     17.57%
     Semi-annually
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     9,389,575
     -
     9,389,575Ampla
     Bradesco
     R$
     13.72%
     Semi-annually
     -
     2,419,186
     2,419,186
     24,041,519
     8,058,497
     32,100,016
     -
     -
     -
     -
     -
     -
     -
     -
     -
     19,315,457
     9,817,964
     29,133,421Ampla
     Votorantim
     R$
     13.58%
     At Maturity
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     28,052,280
     -
     28,052,280Ampla
     Banco Do Brasil
     R$
     13.58%
     At Maturity
     -
     235,626
     235,626
     -
     29,002,545
     29,002,545
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     28,052,280
     28,052,280Ampla
     Banco Hsbc
     R$
     13.47%
     Semi-annually
     -
     270,019
     270,019
     32,582,471
     10,921,346
     43,503,817
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     42,078,420
     42,078,420Ampla
     Bndes
     R$
     12.12%
     Monthly
     -
     34,048,849
     34,048,849
     35,333,342
     -
     35,333,342
     -
     -
     -
     -
     -
     -
     -
     37,494,270
     37,494,270
     46,670,733
     19,446,238
     66,116,971CAM Argentina
     Banco Itaú
     Ar$
     2.92%
     Semi-annually
     -
     -
     -
     -
     -
     -
     1,516,755
     -
     1,516,755
     -
     -
     -
     -
     -
     -
     -
     -
     -CAM Argentina
     Banco Santander
Rio
     Ar$
     16.00%
     Monthly
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -CAM Brasil Ltda.
     Bndes
     R$
     11.25%
     Monthly
     -
     -
     -
     -
     -
     -
     579
     1,543
     2,122
     2,179
     -
     2,179
     -
     -
     -
     -
     -
     -CAM Brasil Ltda.
     Bndes
     R$
     11.25%
     Monthly
     -
     -
     -
     -
     -
     -
     1,738
     5,215
     6,953
     6,897
     -
     6,897
     -
     -
     -
     -
     -
     -CAM Brasil Ltda.
     Unibanco
     R$
     14.75%
     Semi-annually
     -
     -
     -
     -
     -
     -
     424,764
     817,203
     1,241,967
     1,089,345
     -
     1,089,345
     -
     4,767,885
     4,767,885
     -
     -
     -CAM Brasil Ltda.
     Itaú
     R$
     15.00%
     Annual
     -
     -
     -
     -
     -
     -
     -
     272,336
     272,336
     -
     -
     -
     -
     -
     -
     -
     -
     -CAM Brasil Ltda.
     Votorantim
     R$
     13.60%
     Monthly
     -
     -
     -
     -
     -
     -
     408,562
     -
     408,562
     -
     -
     -
     -
     -
     -
     -
     -
     -CAM Brasil Ltda.
     Votorantim
     R$
     13.60%
     Monthly
     -
     -
     -
     -
     -
     -
     408,562
     -
     408,562
     -
     -
     -
     -
     -
     -
     -
     -
     -CAM Brasil Ltda.
     Bndes
     R$
     11.85%
     Monthly
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -CAM Brasil Ltda.
     Bndes
     R$
     11.85%
     Monthly
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -CAM Brasil Ltda.
     Unibanco
     R$
     14.77%
     Semi-annually
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -CAM Brasil Ltda.
     Itaú
     R$
     15.53%
     Annual
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -CAM Brasil Ltda.
     Votorantim
     R$
     14.44%
     Monthly
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -CAM Brasil Ltda.
     Votorantim
     R$
     14.44%
     Monthly
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -CAM Brasil Ltda.
     Votorantim
     R$
     14.44%
     Bi-monthly
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -CDSA
     Bndes
     R$
     14.44%
     Monthly
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     561,046
     561,046
     -
     -
     -Celta
     Banesto
     US$
     6.83%
     Semi-annually
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     2,047,648
     -
     2,047,648
     -
     -
     -CGTF Fortaleza
     IFC - A
     US$
     7.89%
     Semi-annually
     2,134,813
     -
     2,134,813
     4,238,891
     15,484,474
     19,723,365
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -CGTF Fortaleza
     IFC - B
     US$
     2.98%
     Semi-annually
     3,270,587
     -
     3,270,587
     6,717,015
     12,843,149
     19,560,164
     -
     -
     -
     -
     -
     -
     -
     3,927,319
     3,927,319
     10,535,788
     38,264,660
     48,800,448CGTF Fortaleza
     IFC - C
     US$
     11.96%
     Semi-annually
     18,869
     -
     18,869
     -
     3,549,700
     3,549,700
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Chilectra S.A.
     Banco Corpbanca
     CH$
     11.60%
     Semi-annually
     -
     -
     -
     -
     -
     -
     -
     2,001,289
     2,001,289
     -
     -
     -
     -
     -
     -
     -
     -
     -Chilectra S.A.
     Banco Corpbanca
     CH$
     14.76%
     Semi-annually
     -
     -
     -
     -
     -
     -
     -
     5,190,650
     5,190,650
     -
     -
     -
     -
     -
     -
     -
     -
     -Chilectra S.A.
     Banco Corpbanca
     CH$
     14.02%
     Semi-annually
     -
     -
     -
     -
     -
     -
     -
     5,181,087
     5,181,087
     -
     -
     -
     -
     -
     -
     -
     -
     -Chinango
     Banco Continental
     Soles
     4.60%
     At Maturity
     19,996
     -
     19,996
     5,156,948
     -
     5,156,948
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Chinango
     Banco Continental
     US$
     3.21%
     At Maturity
     1,028,759
     -
     1,028,759
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Chinango
     Banco Continental
     US$
     3.52%
     At Maturity
     15,962
     1,014,199
     1,030,161
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Chinango
     Banco Continental
     US$
     4.12%
     At Maturity
     27,890
     1,521,300
     1,549,190
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Chinango
     Banco Continental
     Soles
     3.80%
     At Maturity
     1,228
     -
     1,228
     1,403,251
     -
     1,403,251
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Cam
     Banco Santander
     US$
     4.04%
     Quarterly
     -
     -
     -
     -
     -
     -
     103,484
     -
     103,484
     -
     -
     -
     484,538
     -
     484,538
     -
     -
     -CIEN
     Santander
     R$
     11.30%
     Semi-annually
     -
     58,453,666
     58,453,666
     116,494,360
     -
     116,494,360
     -
     -
     -
     -
     -
     -
     -
     2,244,182
     2,244,182
     56,104,512
     112,086,636
     168,191,148Codensa
     Banco de Crédito
     CPs
     14.62%
     At Maturity
     -
     -
     -
     -
     -
     -
     11,526,716
     -
     11,526,716
     -
     -
     -
     10,322,836
     -
     10,322,836
     -
     -
     -Codensa
     BBVA Colombia
     CPs
     15.18%
     At Maturity
     -
     -
     -
     -
     -
     -
     49,702,276
     -
     49,702,276
     -
     -
     -
     46,791,812
     -
     46,791,812
     -
     -
     -Codensa
     Colmena
     CPs
     11.95%
     At Maturity
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     4,984,894
     -
     4,984,894
     -
     -
     -
   F - 70


---



Table of Contents


-Identification of Bank Borrowings by Companies (continued)  Company
     Financial
     Currency
     Nominal
     Type
     December 31, 2009
     December 31, 2008
     January 1, 2008Institution
     
     Interest Rate
     of
     Current
     Non-
Current
     Current
     Non-
Current
     Current
     Non-
CurrentAmortization
     Less
than
90 days
     More
than
90 days
     Current,
Total
     1 to 5
years
     Over 10
Years
     Non-
Current,
Total
     Less
than
90 days
     More
than
90 days
     Current,
Total
     1 to 5
years
     Over
10 Years
     Non-
Current,
Total
     Less
than
90 days
     More
than
90 days
     Current,
Total
     1 to 5
years
     Over 10
Years
     Non-
Current,
TotalCodensa
     ABN AMRO Bank
     CPs
     12.15%
     At Maturity
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     5,843,485
     -
     5,843,485
     -
     -
     -Coelce
     Banco do Brasil
     US$
     6.67%
     Semi-annually
     -
     170,373
     170,373
     -
     1,773,044
     1,773,044
     -
     -
     -
     -
     -
     -
     -
     6,576,115
     6,576,115
     -
     2,050,902
     2,050,902Coelce
     BEI
     US$
     6.58%
     Semi-annually
     -
     4,204,864
     4,204,864
     -
     7,580,248
     7,580,248
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Coelce
     Eletrobras
     R$
     6.58%
     Semi-annually
     -
     4,036,238
     4,036,238
     -
     21,634,459
     21,634,459
     -
     -
     -
     -
     -
     -
     -
     2,570,905
     2,570,905
     16,147,468
     -
     16,147,468Coelce
     Banco do Brasil
     R$
     10.75%
     Semi-annually
     -
     3,499,199
     3,499,199
     -
     11,672,734
     11,672,734
     -
     -
     -
     -
     -
     -
     -
     1,959,384
     1,959,384
     -
     14,213,529
     14,213,529Coelce
     BNDES
     R$
     9.95%
     Semi-annually
     -
     10,629,530
     10,629,530
     -
     37,630,530
     37,630,530
     -
     -
     -
     -
     -
     -
     -
     7,913,033
     7,913,033
     -
     -
     -Coelce
     Banco do Nordeste
     R$
     8.50%
     Semi-annually
     -
     11,815,731
     11,815,731
     -
     37,047,536
     37,047,536
     -
     -
     -
     -
     -
     -
     -
     3,972,149
     3,972,149
     -
     40,666,824
     40,666,824Coelce
     Banco ABN Amro
     R$
     7.00%
     Semi-annually
     -
     7,294,354
     7,294,354
     -
     13,981,362
     13,981,362
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Coelce
     Unibanco
     US$
     12.75%
     Monthly
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     20,213,663
     20,213,663
     -
     -
     -Coelce
     BNDES
     US$
     5.50%
     Monthly
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     1,152,278
     1,152,278
     -
     -
     -Coelce
     Banco Europeu
     US$
     5.49%
     Monthly
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     4,756,428
     4,756,428
     -
     16,562,908
     16,562,908Coelce
     Unibanco
     R$
     12.75%
     Monthly
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     2,951,954
     2,951,954
     -
     -
     -Edegel
     Banco de Crédito
     US$
     5.70%
     At Maturity
     5,072,753
     -
     5,072,753
     -
     -
     -
     -
     6,368,554
     6,368,554
     -
     -
     -
     -
     1,491,167
     1,491,167
     -
     -
     -Edegel
     Banco de Crédito
     US$
     7.19%
     Quarterly
     3,681,430
     -
     3,681,430
     -
     11,561,913
     11,561,913
     -
     6,368,554
     6,368,554
     -
     -
     -
     -
     1,988,223
     1,988,223
     -
     -
     -Edegel
     Banco Continental
     US$
     3.97%
     Quarterly
     1,619,527
     -
     1,619,527
     7,820,494
     -
     7,820,494
     -
     1,592,747
     1,592,747
     -
     11,855,402
     11,855,402
     -
     1,486,689
     1,486,689
     -
     10,496,053
     10,496,053Edegel
     Banco Scotiabank
     US$
     3.08%
     Semi-annually
     -
     3,652,838
     3,652,838
     5,476,714
     -
     5,476,714
     -
     4,585,278
     4,585,278
     -
     12,879,026
     12,879,026
     -
     3,628,490
     3,628,490
     -
     12,525,738
     12,525,738Edegel
     Banco Continental
     Soles
     4.28%
     At Maturity
     13,155
     -
     13,155
     2,631,096
     -
     2,631,096
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Edegel
     Banco Continental
     Soles
     4.40%
     At Maturity
     25,609
     -
     25,609
     5,262,192
     -
     5,262,192
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Edegel
     Banco Continental
     Soles
     4.30%
     At Maturity
     27,189
     -
     27,189
     5,086,786
     -
     5,086,786
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Edegel
     Banco Scotiabank
     US$
     5.95%
     At Maturity
     -
     -
     -
     -
     -
     -
     -
     2,547,422
     2,547,422
     -
     -
     -
     -
     1,988,223
     1,988,223
     -
     -
     -Edegel
     Banco Westlb
     US$
     5.50%
     Quarterly
     -
     -
     -
     -
     -
     -
     -
     10,600,164
     10,600,164
     -
     -
     -
     -
     -
     -
     7,953,058
     -
     7,953,058Edegel
     Banco Continental
     Soles
     6.60%
     At Maturity
     -
     -
     -
     -
     -
     -
     -
     78,814
     78,814
     11,958,775
     -
     11,958,775
     -
     9,785,216
     9,785,216
     -
     -
     -Edegel
     Banco de Crédito
     US$
     9.59%
     Quarterly
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     17,690,035
     17,690,035
     -
     -
     -
     -
     -
     -Edegel
     Banco Citibank
     US$
     7.12%
     At Maturity
     -
     -
     -
     -
     -
     -
     3,184,277
     -
     3,184,277
     -
     -
     -
     -
     -
     -
     -
     -
     -Edegel
     Banco Citibank
     US$
     5.00%
     Semi-annually
     -
     -
     -
     -
     -
     -
     -
     6,368,554
     6,368,554
     -
     -
     -
     -
     4,970,557
     4,970,557
     4,970,557
     -
     4,970,557Edegel
     Banco de Crédito
     US$
     6.02%
     At Maturity
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     845,013
     845,013
     -
     -
     -Edegel
     Banco Scotiabank
     Soles
     6.55%
     At Maturity
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     8,292,555
     8,292,555
     -
     -
     -Edegel
     Banco de Crédito
     Soles
     5.90%
     At Maturity
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     4,378,469
     -
     4,378,469
     -
     -
     -Edegel
     Banco de Crédito
     Soles
     5.90%
     At Maturity
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     5,659,668
     -
     5,659,668
     -
     -
     -Edelnor
     Banco de Crédito
     Soles
     2.60%
     At Maturity
     5,252,955
     -
     5,252,955
     -
     -
     -
     8,116,695
     -
     8,116,695
     -
     -
     -
     -
     -
     -
     -
     -
     -Edelnor
     Banco de Crédito
     Soles
     5.15%
     Semi-annually
     8,901
     -
     8,901
     2,631,096
     -
     2,631,096
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Edelnor
     Banco de Crédito
     Soles
     4.75%
     Semi-annually
     8,901
     -
     8,901
     2,631,096
     -
     2,631,096
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Edelnor
     Banco de Crédito
     Soles
     7.28%
     Semi-annually
     3,481
     -
     3,481
     2,280,283
     -
     2,280,283
     -
     3,873,127
     3,873,127
     -
     -
     -
     -
     -
     -
     -
     -
     -Edelnor
     Banco de Crédito
     Soles
     7.00%
     Semi-annually
     3,560
     -
     3,560
     1,052,438
     -
     1,052,438
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Edelnor
     Banco de Crédito
     Soles
     4.00%
     Semi-annually
     10,613
     -
     10,613
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Edelnor
     Banco de Crédito
     Soles
     4.00%
     Semi-annually
     14,835
     -
     14,835
     4,385,160
     -
     4,385,160
     -
     -
     -
     6,390,098
     -
     6,390,098
     11,231,138
     -
     11,231,138
     -
     -
     -
  F - 71


---



Table of Contents


-Identification of Bank Borrowings by Companies (continued)   Company
     Financial
     Currency
     Nominal
     Type
     December 31, 2009
     December 31, 2008
     January 1, 2008Institution
     
     Interest
Rate
     of
     Current
     Non-
Current
     Current
     Non-
Current
     Current
     Non-
CurrentAmortization
     Less
than
90 days
     More
than
90 days
     Current,
Total
     1 to 5
years
     Over 10
Years
     Non-
Current,
Total
     Less
than
90 days
     More
than
90 days
     Current,
Total
     1 to 5
years
     Over
10 Years
     Non-
Current,
Total
     Less
than
90 days
     More
than
90 days
     Current,
Total
     1 to 5
years
     Over 10
Years
     Non-
Current,
TotalEdelnor
     Banco de Crédito
     Soles
     4.00%
     Semi-annually
     8,901
     -
     8,901
     2,631,096
     -
     2,631,096
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Edelnor
     Banco Continental
     Soles
     4.40%
     Semi-annually
     109,098
     -
     109,098
     7,016,257
     -
     7,016,257
     -
     -
     -
     8,251,089
     -
     8,251,089
     12,309,835
     -
     12,309,835
     -
     -
     -Edelnor
     Scotiabank
     Soles
     4.35%
     At Maturity
     1,603,498
     -
     1,603,498
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Edelnor
     Scotiabank
     Soles
     4.35%
     At Maturity
     1,603,498
     -
     1,603,498
     -
     -
     -
     -
     3,657,321
     3,657,321
     -
     -
     -
     13,422,451
     -
     13,422,451
     -
     -
     -Edelnor
     Banco de Crédito
     US$
     4.75%
     At Maturity
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     124,672
     -
     124,672
     -
     -
     -Edelnor
     Interbank
     Soles
     5.72%
     At Maturity
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     1,363,323
     -
     1,363,323
     -
     -
     -Edelnor
     Banco de la Nación
     Soles
     5.15%
     At Maturity
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     33,168
     -
     33,168
     -
     -
     -EDESUR S.A.
     BBVA
     Ar$
     20.00%
     Semi-annually
     -
     1,334,474
     1,334,474
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -EDESUR S.A.
     Ciudad De Buenos Aires S.A.
     Ar$
     15.19%
     At Maturity
     -
     -
     -
     1,601,369
     -
     1,601,369
     -
     1,868,503
     1,868,503
     -
     -
     -
     -
     -
     -
     -
     -
     -EDESUR S.A.
     Standard
     Ar$
     17.43%
     Quarterly
     -
     -
     -
     2,001,711
     -
     2,001,711
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -EDESUR S.A.
     Santander Rio
     Ar$
     18.94%
     Quarterly
     -
     -
     -
     3,336,185
     -
     3,336,185
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -EDESUR S.A.
     BBVA
     Ar$
     20.00%
     Semi-annually
     -
     -
     -
     5,337,896
     -
     5,337,896
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -EDESUR S.A.
     Standard
     Ar$
     17.43%
     Quarterly
     -
     -
     -
     2,001,711
     -
     2,001,711
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -EDESUR S.A.
     Santander Rio
     Ar$
     17.80%
     Semi-annually
     -
     -
     -
     2,668,948
     -
     2,668,948
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -EDESUR S.A.
     Ciudad De Buenos Aires S.A.
     Ar$
     15.19%
     At Maturity
     -
     -
     -
     1,040,890
     -
     1,040,890
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -EDESUR S.A.
     Itau S.A. Ny Branch
     US$
     4.22%
     Semi-annually
     -
     -
     -
     -
     -
     -
     -
     1,923,626
     1,923,626
     7,641,639
     -
     7,641,639
     22,350
     -
     22,350
     5,969,307
     1,492,327
     7,461,634EDESUR S.A.
     Bayerische
     US$
     5.35%
     Semi-annually
     -
     -
     -
     -
     -
     -
     406,896
     3,283,596
     3,690,492
     -
     -
     -
     324,849
     307,792
     632,641
     307,792
     2,564,937
     2,872,729EDESUR S.A.
     Deutsche Bank
     US$
     5.12%
     Semi-annually
     -
     -
     -
     -
     -
     -
     2,657,506
     5,256,139
     7,913,645
     -
     -
     -
     8,698
     2,025,734
     2,034,432
     6,221,589
     -
     6,221,589Emgesa
     Davivienda
     CPs
     12.93%
     Annually
     -
     992,230
     992,230
     -
     7,826,033
     7,826,033
     -
     1,088,007
     1,088,007
     -
     8,949,497
     8,949,497
     -
     938,051
     938,051
     -
     7,780,630
     7,780,630Emgesa
     Bancolombia
     CPs
     12.93%
     Annually
     -
     710,761
     710,761
     -
     5,606,000
     5,606,000
     -
     779,369
     779,369
     -
     6,410,845
     6,410,845
     -
     671,951
     671,951
     -
     5,573,476
     5,573,476Emgesa
     Bancolombia
     CPs
     12.93%
     Annually
     -
     2,340,613
     2,340,613
     -
     18,461,158
     18,461,158
     -
     2,566,545
     2,566,545
     -
     21,111,344
     21,111,344
     -
     2,212,808
     2,212,808
     -
     18,354,055
     18,354,055Emgesa
     BBVA Colombia
     CPs
     12.93%
     Annually
     -
     2,594,904
     2,594,904
     -
     20,466,830
     20,466,830
     -
     335,358
     335,358
     -
     23,404,940
     23,404,940
     -
     2,453,214
     2,453,214
     -
     20,348,091
     20,348,091Emgesa
     Banco Santander
     CPs
     10.38%
     Semi-annually
     -
     2,954,334
     2,954,334
     -
     23,301,764
     23,301,764
     -
     257,586
     257,586
     -
     -
     -
     -
     1,320,603
     1,320,603
     -
     -
     -Emgesa
     BBVA Colombia
     CPs
     15.96%
     Semi-annually
     -
     -
     -
     -
     -
     -
     -
     14,650,645
     14,650,645
     -
     -
     -
     -
     -
     -
     -
     -
     -Emgesa
     Banco Santander
     CPs
     16.09%
     Semi-annually
     -
     -
     -
     -
     -
     -
     -
     11,722,599
     11,722,599
     -
     -
     -
     -
     -
     -
     -
     -
     -Emgesa
     Banco de Crédito
     CPs
     14.62%
     Semi-annually
     -
     -
     -
     -
     -
     -
     -
     2,855,358
     2,855,358
     -
     -
     -
     -
     -
     -
     -
     -
     -Emgesa
     Citibank
     CPs
     15.00%
     Semi-annually
     -
     -
     -
     -
     -
     -
     -
     8,569,590
     8,569,590
     -
     -
     -
     -
     -
     -
     -
     -
     -Emgesa
     Banco Santander
     CPs
     12.13%
     Semi-annually
     -
     -
     -
     -
     -
     -
     -
     79,204
     79,204
     -
     26,646,764
     26,646,764
     -
     2,793,017
     2,793,017
     -
     23,166,578
     23,166,578Emgesa
     Av Villas
     CPs
     12.13%
     Semi-annually
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     9,892,754
     9,892,754
     -
     -
     -Emgesa
     Banco de Bogotá
     CPs
     12.13%
     Semi-annually
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     4,453,686
     4,453,686
     -
     -
     -Endesa Brasil S.A.
     IFC
     R$
     12.75%
     Semi-annually
     -
     -
     -
     -
     -
     -
     -
     6,263,735
     6,263,735
     21,382,652
     38,801,056
     60,183,708
     -
     -
     -
     -
     -
     -Endesa Brasil S.A.
     Santander
     R$
     1.70%
     Semi-annually
     -
     -
     -
     -
     -
     -
     -
     1,634,018
     1,634,018
     92,594,204
     70,721,742
     163,315,946
     -
     -
     -
     -
     -
     -Endesa Brasil S.A.
     Banco Itaú
     R$
     13.76%
     Semi-annually
     -
     -
     -
     -
     -
     -
     -
     -
     -
     2,181,414
     1,454,276
     3,635,690
     -
     -
     -
     -
     -
     -Endesa Brasil S.A.
     Unibanco
     R$
     13.82%
     Semi-annually
     -
     -
     -
     -
     -
     -
     -
     25,891,736
     25,891,736
     2,173,244
     1,448,829
     3,622,073
     -
     -
     -
     -
     -
     -Endesa Brasil S.A.
     Banco Alfa
     R$
     13.56%
     Semi-annually
     -
     -
     -
     -
     -
     -
     -
     -
     -
     5,446,726
     13,616,815
     19,063,541
     -
     -
     -
     -
     -
     -Endesa Brasil S.A.
     Banco Pactual
     R$
     17.57%
     Semi-annually
     -
     -
     -
     -
     -
     -
     -
     11,972,347
     11,972,347
     -
     -
     -
     -
     -
     -
     -
     -
     -Endesa Brasil S.A.
     Bradesco
     R$
     13.72%
     Semi-annually
     -
     -
     -
     -
     -
     -
     -
     21,738,395
     21,738,395
     13,074,866
     17,794,453
     30,869,319
     -
     -
     -
     -
     -
     -Endesa Brasil S.A.
     Banco Do Brasil
     R$
     13.58%
     At Maturity
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     28,686,757
     28,686,757
     -
     -
     -
     -
     -
     -Endesa Brasil S.A.
     Banco Hsbc
     R$
     13.47%
     Half Yearly
     -
     -
     -
     -
     -
     -
     -
     -
     -
     20,425,223
     20,425,223
     40,850,446
     -
     -
     -
     -
     -
     -Endesa Brasil S.A.
     Bndes
     R$
     12.12%
     Monthly
     -
     -
     -
     -
     -
     -
     -
     34,257,587
     34,257,587
     48,438,629
     7,022,788
     55,461,417
     -
     -
     -
     -
     -
     -Endesa Brasil S.A.
     Banco do Brasil
     US$
     6.67%
     Semi-annually
     -
     -
     -
     -
     -
     -
     -
     244,006
     244,006
     2,412,900
     -
     2,412,900
     -
     -
     -
     -
     -
     -Endesa Brasil S.A.
     Banco Europeu
     US$
     5.49%
     Semi-annually
     -
     -
     -
     -
     -
     -
     -
     5,937,296
     5,937,296
     -
     15,911,248
     15,911,248
     -
     -
     -
     -
     -
     -Endesa Brasil S.A.
     Eletrobras
     R$
     6.58%
     Semi-annually
     -
     -
     -
     -
     -
     -
     -
     3,283,485
     3,283,485
     -
     15,568,376
     15,568,376
     -
     -
     -
     -
     -
     -Endesa Brasil S.A.
     Banco do Brasil
     R$
     10.75%
     Semi-annually
     -
     -
     -
     -
     -
     -
     -
     2,182,335
     2,182,335
     -
     52,467,766
     52,467,766
     -
     -
     -
     -
     -
     -
   F - 72


---



Table of Contents


i.Identification of Bank Borrowings by Companies (continued)   Company
     Financial
     Currency
     Nominal
     Type
     December 31, 2009
     December 31, 2008
     January 1, 2008Institution
     
     Interest
Rate
     of
     Current
     Non-
Current
     Current
     Non-
Current
     Current
     Non-
CurrentAmortization
     Less
than
90 days
     More
than
90 days
     Current,
Total
     1 to 5
years
     Over 10
Years
     Non-
Current,
Total
     Less
than
90 days
     More
than
90 days
     Current,
Total
     1 to 5
years
     Over
10 Years
     Non-
Current,
Total
     Less
than
90 days
     More
than
90 days
     Current,
Total
     1 to 5
years
     Over 10
Years
     Non-
Current,
TotalEndesa Brasil S.A.
     BNDES
     R$
     9.95%
     Semi-annually
     -
     -
     -
     -
     -
     -
     -
     452,611
     452,611
     -
     -
     -
     -
     -
     -
     -
     -
     -Endesa Brasil S.A.
     Banco do Nordeste
     R$
     8.50%
     Semi-annually
     -
     -
     -
     -
     -
     -
     -
     5,114,102
     5,114,102
     -
     44,809,806
     44,809,806
     -
     -
     -
     -
     -
     -Endesa Brasil S.A.
     Safra
     R$
     12.11%
     Semi-annually
     -
     -
     -
     -
     -
     -
     -
     35,450,002
     35,450,002
     -
     -
     -
     -
     -
     -
     -
     -
     -Endesa Brasil S.A.
     Santander
     R$
     12.11%
     Semi-annually
     -
     -
     -
     -
     -
     -
     -
     42,671,207
     42,671,207
     -
     -
     -
     -
     -
     -
     -
     -
     -Endesa Costanera
     Banco Santander Río
     US$
     4.67%
     At Maturity
     706,604
     -
     706,604
     -
     -
     -
     -
     404,811
     404,811
     849,749
     -
     849,749
     -
     -
     -
     -
     -
     -Endesa Costanera
     Banco Provincia de Buenos Aires
     US$
     6.00%
     At Maturity
     685,119
     -
     685,119
     -
     -
     -
     -
     1,046,049
     1,046,049
     -
     -
     -
     1,026,904
     -
     1,026,904
     -
     -
     -Endesa Costanera
     Banco Galicia
     US$
     5.44%
     At Maturity
     385,930
     -
     385,930
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Endesa Costanera
     Banco Ciudad
     US$
     5.70%
     At Maturity
     1,034,484
     -
     1,034,484
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Endesa Costanera
     Credit Suisse International
     US$
     12.26%
     At Maturity
     2,176,661
     -
     2,176,661
     2,173,458
     -
     2,173,458
     2,734,159
     8,187,052
     10,921,211
     2,727,679
     -
     2,727,679
     -
     4,278,999
     4,278,999
     10,647,556
     -
     10,647,556Endesa Costanera
     Citibank
     US$
     5.00%
     At Maturity
     -
     407,548
     407,548
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Endesa Costanera
     Banco Nación Argentina
     Ar$
     12.50%
     At Maturity
     686,987
     2,668,948
     3,355,935
     -
     -
     -
     -
     4,617,885
     4,617,885
     -
     -
     -
     -
     -
     -
     -
     -
     -Endesa Costanera
     Mediocredito Italiano
     Ar$
     1.75%
     At Maturity
     -
     1,951,134
     1,951,134
     972,164
     -
     972,164
     1,267,768
     1,255,391
     2,523,159
     2,510,699
     1,255,471
     3,766,170
     1,082,226
     921,452
     2,003,678
     2,488,790
     2,488,790
     4,977,580Endesa Costanera
     Banco Santander Río
     Ar$
     21.75%
     At Maturity
     306,929
     -
     306,929
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Endesa Costanera
     Banco Comafi
     Ar$
     15.00%
     At Maturity
     404,479
     -
     404,479
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Endesa Costanera
     Banco Itaú
     Ar$
     19.47%
     At Maturity
     1,730,145
     918,786
     2,648,931
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Endesa Costanera
     Citibank
     Ar$
     13.00%
     At Maturity
     562,347
     -
     562,347
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Endesa Costanera
     Banco Galicia
     Ar$
     6.39%
     At Maturity
     257,554
     -
     257,554
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Endesa Costanera
     Citibank
     US$
     5.32%
     At Maturity
     -
     1,136,571
     1,136,571
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Endesa Costanera
     Banco Galicia
     US$
     6.39%
     At Maturity
     158,669
     -
     158,669
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Endesa Costanera
     Bladex
     US$
     5.88%
     At Maturity
     -
     -
     -
     -
     -
     -
     722,371
     573,624
     1,295,995
     -
     -
     -
     -
     885,686
     885,686
     -
     -
     -Endesa Costanera
     Banco Itaú
     US$
     11.13%
     At Maturity
     -
     -
     -
     -
     -
     -
     -
     1,298,740
     1,298,740
     -
     -
     -
     -
     2,415,322
     2,415,322
     -
     -
     -Endesa Costanera
     Banco Ciudad
     Ar$
     6.70%
     At Maturity
     -
     -
     -
     -
     -
     -
     -
     1,120,666
     1,120,666
     -
     -
     -
     -
     -
     -
     -
     -
     -Endesa Chile
     B.N.P. Paribas
     US$
     5.96%
     Semi-annually
     -
     901,716
     901,716
     1,659,304
     2,488,955
     4,148,259
     -
     3,270,303
     3,270,303
     2,082,556
     4,165,111
     6,247,667
     -
     3,229,981
     3,229,981
     3,261,481
     4,064,740
     7,326,221Endesa Chile
     Export Development Corpotation
     US$
     2.50%
     Semi-annually
     -
     759,503
     759,503
     1,452,034
     1,452,035
     2,904,069
     -
     1,016,983
     1,016,983
     1,822,416
     2,733,624
     4,556,040
     -
     859,804
     859,804
     1,422,798
     2,845,597
     4,268,395Endesa Chile
     Banco Bilbao Vizcaya Argentaria
     US$
     1.60%
     At Maturity
     -
     15,866,003
     15,866,003
     -
     30,540,510
     30,540,510
     -
     -
     -
     19,855,862
     37,226,224
     57,082,086
     -
     -
     -
     -
     -
     -Endesa Chile
     The Bank of Tokyo-Mitsubishi
     US$
     1.60%
     At Maturity
     -
     12,675,768
     12,675,768
     17,110,472
     16,594,577
     33,705,049
     -
     12,508
     12,508
     37,356,336
     20,821,447
     58,177,783
     -
     27,903
     27,903
     4,180,739
     10,973,496
     15,154,235Endesa Chile
     Caja Madrid
     US$
     1.60%
     At Maturity
     -
     8,241,742
     8,241,742
     -
     25,143,298
     25,143,298
     -
     -
     -
     10,325,048
     31,547,647
     41,872,695
     -
     -
     -
     -
     -
     -Endesa Chile
     Banco Santander Central Hispano
     US$
     1.60%
     At Maturity
     -
     10,771,619
     10,771,619
     17,110,472
     16,594,577
     33,705,049
     -
     -
     -
     34,973,632
     20,821,447
     55,795,079
     -
     -
     -
     3,553,628
     10,973,496
     14,527,124Endesa Chile
     Citibank NA
     US$
     1.60%
     At Maturity
     -
     15,840,616
     15,840,616
     17,110,472
     -
     17,110,472
     -
     -
     -
     41,327,508
     -
     41,327,508
     -
     -
     -
     5,225,923
     10,973,496
     16,199,419Endesa Chile
     Ing Bank N.V.
     US$
     1.60%
     At Maturity
     -
     20,326,059
     20,326,059
     -
     -
     -
     -
     -
     -
     25,415,503
     -
     25,415,503
     -
     -
     -
     6,689,182
     -
     6,689,182Endesa Chile
     San Paolo IMI S.p.A
     US$
     1.60%
     At Maturity
     -
     12,672,493
     12,672,493
     -
     -
     -
     -
     -
     -
     15,884,689
     -
     15,884,689
     -
     -
     -
     4,180,739
     -
     4,180,739Endesa Chile
     HSBC Bank pic Spanish Branch
     US$
     1.60%
     At Maturity
     -
     10,560,411
     10,560,411
     -
     -
     -
     -
     -
     -
     13,237,241
     -
     13,237,241
     -
     -
     -
     3,483,949
     -
     3,483,949Endesa Chile
     ABN AMRO Bank
     US$
     1.60%
     At Maturity
     -
     5,230,136
     5,230,136
     -
     -
     -
     -
     -
     -
     6,618,621
     -
     6,618,621
     -
     -
     -
     1,741,975
     -
     1,741,975Endesa Chile
     Instituto de Credito Oficial
     US$
     1.60%
     At Maturity
     -
     5,280,206
     5,280,206
     10,139,539
     -
     10,139,539
     -
     -
     -
     19,342,560
     -
     19,342,560
     -
     -
     -
     1,741,975
     6,503,260
     8,245,235Endesa Chile
     Deutsche Bank AG New York Branch
     US$
     1.60%
     At Maturity
     -
     4,224,164
     4,224,164
     -
     -
     -
     -
     -
     -
     5,294,896
     -
     5,294,896
     -
     -
     -
     1,393,130
     -
     1,393,130Endesa Chile
     The Royal Bank of Scotland PLC
     US$
     1.60%
     At Maturity
     -
     -
     -
     5,069,769
     -
     5,069,769
     -
     -
     -
     6,361,969
     -
     6,361,969
     -
     -
     -
     -
     3,251,407
     3,251,407Endesa Chile
     Export Development Corpotation
     US$
     1.60%
     At Maturity
     -
     -
     -
     12,674,424
     -
     12,674,424
     -
     -
     -
     15,904,926
     -
     15,904,926
     -
     -
     -
     -
     8,128,516
     8,128,516Endesa Chile
     B.N.P. Paribas Panama Branch
     US$
     1.60%
     At Maturity
     -
     -
     -
     10,139,539
     -
     10,139,539
     -
     -
     -
     12,723,939
     -
     12,723,939
     -
     -
     -
     -
     6,502,812
     6,502,812Endesa Chile
     Banco Español de crédito
     US$
     1.60%
     At Maturity
     -
     -
     -
     5,069,769
     12,571,649
     17,641,418
     -
     -
     -
     6,361,969
     17,189,452
     23,551,421
     -
     -
     -
     -
     3,251,407
     3,251,407Endesa Chile
     Banco Estado
     US$
     1.60%
     At Maturity
     -
     -
     -
     6,970,933
     -
     6,970,933
     -
     -
     -
     8,747,708
     -
     8,747,708
     -
     -
     -
     -
     4,963,412
     4,963,412
   F - 73


---



Table of Contents


-Identification of Bank Borrowings by Companies   Company
     Financial
     Currency
     Nominal
     Type
     December 31, 2009
     December 31, 2008
     January 1, 2008Institution
     
     Interest
Rate
     of
     Current
     Non-
Current
     Current
     Non-
Current
     Current
     Non-
CurrentAmortization
     Less
than
90 days
     More
than
90 days
     Current,
Total
     1 to 5
years
     Over 10
Years
     Non-
Current,
Total
     Less
than
90 days
     More
than
90 days
     Current,
Total
     1 to 5
years
     Over
10 Years
     Non-
Current,
Total
     Less
than
90 days
     More
than
90 days
     Current,
Total
     1 to 5
years
     Over 10
Years
     Non-
Current,
TotalEndesa Chile
     The Bank of Nova Scotia
     US$
     1.60%
     At Maturity
     -
     5,068,997
     5,068,997
     -
     -
     -
     -
     -
     -
     6,353,876
     -
     6,353,876
     -
     -
     -
     1,672,295
     -
     1,672,295Endesa Chile
     Banco Bilbao Vizcaya Argentaria
     US$
     2.28%
     Quarterly
     -
     -
     -
     -
     -
     -
     -
     72,555
     72,555
     -
     -
     -
     -
     -
     -
     5,225,923
     -
     5,225,923Endesa Chile
     Caja Madrid
     US$
     1.77%
     Quarterly
     -
     -
     -
     -
     -
     -
     -
     16,298
     16,298
     -
     -
     -
     -
     18,368
     18,368
     2,717,480
     -
     2,717,480Enersis
     Banco Bilbao Vizcaya Argentaria
     US$
     2.59%
     At Maturity
     -
     -
     -
     -
     -
     -
     -
     12,645,346
     12,645,346
     -
     -
     -
     -
     111,076
     111,076
     14,492,624
     -
     14,492,624Enersis
     HSBC
     US$
     2.59%
     At Maturity
     -
     -
     -
     -
     -
     -
     -
     7,974,540
     7,974,540
     -
     -
     -
     -
     70,048
     70,048
     22,981,162
     -
     22,981,162Enersis
     Caja Madrid
     US$
     2.59%
     At Maturity
     -
     -
     -
     -
     -
     -
     -
     12,645,342
     12,645,342
     -
     -
     -
     -
     111,076
     111,076
     4,968,900
     -
     4,968,900Enersis
     Dresdner Bank AG
     US$
     2.59%
     At Maturity
     -
     -
     -
     -
     -
     -
     -
     2,734,128
     2,734,128
     -
     -
     -
     -
     24,016
     24,016
     5,797,050
     -
     5,797,050Enersis
     Deutsche Bank AG.
     US$
     2.59%
     At Maturity
     -
     -
     -
     -
     -
     -
     -
     3,189,816
     3,189,816
     -
     -
     -
     -
     28,019
     28,019
     14,037,142
     -
     14,037,142Enersis
     Banco Santander Central Hispano
     US$
     2.59%
     At Maturity
     -
     -
     -
     -
     -
     -
     -
     7,723,912
     7,723,912
     -
     -
     -
     -
     67,846
     67,846
     7,246,312
     -
     7,246,312Enersis
     Instituto Credito Oficial
     US$
     2.59%
     At Maturity
     -
     -
     -
     -
     -
     -
     -
     3,987,270
     3,987,270
     -
     -
     -
     -
     35,024
     35,024
     22,981,162
     -
     22,981,162Enersis
     Citibank, N.A.
     US$
     2.59%
     At Maturity
     -
     -
     -
     -
     -
     -
     -
     12,645,342
     12,645,342
     -
     -
     -
     -
     111,076
     111,076
     7,246,312
     -
     7,246,312Enersis
     ABN
     US$
     2.59%
     At Maturity
     -
     -
     -
     -
     -
     -
     -
     3,987,270
     3,987,270
     -
     -
     -
     -
     35,024
     35,024
     17,391,150
     -
     17,391,150Enersis
     Bank of Tolkio
     US$
     2.59%
     At Maturity
     -
     -
     -
     -
     -
     -
     -
     9,569,448
     9,569,448
     -
     -
     -
     -
     84,057
     84,057
     17,391,150
     -
     17,391,150Enersis
     Sao Paulo USA
     US$
     2.59%
     At Maturity
     -
     -
     -
     -
     -
     -
     -
     9,569,448
     9,569,448
     -
     -
     -
     -
     84,057
     84,057
     2,484,450
     -
     2,484,450Enersis
     Banca Monte Paschi Di Siena SPA
     US$
     2.59%
     At Maturity
     -
     -
     -
     -
     -
     -
     -
     1,367,064
     1,367,064
     -
     -
     -
     -
     12,008
     12,008
     4,968,901
     -
     4,968,901Enersis
     Caja de Ahorros de Galicia
     US$
     2.59%
     At Maturity
     -
     -
     -
     -
     -
     -
     -
     2,734,128
     2,734,128
     -
     -
     -
     -
     24,016
     24,016
     4,968,901
     -
     4,968,901Enersis
     The Bank of nova Scotiabank
     US$
     2.59%
     At Maturity
     -
     -
     -
     -
     -
     -
     -
     2,734,128
     2,734,128
     -
     -
     -
     -
     24,016
     24,016
     3,975,122
     -
     3,975,122Enersis
     Bancp Itaú Chile
     US$
     2.59%
     At Maturity
     -
     -
     -
     -
     -
     -
     -
     2,187,302
     2,187,302
     -
     -
     -
     -
     19,213
     19,213
     -
     -
     -Enersis
     Scotiabank
     Ch$
     12.73%
     At Maturity
     -
     -
     -
     -
     -
     -
     -
     6,713,751
     6,713,751
     -
     -
     -
     -
     -
     -
     -
     -
     -Enersis
     Itaú
     Ch$
     13.08%
     At Maturity
     -
     -
     -
     -
     -
     -
     -
     10,337,900
     10,337,900
     -
     -
     -
     -
     -
     -
     -
     -
     -Enersis
     Estado
     Ch$
     15.00%
     At Maturity
     -
     -
     -
     -
     -
     -
     -
     2,075,833
     2,075,833
     -
     -
     -
     -
     -
     -
     -
     -
     -Enersis
     Chile
     Ch$
     10.56%
     At Maturity
     -
     -
     -
     -
     -
     -
     -
     10,005,867
     10,005,867
     -
     -
     -
     -
     -
     -
     -
     -
     -Enersis
     BCI
     Ch$
     11.63%
     At Maturity
     -
     -
     -
     -
     -
     -
     -
     5,003,230
     5,003,230
     -
     -
     -
     -
     -
     -
     -
     -
     -Enersis
     Estado
     US$
     15.00%
     At Maturity
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     22,981,162
     -
     22,981,162H. El Chocón
     Deutsche Bank
     US$
     3.80%
     At Maturity
     1,508,290
     4,437,126
     5,945,416
     10,564,564
     -
     10,564,564
     3,785,599
     3,712,642
     7,498,241
     20,684,627
     -
     20,684,627
     87,880
     2,898,510
     2,986,390
     21,946,008
     -
     21,946,008H. El Chocón
     Standard Bank
     US$
     3.80%
     At Maturity
     1,508,290
     4,437,126
     5,945,416
     10,564,564
     -
     10,564,564
     3,785,599
     3,712,641
     7,498,240
     20,684,627
     -
     20,684,627
     87,880
     2,898,510
     2,986,390
     21,946,008
     -
     21,946,008H. El Chocón
     Sindicated
     US$
     18.67%
     At Maturity
     160,537
     3,202,738
     3,363,275
     12,810,950
     -
     12,810,950
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -H. El Chocón
     Ciudad
     Ar$
     21.50%
     At Maturity
     14,946
     -
     14,946
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -H. El Chocón
     Santander Rio
     Ar$
     17.44%
     Semi-annually
     -
     -
     -
     -
     -
     -
     83,496
     6,629,366
     6,712,862
     -
     -
     -
     -
     -
     -
     -
     -
     -GasAtacama
     Pnc Bank
     US$
     3.09%
     Semi-annually
     -
     -
     -
     225,406
     -
     225,406
     8,357
     282,982
     291,339
     565,964
     -
     565,964
     -
     -
     -
     -
     -
     -GasAtacama Holding
     Sc Group
     US$
     7.50%
     Annually
     -
     34,965,052
     34,965,052
     -
     -
     -
     -
     -
     -
     53,722,804
     -
     53,722,804
     -
     44,098,848
     44,098,848
     -
     662,790
     662,790Pangue
     Export Development Corporation
     US$
     1.63%
     Semi-annually
     370,984
     -
     370,984
     -
     -
     -
     948,555
     -
     948,555
     462,087
     -
     462,087
     -
     -
     -
     -
     -
     -Pangue
     Export Development Corporation
     US$
     3.75%
     Semi-annually
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     772,559
     -
     772,559
     -
     1,218,197
     1,218,197Pangue
     Kreditanstalf Fúr Wiederaubau
     US$
     4.85%
     Semi-annually
     -
     -
     -
     -
     -
     -
     176,238
     -
     176,238
     -
     -
     -
     276,815
     -
     276,815
     -
     -
     -Sistemas Sec S.A.
     BBVA
     CH$
     4.68%
     Semi-annually
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     1,316,483
     1,316,483
     -
     -
     -
     -
     -
     -Synapsis Brasil
     BNB
     R$
     9.57%
     Annually
     -
     -
     -
     -
     -
     -
     -
     -
     -
     544,673
     -
     544,673
     -
     -
     -
     841,568
     -
     841,568Synapsis Brasil
     BNB
     R$
     11.30%
     Annually
     194,837
     -
     194,837
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Synapsis Colombia Ltda.
     Banco de Bogotá
     CPs
     11.50%
     Semi-annually
     744,192
     -
     744,192
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Total
     
     
     
     
     39,183,991
     342,161,610
     381,345,601
     452,343,091
     409,709,749
     862,052,840
     91,970,952
     478,900,406
     570,871,358
     636,214,044
     594,753,894
     1,230,967,938
     122,688,098
     225,980,309
     348,668,407
     513,519,721
     527,961,004
     1,041,480,725
  F - 74


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Table of Contents


c)Unsecured obligations by currency and maturity as of December 31, 2009, December 31, 2008, and January 1, 2008, is as follows:   -Summary of unsecured obligations by currency and maturity  Country
     Currency
     Type of Amortization
     Nominal Annual Rate
     Secured/ Unsecured
     Current
     Non-CurrentMaturity
     Current Potion at 12/31/2009
     Maturity
     Non-Current Portion at 12/31/2009Undetermined
     Less than One Month
     One to Three Months
     Three to twelve Months
     One to Five Years
     Over Five YearsThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$Chile
     US$
     Semi-annually
     7.88%
     Unsecured
     -
     -
     15,916,932
     6,782,703
     22,699,635
     -
     771,171,418
     771,171,418Chile
     Ch$
     Semi-annually
     5.01%
     Unsecured
     -
     -
     1,081,503
     8,843,672
     9,925,175
     9,968,809
     415,647,419
     425,616,228Peru
     US$
     Semi-annually
     6.97%
     Unsecured
     -
     -
     -
     789,504
     789,504
     4,056,799
     27,505,653
     31,562,452Peru
     Soles
     Semi-annually
     7.23%
     Unsecured
     -
     -
     7,806,462
     314,504
     8,120,966
     40,135,949
     116,463,727
     156,599,676Argentina
     Ar$
     Quarterly
     11.75%
     Unsecured
     -
     -
     -
     8,807,528
     8,807,528
     13,211,293
     -
     13,211,293Colombia
     CPs
     Semi-annually
     9.94%
     Unsecured
     -
     -
     1,446,813
     130,251,384
     131,698,197
     159,931,863
     447,119,273
     607,051,136Brazil
     R$
     Semi-annually
     12.94%
     Unsecured
     -
     -
     -
     46,910,823
     46,910,823
     155,290,517
     97,045,044
     252,335,561Total
     -
     -
     26,251,710
     202,700,118
     228,951,828
     382,595,230
     1,874,952,534
     2,257,547,764
   Country
     Currency
     Type of Amortization
     Nominal Annual Rate
     Secured/ Unsecured
     Current
     Non-CurrentMaturity
     Current Total at 12/31/2008
     Maturity
     Non-Current Total at 12/31/2008Undetermined
     Up to One Month
     One to Three Months
     Three to twelve Months
     One to Five Years
     Over Five YearsThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$Chile
     US$
     Semi-annually
     7.96%
     Unsecured
     -
     -
     7,529,669
     423,856,834
     431,386,503
     -
     929,310,401
     929,310,401Chile
     Ch$
     Quarterly
     5.05%
     Unsecured
     -
     -
     -
     5,004,323
     5,004,323
     10,211,424
     422,452,740
     432,664,164Peru
     US$
     Quarterly
     5.80%
     Unsecured
     -
     -
     -
     13,448,960
     13,448,960
     5,094,843
     25,295,850
     30,390,693Peru
     Soles
     Semi-annually
     6.87%
     Unsecured
     -
     -
     -
     32,599,214
     32,599,214
     44,686,294
     153,479,309
     198,165,603Argentina
     Ar$
     Quarterly
     12.28%
     Unsecured
     
     
     -
     -
     -
     -
     30,262,432
     30,262,432Colombia
     CPs
     Semi-annually
     12.51%
     Unsecured
     
     
     -
     -
     -
     160,968,224
     458,798,292
     619,766,516Brazil
     R$
     Semi-annually
     14.56%
     Unsecured
     -
     -
     122,600,356
     -
     122,600,356
     87,521,479
     50,339,957
     137,861,436Total
     -
     -
     130,130,025
     474,909,331
     605,039,356
     308,482,264
     2,069,938,981
     2,378,421,245
   F - 75


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Table of Contents


Country
     Currency
     Type of Amortization
     Nominal Annual Rate
     Secured/ Unsecured
     Current
     Non-CurrentMaturity
     Current Total at 01/01/2008
     Maturity
     Non-Current Total at 01/01/2008Undetermined
     Up to One Month
     One to Three Months
     Three to twelve Months
     One to Five Years
     Over Five YearsThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$Chile
     US$
     Semi-annually
     7.93%
     Unsecured
     -
     -
     5,878,571
     228,769,156
     234,647,727
     -
     1,097,174,380
     1,097,174,380Chile
     Ch$
     Quarterly
     4.93%
     Unsecured
     -
     -
     -
     4,166,774
     4,166,774
     9,340,386
     132,491,314
     141,831,700Peru
     US$
     Quarterly
     5.55%
     Unsecured
     -
     -
     -
     -
     -
     4,970,557
     18,888,119
     23,858,676Peru
     Soles
     Semi-annually
     6.68%
     Unsecured
     -
     -
     12,947,996
     9,899,155
     22,847,151
     38,850,622
     108,649,686
     147,500,308Argentina
     Ar$
     Quarterly
     12.28%
     Unsecured
     -
     -
     -
     -
     -
     -
     26,035,837
     26,035,837Colombia
     CPs
     Semi-annually
     12.64%
     Unsecured
     -
     -
     3,444,610
     1,580,202
     5,024,812
     146,036,731
     416,543,687
     562,580,418Brazil
     R$
     Semi-annually
     13.06%
     Unsecured
     -
     -
     -
     81,251,513
     81,251,513
     -
     138,741,528
     138,741,528Total
     -
     -
     22,271,177
     325,666,800
     347,937,977
     199,198,296
     1,938,524,551
     2,137,722,847
   d)Secured obligations by currency and maturity as of December 31, 2009, December 31, 2008, and January 1, 2008, is as follows:  -Summary of secured obligations by currency and maturity.  Country
     Currency
     Type of Amortization
     Nominal Annual Rate
     Secured/ Unsecured
     Current
     Non-CurrentMaturity
     Current Total at 12/31/2009
     Maturity
     Non-Current Total at 12/31/2009Undetermined
     Up to One Month
     One to Three Months
     Three to twelve Months
     One to Five Years
     Over Five YearsThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$Peru
     US$
     Quarterly
     6.06%
     Secured
     -
     -
     -
     72,618
     72,618
     10,141,998
     -
     10,141,998Peru
     Soles
     Semi Annually
     6.28%
     Secured
     -
     -
     -
     10,950,797
     10,950,797
     9,647,352
     8,770,320
     18,417,672Total
     -
     -
     -
     11,023,415
     11,023,415
     19,789,350
     8,770,320
     28,559,670
   The fair value of current and non-current secured and unsecured obligations totaled ThCh$2,957,767,022 and ThCh$3,406,969,288 as of December 31, 2009 and 2008, respectively.   F - 76


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Table of Contents


-Secured and unsecured obligations by Company  Company
     Financial
     Currency
     Nominal
     Secured/
     December 31, 2009
     December 31, 2008
     January 1, 2008Institution
     
     Interest Rate
     Unsecured
     Current
     Non-Current
     Current
     Non-Current
     Current
     Non-CurrentLess than 90 days
     More than 90 days
     Current, Total
     1 to 5 years
     Over 10 Years
     Non-Current, Total
     Less than 90 days
     More than 90 days
     Current, Total
     1 to 5 years
     Over 10 Years
     Non-Current, Total
     Less than 90 days
     More
than 90 days
     Current, Total
     1 to 5 years
     Over 10 Years
     Non-
Current,
TotalAmpla
     Bonds
     R$
     13.23%
     Unsecured
     -
     46,910,823
     46,910,823
     154,419,099
     26,147,159
     180,566,258
     -
     -
     -
     -
     -
     -
     -
     81,251,513
     81,251,513
     -
     138,741,528
     138,741,528Chinango
     Banco Continental
     Soles
     6.72%
     Secured
     -
     6,218,332
     6,218,332
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Chinango
     Banco Continental
     Soles
     6.47%
     Secured
     -
     55,078
     55,078
     -
     4,385,160
     4,385,160
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Chinango
     Banco Continental
     Soles
     6.09%
     Secured
     -
     4,431,993
     4,431,993
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Chinango
     Banco Continental
     Soles
     6.16%
     Secured
     -
     29,644
     29,644
     5,262,192
     -
     5,262,192
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Chinango
     Banco Continental
     Soles
     6.16%
     Secured
     -
     123,662
     123,662
     -
     4,385,160
     4,385,160
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Chinango
     Banco Continental
     Soles
     5.91%
     Secured
     -
     92,088
     92,088
     4,385,160
     -
     4,385,160
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Chinango
     Banco Continental
     US$
     6.06%
     Secured
     -
     72,618
     72,618
     10,141,998
     -
     10,141,998
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Codensa
     B3
     CPs
     13.12%
     Unsecured
     -
     -
     -
     -
     -
     -
     16,977,582
     -
     16,977,582
     -
     -
     -
     -
     1,580,202
     1,580,202
     12,331,245
     -
     12,331,245Codensa
     B5
     CPs
     13.01%
     Unsecured
     239,630
     -
     239,630
     49,612,813
     -
     49,612,813
     -
     -
     -
     56,734,965
     -
     56,734,965
     -
     -
     -
     -
     49,324,981
     49,324,981Codensa
     B8
     CPs
     13.22%
     Unsecured
     306,773
     -
     306,773
     62,016,015
     -
     62,016,015
     -
     -
     -
     -
     70,918,706
     70,918,706
     -
     -
     -
     -
     61,656,227
     61,656,227Codensa
     B302
     CPs
     11.85%
     Unsecured
     173,600
     55,667,344
     55,840,944
     -
     -
     -
     -
     -
     -
     63,747,188
     -
     63,747,188
     -
     -
     -
     55,408,835
     -
     55,408,835Codensa
     B102
     CPs
     11.58%
     Unsecured
     350,428
     -
     350,428
     -
     96,558,689
     96,558,689
     -
     -
     -
     -
     110,214,411
     110,214,411
     -
     -
     -
     -
     95,774,700
     95,774,700Codensa
     B52
     CPs
     10.56%
     Unsecured
     89,286
     -
     89,286
     8,364,721
     -
     8,364,721
     -
     -
     -
     9,565,515
     -
     9,565,515
     -
     -
     -
     -
     8,316,192
     8,316,192Codensa
     B203
     CPs
     10.27%
     Unsecured
     25,907
     27,038,982
     27,064,889
     -
     -
     -
     -
     -
     -
     30,920,556
     -
     30,920,556
     -
     -
     -
     -
     -
     -Codensa
     B503
     CPs
     10.74%
     Unsecured
     78,909
     -
     78,909
     18,728,836
     -
     18,728,836
     -
     -
     -
     -
     24,254,198
     24,254,198
     -
     -
     -
     -
     -
     -Codensa
     B503
     CPs
     12.85%
     Unsecured
     93,489
     -
     93,489
     21,209,478
     -
     21,209,478
     -
     -
     -
     -
     21,417,450
     21,417,450
     -
     -
     -
     -
     -
     -Codensa
     B102
     CPs
     12.38%
     Unsecured
     88,791
     -
     88,791
     -
     19,845,125
     19,845,125
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Coelce
     Itaú
     R$
     12.00%
     Unsecured
     -
     -
     -
     -
     35,448,942
     35,448,942
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Coelce
     Santander
     R$
     12.00%
     Unsecured
     -
     -
     -
     -
     35,448,943
     35,448,943
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Edegel
     Banco Continental
     Soles
     6.31%
     Unsecured
     -
     6,920
     6,920
     -
     4,385,160
     4,385,160
     -
     -
     -
     -
     5,067,278
     5,067,278
     -
     -
     -
     -
     4,146,278
     4,146,278Edegel
     Banco Continental
     Soles
     6.28%
     Unsecured
     -
     -
     -
     -
     4,385,160
     4,385,160
     -
     -
     -
     -
     5,067,278
     5,067,278
     -
     -
     -
     -
     4,146,278
     4,146,278Edegel
     Banco Continental
     Soles
     6.75%
     Unsecured
     -
     78,933
     78,933
     -
     3,508,128
     3,508,128
     -
     -
     -
     -
     4,053,822
     4,053,822
     -
     -
     -
     -
     3,317,017
     3,317,017Edegel
     Banco Continental
     Soles
     6.50%
     Unsecured
     -
     80,760
     80,760
     -
     4,385,160
     4,385,160
     -
     -
     -
     -
     5,067,278
     5,067,278
     -
     -
     -
     -
     4,146,278
     4,146,278Edegel
     Banco Continental
     Soles
     6.44%
     Unsecured
     -
     30,582
     30,582
     -
     4,385,160
     4,385,160
     -
     -
     -
     -
     5,067,278
     5,067,278
     -
     -
     -
     -
     4,146,278
     4,146,278Edegel
     Banco Continental
     Soles
     6.63%
     Unsecured
     -
     14,526
     14,526
     -
     4,385,160
     4,385,160
     -
     -
     -
     -
     5,067,278
     5,067,278
     -
     -
     -
     -
     4,146,278
     4,146,278Edegel
     Banco Continental
     Soles
     6.59%
     Unsecured
     -
     102,783
     102,783
     -
     4,964,001
     4,964,001
     -
     -
     -
     -
     5,736,153
     5,736,153
     4,975,533
     -
     4,975,533
     -
     -
     -Edegel
     Banco Continental
     US$
     5.97%
     Unsecured
     -
     108,963
     108,963
     4,056,799
     -
     4,056,799
     -
     -
     -
     5,094,843
     -
     5,094,843
     -
     -
     -
     -
     8,947,008
     8,947,008Edegel
     Banco Continental
     US$
     6.34%
     Unsecured
     -
     138,506
     138,506
     -
     5,070,999
     5,070,999
     -
     -
     -
     -
     6,368,554
     6,368,554
     -
     -
     -
     -
     -
     -Edegel
     Banco Continental
     US$
     9.00%
     Unsecured
     -
     59,148
     59,148
     -
     4,929,095
     4,929,095
     -
     -
     -
     -
     6,190,187
     6,190,187
     -
     -
     -
     -
     -
     -Edegel
     Banco Continental
     US$
     7.78%
     Unsecured
     -
     143,209
     143,209
     -
     4,140,994
     4,140,994
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Edegel
     Banco Continental
     US$
     7.13%
     Unsecured
     -
     102,050
     102,050
     -
     3,222,567
     3,222,567
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Edegel
     Banco Scotiabank
     US$
     6.63%
     Unsecured
     -
     153,978
     153,978
     -
     5,070,999
     5,070,999
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Edegel
     Banco Scotiabank
     US$
     6.00%
     Unsecured
     -
     83,650
     83,650
     -
     5,070,999
     5,070,999
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Edegel
     Banco Continental
     Soles
     6.91%
     Unsecured
     -
     -
     -
     -
     -
     -
     -
     15,282,707
     15,282,707
     -
     -
     -
     -
     -
     -
     11,609,577
     -
     11,609,577Edegel
     Banco Continental
     US$
     3.75%
     Unsecured
     -
     -
     -
     -
     -
     -
     -
     6,724,480
     6,724,480
     -
     -
     -
     -
     -
     -
     -
     -
     -Edegel
     Banco Continental
     Soles
     6.72%
     Unsecured
     -
     -
     -
     -
     -
     -
     -
     -
     -
     7,094,189
     -
     7,094,189
     -
     -
     -
     5,804,789
     -
     5,804,789Edegel
     Banco Continental
     Soles
     6.47%
     Unsecured
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     5,067,278
     5,067,278
     -
     -
     -
     -
     4,146,278
     4,146,278Edegel
     Banco Continental
     Soles
     6.09%
     Unsecured
     -
     -
     -
     -
     -
     -
     -
     -
     -
     5,067,278
     -
     5,067,278
     -
     -
     -
     4,146,278
     -
     4,146,278Edegel
     Banco Continental
     Soles
     6.16%
     Unsecured
     -
     -
     -
     -
     -
     -
     -
     -
     -
     6,080,733
     -
     6,080,733
     -
     -
     -
     -
     4,975,533
     4,975,533Edegel
     Banco Continental
     Soles
     6.16%
     Unsecured
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     5,067,278
     5,067,278
     -
     -
     -
     -
     4,146,278
     4,146,278
   F - 77


---



Table of Contents


-Secured and unsecured obligations by Companies  (Continued)  Company
     Financial
     Currency
     Nominal
     Secured/
     December 31, 2009
     December 31, 2008
     January 1, 2008Institution
     
     Interest Rate
     Unsecured
     Current
     Non-Current
     Current
     Non-Current
     Current
     Non-CurrentLess than 90 days
     More than 90 days
     Current, Total
     1 to 5 years
     Over 10 Years
     Non-Current, Total
     Less than 90 days
     More than 90 days
     Current, Total
     1 to 5 years
     Over 10 Years
     Non-Current, Total
     Less than 90 days
     More
than 90 days
     Current, Total
     1 to 5 years
     Over 10 Years
     Non-
Current,
TotalEdegel
     Banco Continental
     Soles
     5.91%
     Unsecured
     -
     -
     -
     -
     -
     -
     -
     -
     -
     5,067,278
     -
     5,067,278
     -
     -
     -
     -
     4,146,278
     4,146,278Edegel
     Banco Continental
     US$
     6.06%
     Unsecured
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     12,737,109
     12,737,109
     -
     -
     -
     -
     9,941,111
     9,941,111Edegel
     Banco Continental
     US$
     3.75%
     Unsecured
     -
     -
     -
     -
     -
     -
     -
     6,724,480
     6,724,480
     -
     -
     -
     -
     -
     -
     4,970,557
     -
     4,970,557Edegel
     Banco Continental
     Soles
     8.50%
     Unsecured
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     3,317,022
     3,317,022
     -
     -
     -Edegel
     Banco Continental
     Soles
     6.00%
     Unsecured
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     3,710,089
     -
     3,710,089
     -
     -
     -Edegel
     Banco Continental
     Soles
     6.47%
     Unsecured
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     4,262,374
     -
     4,262,374
     -
     -
     -Edelnor
     Caja De Pensiones Militar Policial
     Soles
     7.38%
     Unsecured
     5,317,877
     -
     5,317,877
     -
     -
     -
     -
     24,914
     24,914
     6,080,732
     -
     6,080,732
     -
     20,386
     20,386
     4,975,533
     -
     4,975,533Edelnor
     Fcr - Macrofondo
     Soles
     1.27%
     Unsecured
     4,485
     -
     4,485
     858,071
     -
     858,071
     -
     7,534
     7,534
     -
     991,545
     991,545
     -
     6,433
     6,433
     -
     811,327
     811,327Edelnor
     Rimac Internacional Cia De Seguros
     Soles
     8.49%
     Unsecured
     41,573
     -
     41,573
     -
     4,047,701
     4,047,701
     -
     55,765
     55,765
     -
     4,663,880
     4,663,880
     -
     36,718
     36,718
     -
     3,574,937
     3,574,937Edelnor
     Rimac Internacional Cia De Seguros
     Soles
     9.69%
     Unsecured
     15,316
     -
     15,316
     -
     4,039,254
     4,039,254
     -
     17,647
     17,647
     -
     4,654,147
     4,654,147
     -
     13,527
     13,527
     -
     3,567,476
     3,567,476Edelnor
     Afp Integra
     Soles
     9.69%
     Unsecured
     8,737
     -
     8,737
     -
     8,064,483
     8,064,483
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Edelnor
     Fdo Seguro de Retiro de Suboficiales y Especialistas
     Soles
     8.75%
     Unsecured
     25,580
     -
     25,580
     -
     5,262,192
     5,262,192
     -
     29,559
     29,559
     -
     6,080,732
     6,080,732
     -
     24,187
     24,187
     -
     4,975,533
     4,975,533Edelnor
     Afp Integra
     Soles
     7.31%
     Unsecured
     124,703
     -
     124,703
     3,508,128
     -
     3,508,128
     -
     -
     -
     4,053,822
     -
     4,053,822
     -
     117,910
     117,910
     -
     3,317,022
     3,317,022Edelnor
     Seguro Social De Salud - Essalud
     Soles
     7.84%
     Unsecured
     26,753
     -
     26,753
     -
     701,626
     701,626
     -
     -
     -
     -
     810,764
     810,764
     -
     25,295
     25,295
     -
     663,404
     663,404Edelnor
     Afp Profuturo
     Soles
     7.56%
     Unsecured
     21,003
     -
     21,003
     -
     2,631,096
     2,631,096
     -
     24,270
     24,270
     -
     3,040,366
     3,040,366
     -
     19,859
     19,859
     -
     2,487,767
     2,487,767Edelnor
     Afp Integra
     Soles
     8.16%
     Unsecured
     125,183
     -
     125,183
     -
     3,157,315
     3,157,315
     -
     -
     -
     -
     3,648,439
     3,648,439
     -
     118,363
     118,363
     -
     2,985,320
     2,985,320Edelnor
     Afp Horizonte
     Soles
     7.22%
     Unsecured
     63,311
     -
     63,311
     -
     2,631,096
     2,631,096
     -
     73,159
     73,159
     -
     3,040,366
     3,040,366
     -
     59,862
     59,862
     -
     2,487,767
     2,487,767Edelnor
     Afp Integra
     Soles
     7.06%
     Unsecured
     102,546
     -
     102,546
     3,508,128
     -
     3,508,128
     -
     118,497
     118,497
     -
     4,053,822
     4,053,822
     -
     96,960
     96,960
     -
     3,317,022
     3,317,022Edelnor
     Afp Integra
     Soles
     8.00%
     Unsecured
     157,975
     -
     157,975
     -
     4,771,054
     4,771,054
     -
     182,548
     182,548
     -
     5,513,197
     5,513,197
     -
     149,369
     149,369
     -
     4,511,150
     4,511,150Edelnor
     Fcr - Macrofondo
     Soles
     6.66%
     Unsecured
     40,864
     -
     40,864
     -
     2,631,096
     2,631,096
     -
     47,221
     47,221
     -
     3,040,366
     3,040,366
     -
     38,638
     38,638
     -
     2,487,767
     2,487,767Edelnor
     Afp Profuturo
     Soles
     5.69%
     Unsecured
     39,351
     -
     39,351
     3,508,128
     -
     3,508,128
     -
     45,472
     45,472
     -
     4,053,822
     4,053,822
     -
     37,207
     37,207
     -
     3,317,022
     3,317,022Edelnor
     Afp Integra
     Soles
     5.91%
     Unsecured
     40,864
     -
     40,864
     -
     3,508,128
     3,508,128
     -
     47,221
     47,221
     -
     4,053,822
     4,053,822
     -
     38,638
     38,638
     -
     3,317,022
     3,317,022Edelnor
     Afp Horizonte
     Soles
     5.97%
     Unsecured
     202,412
     -
     202,412
     7,016,256
     -
     7,016,256
     -
     224,764
     224,764
     -
     8,107,643
     8,107,643
     -
     191,385
     191,385
     -
     6,634,044
     6,634,044Edelnor
     Afp Prima
     Soles
     6.94%
     Unsecured
     163,603
     -
     163,603
     -
     7,016,256
     7,016,256
     -
     189,052
     189,052
     -
     8,107,643
     8,107,643
     -
     154,691
     154,691
     -
     6,634,044
     6,634,044Edelnor
     Afp Prima
     Soles
     6.56%
     Unsecured
     103,599
     -
     103,599
     5,262,192
     -
     5,262,192
     -
     119,714
     119,714
     -
     6,080,732
     6,080,732
     -
     97,956
     97,956
     -
     4,975,502
     4,975,502Edelnor
     Afp Prima
     Soles
     6.84%
     Unsecured
     170,062
     -
     170,062
     -
     5,262,192
     5,262,192
     -
     196,515
     196,515
     -
     6,080,732
     6,080,732
     -
     -
     -
     -
     -
     -Edelnor
     Afp Integra
     Soles
     5.94%
     Unsecured
     70,010
     -
     70,010
     3,508,128
     -
     3,508,128
     -
     80,900
     80,900
     4,053,822
     -
     4,053,822
     -
     -
     -
     -
     -
     -Edelnor
     Mapfre Perú Cia De Seguros
     Soles
     6.28%
     Unsecured
     74,064
     -
     74,064
     -
     3,508,128
     3,508,128
     -
     85,584
     85,584
     -
     4,053,822
     4,053,822
     -
     -
     -
     -
     -
     -Edelnor
     Afp Prima
     Soles
     6.81%
     Unsecured
     14,107
     -
     14,107
     -
     4,385,160
     4,385,160
     -
     16,302
     16,302
     -
     5,067,277
     5,067,277
     -
     -
     -
     -
     -
     -Edelnor
     Afp Prima
     Soles
     7.13%
     Unsecured
     14,754
     -
     14,754
     -
     4,385,160
     4,385,160
     -
     17,049
     17,049
     -
     5,067,277
     5,067,277
     -
     -
     -
     -
     -
     -Edelnor
     Afp Prima
     Soles
     7.50%
     Unsecured
     123,515
     -
     123,515
     3,508,128
     -
     3,508,128
     -
     142,728
     142,728
     4,053,822
     -
     4,053,822
     -
     -
     -
     -
     -
     -Edelnor
     Afp Prima
     Soles
     7.72%
     Unsecured
     190,677
     -
     190,677
     -
     5,262,192
     5,262,192
     -
     220,337
     220,337
     -
     6,080,732
     6,080,732
     -
     -
     -
     -
     -
     -Edelnor
     Afp Profuturo
     Soles
     8.31%
     Unsecured
     10,004
     -
     10,004
     2,280,283
     -
     2,280,283
     -
     11,560
     11,560
     -
     2,634,984
     2,634,984
     -
     -
     -
     -
     -
     -Edelnor
     Afp Profuturo
     Soles
     8.25%
     Unsecured
     11,811
     -
     11,811
     2,712,660
     -
     2,712,660
     -
     13,649
     13,649
     3,134,618
     -
     3,134,618
     -
     -
     -
     -
     -
     -Edelnor
     Afp Profuturo
     Soles
     7.81%
     Unsecured
     160,879
     -
     160,879
     4,465,847
     -
     4,465,847
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Edelnor
     Afp Profuturo
     Soles
     7.91%
     Unsecured
     191,842
     -
     191,842
     -
     5,262,192
     5,262,192
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Edelnor
     Afp Profuturo
     Soles
     8.06%
     Unsecured
     104,706
     -
     104,706
     -
     4,369,373
     4,369,373
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
   F - 78


---



Table of Contents


-Secured and unsecured obligations by Companies (Continued)  Company
     Financial
     Currency
     Nominal
     Secured/
     December 31, 2009
     December 31, 2008
     January 1, 2008Institution
     
     Interest Rate
     Unsecured
     Current
     Non-Current
     Current
     Non-Current
     Current
     Non-CurrentLess than 90 days
     More than 90 days
     Current, Total
     1 to 5 years
     Over 10 Years
     Non-Current, Total
     Less than 90 days
     More than 90 days
     Current, Total
     1 to 5 years
     Over 10 Years
     Non-Current, Total
     Less than 90 days
     More
than 90 days
     Current, Total
     1 to 5 years
     Over 10 Years
     Non-
Current,
TotalEdelnor
     Fondo Mi Vivienda
     Soles
     6.56%
     Unsecured
     44,296
     -
     44,296
     -
     5,170,104
     5,170,104
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Edelnor
     Atlantic Security Bank
     Soles
     6.16%
     Unsecured
     -
     -
     -
     -
     -
     -
     -
     4,167,512
     4,167,512
     -
     -
     -
     -
     93,026
     93,026
     3,317,022
     -
     3,317,022Edelnor
     Afp Integra
     Soles
     8.56%
     Unsecured
     -
     -
     -
     -
     -
     -
     -
     4,074,070
     4,074,070
     -
     -
     -
     -
     16,568
     16,568
     3,317,022
     -
     3,317,022Edelnor
     Afp Integra
     Soles
     7.14%
     Unsecured
     -
     -
     -
     -
     -
     -
     -
     45,174
     45,174
     -
     9,292,278
     9,292,278
     -
     -
     -
     -
     -
     -Edelnor
     Atlantic Security Bank
     Soles
     6.63%
     Unsecured
     -
     -
     -
     -
     -
     -
     -
     3,975,761
     3,975,761
     -
     -
     -
     -
     60,516
     60,516
     3,192,634
     -
     3,192,634Edelnor
     Afp Integra
     Soles
     5.78%
     Unsecured
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     5,106,573
     5,106,573
     -
     -
     -Edelnor
     Atlantic Security Bank
     Soles
     6.16%
     Unsecured
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Edelnor
     Afp Integra
     Soles
     6.12%
     Unsecured
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     40,341
     40,341
     -
     7,122,786
     7,122,786Edelnor
     Atlantic Security Bank
     Soles
     6.63%
     Unsecured
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Edelnor
     Afp Profuturo
     Soles
     6.75%
     Unsecured
     -
     -
     -
     -
     -
     -
     -
     3,062,029
     3,062,029
     -
     -
     -
     -
     17,725
     17,725
     2,487,767
     -
     2,487,767Edesur.
     Oeds7
     Ar$
     11.75%
     Unsecured
     -
     8,807,528
     8,807,528
     13,211,293
     -
     13,211,293
     -
     -
     -
     -
     30,262,432
     30,262,432
     -
     -
     -
     -
     26,035,837
     26,035,837Emgesa
     Bonds B10
     CPs
     8.88%
     Unsecured
     -
     77,674
     77,674
     -
     54,124,027
     54,124,027
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Emgesa
     Bonds A-10
     CPs
     7.33%
     Unsecured
     -
     313,888
     313,888
     -
     42,170,891
     42,170,891
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Emgesa
     Bonds B-103
     CPs
     7.64%
     Unsecured
     -
     2,781,270
     2,781,270
     -
     9,922,563
     9,922,563
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Emgesa
     Bonds A102
     CPs
     7.33%
     Unsecured
     -
     41,039,701
     41,039,701
     -
     59,535,375
     59,535,375
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Emgesa
     Bods A5
     CPs
     5.77%
     Unsecured
     -
     98,880
     98,880
     -
     12,264,287
     12,264,287
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Emgesa
     Bonds B10
     CPs
     8.04%
     Unsecured
     -
     446,152
     446,152
     -
     39,705,134
     39,705,134
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Emgesa
     Bonds B15
     CPs
     8.34%
     Unsecured
     -
     160,448
     160,448
     -
     13,767,556
     13,767,556
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Emgesa
     Bods A5
     CPs
     9.27%
     Unsecured
     -
     1,063,229
     1,063,229
     -
     22,876,468
     22,876,468
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Emgesa
     Bonds B9
     CPs
     8.16%
     Unsecured
     -
     1,101,083
     1,101,083
     -
     54,127,579
     54,127,579
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Emgesa
     Bonds B12
     CPs
     8.35%
     Unsecured
     -
     462,733
     462,733
     -
     22,221,579
     22,221,579
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Emgesa
     Bonds B10
     CPs
     12.17%
     Unsecured
     -
     -
     -
     -
     -
     -
     1,826,096
     -
     1,826,096
     -
     -
     -
     -
     -
     -
     -
     -
     -Emgesa
     Bonds C10
     CPs
     10.25%
     Unsecured
     -
     -
     -
     -
     -
     -
     68,540
     -
     68,540
     -
     -
     -
     -
     -
     -
     -
     -
     -Emgesa
     Bonds C10
     CPs
     9.88%
     Unsecured
     -
     -
     -
     -
     -
     -
     126,554
     -
     126,554
     -
     -
     -
     -
     -
     -
     -
     -
     -Emgesa
     Bonds B10
     CPs
     12.86%
     Unsecured
     -
     -
     -
     -
     -
     -
     461,795
     -
     461,795
     -
     -
     -
     -
     -
     -
     -
     -
     -Emgesa
     Bonds A-10
     CPs
     12.56%
     Unsecured
     -
     -
     -
     -
     -
     -
     6,382,490
     -
     6,382,490
     -
     59,571,713
     59,571,713
     -
     -
     -
     -
     51,791,231
     51,791,231Emgesa
     Bonds B-103
     CPs
     13.28%
     Unsecured
     -
     -
     -
     -
     -
     -
     6,115,741
     -
     6,115,741
     -
     48,224,720
     48,224,720
     3,444,610
     -
     3,444,610
     -
     41,926,234
     41,926,234Emgesa
     Bonds A102
     CPs
     12.56%
     Unsecured
     -
     -
     -
     -
     -
     -
     2,648,540
     -
     2,648,540
     -
     11,346,993
     11,346,993
     -
     -
     -
     -
     9,864,996
     9,864,996Emgesa
     Bonds B Coi14B00021
     CPs
     13.98%
     Unsecured
     -
     -
     -
     -
     -
     -
     4,302,930
     -
     4,302,930
     -
     112,850,101
     112,850,101
     -
     -
     -
     -
     97,889,126
     97,889,126Emgesa
     Bonds B10
     CPs
     12.17%
     Unsecured
     -
     -
     -
     -
     -
     -
     57,905,331
     -
     57,905,331
     -
     -
     -
     -
     -
     -
     56,680,570
     -
     56,680,570Emgesa
     Bonds C10
     CPs
     10.25%
     Unsecured
     -
     -
     -
     -
     -
     -
     3,083,910
     -
     3,083,910
     -
     -
     -
     -
     -
     -
     4,333,425
     -
     4,333,425Emgesa
     Bonds C10
     CPs
     9.88%
     Unsecured
     -
     -
     -
     -
     -
     -
     5,365,037
     -
     5,365,037
     -
     -
     -
     -
     -
     -
     2,485,162
     -
     2,485,162Emgesa
     Bonds B10
     CPs
     12.86%
     Unsecured
     -
     -
     -
     -
     -
     -
     17,335,810
     -
     17,335,810
     -
     -
     -
     -
     -
     -
     14,797,494
     -
     14,797,494Endesa Brasil
     Bonds
     R$
     14.56%
     Unsecured
     -
     -
     -
     -
     -
     -
     -
     -
     -
     87,521,479
     50,339,957
     137,861,436
     -
     -
     -
     -
     -
     -Endesa Chile
     The Bank Of New York Mellon - 1° Issue S-1
     US$
     7.88%
     Unsecured
     3,425,699
     -
     3,425,699
     -
     102,917,226
     102,917,226
     -
     4,299,519
     4,299,519
     -
     137,448,195
     137,448,195
     -
     3,749,967
     3,749,967
     -
     110,666,143
     110,666,143Endesa Chile
     The Bank Of New York Mellon - 1° Issue S-2
     US$
     7.33%
     Unsecured
     1,095,470
     -
     1,095,470
     -
     35,440,766
     35,440,766
     -
     144,292,497
     144,292,497
     -
     -
     -
     -
     3,336,409
     3,336,409
     -
     108,519,461
     108,519,461Endesa Chile
     The Bank Of New York Mellon - 1° Issue S-3
     US$
     8.13%
     Unsecured
     693,840
     -
     693,840
     -
     15,095,048
     15,095,048
     -
     870,822
     870,822
     -
     22,098,558
     22,098,558
     -
     389,219
     389,219
     -
     91,516,176
     91,516,176Endesa Chile
     Banco Santander Chile   -   264 Series-F
     Ch$
     6.20%
     Unsecured
     1,081,503
     314,143
     1,395,646
     1,256,571
     27,717,199
     28,973,770
     -
     1,445,988
     1,445,988
     1,287,154
     36,443,753
     37,730,907
     -
     1,337,624
     1,337,624
     1,177,360
     19,450,567
     20,627,927
  F - 79


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Table of Contents


-Secured and unsecured obligations by Companies  Company
     Financial
     Currency
     Nominal
     Secured/
     December 31, 2009
     December 31, 2008
     January 1, 2008Institution
     
     Interest Rate
     Unsecured
     Current
     Non-Current
     Current
     Non-Current
     Current
     Non-CurrentLess than 90 days
     More than 90 days
     Current, Total
     1 to 5 years
     Over 10 Years
     Non-Current, Total
     Less than 90 days
     More than 90 days
     Current, Total
     1 to 5 years
     Over 10 Years
     Non-Current, Total
     Less than 90 days
     More
than 90 days
     Current, Total
     1 to 5 years
     Over 10 Years
     Non-
Current,
TotalEndesa Chile
     The Bank Of New York Mellon - 144 - A
     US$
     8.35%
     Unsecured
     7,057,142
     -
     7,057,142
     -
     211,634,298
     211,634,298
     -
     8,857,263
     8,857,263
     -
     252,964,910
     252,964,910
     -
     6,915,053
     6,915,053
     -
     197,088,673
     197,088,673Endesa Chile
     The Bank Of New York Mellon - 144 - A
     US$
     8.63%
     Unsecured
     3,644,781
     -
     3,644,781
     -
     99,962,409
     99,962,409
     -
     4,574,484
     4,574,484
     -
     126,114,063
     126,114,063
     -
     3,571,397
     3,571,397
     -
     98,231,944
     98,231,944Endesa Chile
     Banco Santander Chile  -   317 Series-H
     Ch$
     6.20%
     Unsecured
     -
     5,421,895
     5,421,895
     8,712,238
     66,125,845
     74,838,083
     -
     1,091,714
     1,091,714
     8,924,270
     72,121,018
     81,045,288
     -
     998,591
     998,591
     8,163,026
     41,610,882
     49,773,908Endesa Chile
     Banco Santander Chile  -   318 Series-K
     Ch$
     3.80%
     Unsecured
     -
     657,013
     657,013
     -
     83,760,687
     83,760,687
     -
     673,003
     673,003
     -
     85,797,535
     85,797,535
     -
     615,596
     615,596
     -
     24,146,427
     24,146,427Endesa Chile
     Banco Santander Chile  -   522 Series-M
     Ch$
     4.75%
     Unsecured
     -
     409,678
     409,678
     -
     194,673,025
     194,673,025
     -
     419,648
     419,648
     -
     192,783,625
     192,783,625
     -
     -
     -
     -
     -
     -Endesa Chile
     The Bank Of New York Mellon - 3° Issue S-1
     US$
     8.50%
     Unsecured
     -
     -
     -
     -
     -
     -
     -
     259,989,824
     259,989,824
     -
     -
     -
     -
     4,223,565
     4,223,565
     -
     197,881,878
     197,881,878Endesa Chile
     The Bank Of New York Mellon - 2° Issue 1
     US$
     7.75%
     Unsecured
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     205,815,978
     205,815,978
     -
     -
     -Edelnor S.A.
     Yankee Bonds 2016
     US$
     7.40%
     Unsecured
     -
     780,947
     780,947
     -
     139,318,872
     139,318,872
     -
     969,422
     969,422
     -
     181,405,806
     181,405,806
     -
     765,223
     765,223
     -
     135,864,367
     135,864,367Edelnor S.A.
     Yankee Bonds 2026
     US$
     6.60%
     Unsecured
     -
     2,393
     2,393
     -
     435,092
     435,092
     -
     3,003
     3,003
     -
     500,437
     500,437
     -
     2,345
     2,345
     -
     500,437
     500,437Edelnor S.A.
     Yankee Bonds 2014
     US$
     7.38%
     Unsecured
     -
     5,999,363
     5,999,363
     -
     179,935,747
     179,935,747
     7,529,669
     -
     7,529,669
     -
     208,778,432
     208,778,432
     5,878,571
     -
     5,878,571
     -
     156,905,301
     156,905,301Edelnor S.A.
     Bonds Uf 269
     Ch$
     5.75%
     Unsecured
     -
     2,040,943
     2,040,943
     -
     30,674,041
     30,674,041
     -
     1,211,602
     1,211,602
     -
     35,306,809
     35,306,809
     -
     1,022,775
     1,022,775
     -
     46,899,062
     46,899,062Edelnor S.A.
     Bonds Uf 269
     Ch$
     5.50%
     Unsecured
     -
     -
     -
     -
     -
     -
     -
     162,368
     162,368
     -
     -
     -
     -
     192,188
     192,188
     -
     384,376
     384,376Total
     
     
     
     26,251,710
     213,723,533
     239,975,243
     401,513,162
     1,884,594,272
     2,286,107,434
     130,130,025
     474,909,331
     605,039,356
     308,482,264
     2,069,938,981
     2,378,421,245
     22,271,177
     325,666,800
     347,937,977
     199,198,296
     1,938,524,551
     2,137,722,847
   F - 80


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Table of Contents


e)Debt designated as hedging instrument The Group has the policy to hedge the portion of the revenues from its subsidiaries that is directly impacted by the variations in the United States dollar through incurring in financing debt in the same currency. As of December 31, 2009, out of the total outstanding debt denominated in U.S. dollars ThCh$964,291,000 (ThCh$1,672,590,600 as of December 31, 2008) has been designated as hedging instruments to hedge the U.S. dollar exposure of revenues (See Note 3.m). Changes during 2009 and 2008 in the equity reserve named “Hedging reserves” are as follows:  12-31-2009
     12-31-2008ThCh$
     ThCh$Opening Balance Hedging Reserve , Net
     (62,484,022)
     128,332,092Exchange Differences Recognized in Equity, Net
     123,342,260
     (180,325,602)Exchange Differences Allocated to Income, Net
     (3,953,389)
     (10,490,511)Closing Balance Hedging Reserve (Income Hedging), Net
     56,904,849
     (62,484,022)
  f)Other matters  As of December 31, 2009 and 2008, the Enersis Group has long term lines of credit available for use amounting to ThCh$101,420,000 and ThCh$127,290,000, respectively.  The credit facilities of the Company and certain of its subsidiaries include various financial covenant ratios, customary on this type of arrangements. There are also contain affirmative and negative covenants that require ongoing monitoring of its compliance.  In June, 2009, the Company agreed the new required limits for its financial covenants ratios with the creditors of its credit facilities; such new limits were established taking into consideration the financial effect of adopting IFRS.  For local bonds issued in Unidades de Fomento (Inflation index-linked units of account), whose financial covenants are linked to the financial statements under Chilean GAAP in FECU format, the certifications of such covenants at March, June and September 2009 were made using the best association of the FECU accounts with the new presentation under IFRS, maintaining the contractual fund and the sense of the covenants defined under the previous FECU format. Existing leeway is significant and, therefore, there was no risk of defaulting on these requirements at December 31, 2009. In January, 2010 the Company and the bondholders conducted a meeting on which they approved the changes to the financial covenants necessary to reflect the effects of the change in accounting standards.  Some of Enersis and Endesa Chile’s financial debt arrangements contain cross default clauses.  Endesa Chile has two loans syndicated under New York Law stipulating that the cross-default clause would be triggered when payments of interest and/or principal become overdue, and the default is originated by the Company or its relevant subsidiaries.  An Endesa Chile loan syndicated under New York Law and entered into in 2008, does not reference its subsidiaries and, therefore, a cross default can only arise from that Company's other debt. On the side of Enersis, the loan syndicated under New York Law and entered into in December 2009 established that for trigger a cross default must be an overdue payment of Enersis or Endesa Chile or Chilectra.  For debt repayment of one or more loans to be accelerated due to cross default originated from other debt, additional conditions must be met, including expiration of grace periods, if any, and formal notification of the creditors’ intention to accelerate repayment of more than 50% of the amount owed in the agreement. Additionally, in December 2009, both Enersis and Endesa Chile signed loans from banks in Chile that stipulate that a cross default is triggered only in the case of default by the debtor. For all scenarios aforementioned, the amount on default should exceed US$ 50 million, or its equivalent in other currencies.  In Enersis S.A. and Endesa Chile bonds registered with the Securities and Exchange Commission (“SEC”) of the United States of America, commonly known as “Yankee Bonds”, subsequent to the amendment approved by the bondholders in July, 2009, cross default provisions, as any matured default of either Enersis, Endesa Chile or any subsidiary could result in a cross default to Enersis and Endesa Chile’s Yankee Bonds if the matured default, on an individual basis, has a principal exceeding US$30 million, or its equivalent in other currencies.  In the case of a matured default above the materiality threshold, Yankee bondholders would have the option to accelerate if either the Trustee or bondholders representing no less than 25% of the aggregate debt of a particular series then outstanding choose to do so.    F - 81


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As of December 31, 2009 and 2008, Enersis S.A and Endesa Chile or any of their subsidiaries were in full compliance with all above described financial covenants at the time of this report.  19.RISK MANAGEMENT POLICY   The Group’s companies are exposed to certain risks that are managed by implementing systems to identify, measure, limit concentration of and supervise risks.  Among the main basic principles defined by the Group are:  -Compliance with corporate governance standards.  -Strictly compliance with all regulating policies of the Group.  Each business and corporate areas defines:  I.Markets and products to operate based on its knowledge and ability to ensure an effective risk management.  II.Criteria regarding counterparts.  III.Authorized operators.  -Business and corporate areas establish for each market in which they operate its tolerance of risk in a manner consistent with the defined strategy.  -All of the operations of the businesses and corporate areas are performed within limits approved by the corresponding internal authorities.  -Businesses, corporate areas, lines of business and companies design risk management controls that are necessary to ensure that transactions in the markets be performed in accordance with Enersis' policies, standards and procedures.  19.1.Interest rate risk Changes in interest rate modify the fair value of assets and liabilities bearing fixed interest rates, as well as, the expected future cash flows of assets and liabilities subject to floating interest rates.  The objective of managing interest rate risk exposure is to achieve a balance in the debt structure to minimize the cost of debt with reduced volatility in profit or loss.  In compliance with the current interest rate hedging policy, the proportion of fixed debt and/or hedged debt over the net total debt was 36% as of December, 2009.  Depending on the Group’s estimates and on the objectives of the debt structure, hedging transactions are performed by entering into derivatives contracts to mitigate interest rate risk. Derivatives instruments currently used to comply with the risk management policy are collars to set the Libor rate within a given range and, floating-to-fixed interest rate swaps.  F - 82


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The financial debt structure of the Group detailed by fixed, hedged and floating rate debt net of hedging derivatives instruments is as follows:  Net position: 12-31-2009
     12-31-2008%
     %Fixed Interest Rate
     35%
     46%Hedged Interest Rate
     1%
     3%Floating Interest Rate
     64%
     51%Total
     100%
     100%
  19.2.Exchange rate risk Exchange rate risks involve basically the following transactions: -Debt denominated in foreign currencies.  -Payments made in international markets for purchasing materials.  -Revenues from subsidiaries that are directly affected by changes in the U.S. dollar.  -Inflows from foreign subsidiaries to their Chilean parent companies, subject to changes in exchange rates. In order to mitigate the foreign currency risk, the Group’s foreign currency risk management policy is based on cash flows and considers maintaining a balance between US dollar inflows/outflows and the levels of assets and liabilities denominated in such currency. The objective is to minimize the exposure to variability in cash flows that attributable to foreign exchange risk. The hedging instruments currently being used to comply with the policy are currency swaps and forward exchange contracts. In addition, the policy seeks to refinance the debt in the functional currency of each of the companies of the Group.   19.3.Commodities risk   The Group has a risk exposure to price changes in certain commodities, basically due to:  - Purchases of fuel used to generate electricity energy.  - Energy purchase/sale transactions performed in local markets.  The company has not entered into commodity derivative instruments to manage fluctuations in fuel prices; however, it is permanently analyzing and verifying the appropriateness of using this type of instruments, as such has not discarded its use in the future.   F - 83


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In order to reduce the risk in situations of extreme drought, the company has designed a commercial policy by defining the levels of sales commitments in line with the capacity of its generating power plants in a dry year and including risk mitigation terms in certain contracts with unregulated customers.   19.4.Liquidity risk  The Group maintains a liquidity risk management policy consisting of entering into long-term banking facilities and temporary financial investments for amounts matching the projected needs over a period of time subject to the situation and expectations of debt and capital markets.  The projected needs above include maturities of net financial debt, i.e. less financial derivatives. For further details regarding the features and conditions of financial derivatives, see Note 20.  The Group has cash and cash equivalent liquidity totaled ThCh$1,134,900,821 and unconditional available lines of credits totaled ThCh$253,550,000 as of December 31, 2009. As of December 31, 2008, the Group had liquidity of  ThCh$ 1,318,061,963 in cash and cash equivalents and ThCh$ 127,290,000 in unconditional available credit lines.   19.5.Credit risk  Given the current economic situation, the Group has been conducting detail monitoring of its credit risk.  Trade receivable: The credit risk for receivables from the Groups commercial activity has historically been very low, due to the short term period of collections from customers, resulting in non significant cumulative amounts of receivables. The above trend applies to our electricity generating and distribution lines of business.  In our electricity generating line of business, the regulations in certain countries, allow the suspension of the energy service to customers with outstanding payments, and most of the contracts have termination clauses for payment default. The Company monitors on an ongoing basis its credit risk and measure quantitatively its maximum exposure to the payment default risk, which as stated above, is very low. In our electricity distribution line of business, the suspension of the energy service for payment default of our customers is permitted in all cases, in accordance with current regulations in each country, which facilitates our credit risk management, which is also very low.  Financial assets: Cash surpluses are invested in highest rated local and foreign financial entities (with equivalent risk rating to investment grade) with established thresholds for each entity. In order to select the banks where to invest, those banks with at least two investment grade ratings received from the 3 major international rating agencies (Moodys, S&P y Fitch), are selected to make the investments. Investments are supported with treasury bonds from the countries where the company operates and/or with commercial papers issued by highest rated banks, where depending on the circumstances and market conditions treasury bonds are the preferred ones. Derivatives instruments are  entered into with entities with solid creditworthiness, where approximately 90% of the derivative transactions performed are with A or higher rating entities.   F - 84


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19.6.Risk measurement The Enersis Group measures the Value at Risk (VaR) of its debt positions and financial derivatives, in order to assure that the risk assumed by the company remains consistent with the risk exposure defined by Management, thereby reducing the volatility in the income statement. The portfolio of positions included in order to calculate the current Value at Risk consist of the following:  -Debt.  -Financial derivatives. The VaR determined represents the potential loss in value of the portfolio of positions described above in one-day with a 95% level of confidence. To determine the VaR, it has been taken into account the volatility of the risk variables affecting the value of the portfolio of positions including:  -U.S. dollar Libor interest rate.  -For the debt, considering the various currencies in which our companies operate, the customary local indices used in the banking industry.  -The exchange rates of the various currencies included in the calculation. The calculation of VaR is based on generating possible future scenarios (at one day) of market values (both spot and term) for the risk variables, using Monte Carlo simulations. The number of scenarios generated ensures compliance with the simulation convergence criteria. The table of volatilities and correlations between the various risk variables calculated based on the historical values of the logarithmic price return has been applied to simulate the future price scenario. Once the price scenarios have been obtained, the fair value of the portfolio is calculated using such scenarios, thereby obtaining a distribution of possible values at one day. The one-day 95% VaR number is calculated as the 5% percentile of the potential increases in the fair value of the portfolio in one day. The various debt positions and financial derivatives included in the calculation have been valued consistently using the financial capital calculation methodology reported to Management. Taking into account the assumptions described above, the Value at Risk of the previously discussed positions, broken down by type of position, is shown in the following table:  Financial Positions
     12-31-2009
     12-31-2008ThCh$
     ThCh$Interest Rate
     29,778,643
     23,198,402Exchange Rate
     3,860,371
     4,824,732Correlation
     (7,740,115)
     (5,358,813)Total
     25,898,899
     22,664,321
  The positions of the VaR have evolved through 2009 and 2008 based on the maturity/initiation of operations throughout the year.    F - 85


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20.FINANCIAL INSTRUMENTS   20.1Financial assets, classified by nature and category  a)The detail of financial assets, classified by nature and category, as of December 31, 2009, December 31, 2008, and January 1, 2008, is as follows:  December 31, 2009Financial Assets Held for Trading
     Financial Assets at Fair Value With Change in Net Income
     Held-to-Maturity Investments
     Loans and Receivables
     Available-for-Sale Financial Assets
     Hedge DerivativesThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$Equity Instruments
     -
     -
     -
     -
     -
     -Derivative Instruments
     1,536,089
     -
     -
     -
     -
     -Other Financial Assets
     -
     -
     -
     1,157,660,854
     -
     -Total Current
     1,536,089
     -
     -
     1,157,660,854
     -
     -Equity Instruments
     -
     -
     -
     -
     2,512,716
     -Derivative Instruments
     732,253
     -
     -
     -
     -
     2,238,039Other Financial Assets
     -
     -
     24,548,711
     195,442,451
     -
     -Total Non-Current
     732,253
     -
     24,548,711
     195,442,451
     2,512,716
     2,238,039Total
     2,268,342
     -
     24,548,711
     1,353,103,305
     2,512,716
     2,238,039December 31, 2008Financial Assets Held for Trading
     Financial Assets at Fair Value With Change in Net Income
     Held-to-Maturity Investments
     Loans and Receivables
     Available-for-Sale Financial Assets
     Hedge DerivativesThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$Equity Instruments
     -
     -
     -
     -
     -
     -Derivative Instruments
     -
     -
     -
     -
     -
     -Other Financial Assets
     -
     -
     -
     1,337,813,546
     -
     -Total Current
     -
     -
     -
     1,337,813,546
     -
     -Equity Instruments
     -
     -
     -
     -
     22,495,036
     -Derivative Instruments
     1,324,219
     -
     -
     -
     -
     2,486,652Other Financial Assets
     -
     -
     -
     320,347,388
     -
     -Total Non-Current
     1,324,219
     -
     -
     320,347,388
     22,495,036
     2,486,652Total
     1,324,219
     -
     -
     1,658,160,934
     22,495,036
     2,486,652January 1, 2008Financial Assets Held for Trading
     Financial Assets at Fair Value With Change in Net Income
     Held-to-Maturity Investments
     Loans and Receivables
     Available-for-Sale Financial Assets
     Hedge DerivativesThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$Equity Instruments
     -
     -
     -
     -
     -
     -Derivative Instruments
     -
     -
     -
     -
     -
     -Other Financial Assets
     -
     -
     -
     1,212,510,034
     -
     -Total Current
     -
     -
     -
     1,212,510,034
     -
     -Equity Instruments
     -
     -
     -
     -
     22,500,804
     -Derivative Instruments
     -
     -
     -
     -
     -
     1,035,531Other Financial Assets
     -
     -
     25,291,701
     254,121,916
     -
     -Total Non-Current
     -
     -
     25,291,701
     254,121,916
     22,500,804
     1,035,531Total
     -
     -
     25,291,701
     1,466,631,950
     22,500,804
     1,035,531
   F - 86


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b)The detail of financial liabilities, classified by nature and category, as of December 31, 2009, December 31, 2008, and January 1, 2008, is as follows:  December 31, 2009Financial Liabilities Held for Trading
     Financial Liabilities at Fair Value With Change in Net Income
     Loans and Receivables
     Hedge DerivativesThCh$
     ThCh$
     ThCh$
     ThCh$Interest-Bearing Loans
     6,582,907
     -
     714,928,413
     -Derivative Instruments
     420,822
     -
     -
     8,441,901Other Financial Liabilities
     -
     -
     1,088,738,212
     -Total Current
     7,003,729
     -
     1,803,666,625
     8,441,901Interest-Bearing Loans
     22,673,861
     -
     3,301,232,336
     -Derivative Instruments
     -
     -
     -
     206,931,247Other Financial Liabilities
     -
     -
     62,284,175Total Non-Current
     22,673,861
     -
     3,363,516,511
     206,931,247Total
     29,677,590
     -
     5,167,183,136
     215,373,148December 31, 2008Financial Liabilities Held for Trading
     Financial Liabilities at Fair Value With Change in Net Income
     Loans and Receivables
     Hedge DerivativesThCh$
     ThCh$
     ThCh$
     ThCh$Interest-Bearing Loans
     8,595,896
     -
     1,264,369,437
     -Derivative Instruments
     -
     -
     -
     4,268,501Other Financial Liabilities
     -
     -
     1,065,330,761
     -Total Current
     8,595,896
     -
     2,329,700,198
     4,268,501Interest-Bearing Loans
     36,557,282
     -
     3,788,789,078
     -Derivative Instruments
     -
     -
     -
     104,052,809Other Financial Liabilities
     -
     -
     58,111,763
     -Total Non-Current
     36,557,282
     -
     3,846,900,841
     104,052,809Total
     45,153,178
     -
     6,176,601,039
     108,321,310January 1, 2008Financial Liabilities Held for Trading
     Financial Liabilities at Fair Value With Change in Net Income
     Loans and Receivables
     Hedge DerivativesThCh$
     ThCh$
     ThCh$
     ThCh$Interest-Bearing Loans
     6,284,204
     -
     729,131,053
     -Derivative Instruments
     -
     -
     -
     10,853,599Other Financial Liabilities
     -
     -
     847,818,214
     -Total Current
     6,284,204
     -
     1,576,949,267
     10,853,599Interest-Bearing Loans
     35,018,100
     -
     3,334,556,979
     -Derivative Instruments
     -
     -
     -
     213,418,815Other Financial Liabilities
     -
     -
     51,123,259
     -Total Non-Current
     35,018,100
     -
     3,385,680,238
     213,418,815Total
     41,302,304
     -
     4,962,629,505
     224,272,414
   F - 87


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20.2Derivative instruments  The risk management policy of the Group establishes using interest rate and foreign exchange rate derivatives to hedge its exposure to interest rate and foreign currency risks. The Company classifies its hedging relationships as follows: -Cash flow hedges:Those that hedge the cash flows of the hedged underlying item.  -Fair value hedges:Those that hedge the fair value of the hedged underlying item.  -Non-hedge derivatives:Financial derivatives that do not meet the requirements established by IFRS to be designated as hedge instruments are recorded at fair value with changes in net income (assets held for trading).  a)    Assets and liabilities for hedge derivative instruments  As of December 31, 2009, December 31, 2008 and January 1, 2008, financial derivative transactions that qualify as hedge instruments resulted in recognition of the following assets and liabilities in the statement of financial position:  12-31-2009
     12-31-2008
     01-01-2008Assets
     Liabilities
     Assets
     Liabilities
     Assets
     LiabilitiesCurrent
ThCh$
     Non-Current
ThCh$
     Current
ThCh$
     Non-Current
ThCh$
     Current
ThCh$
     Non-Current
ThCh$
     Current
ThCh$
     Non-Current
ThCh$
     Current
ThCh$
     Non-Current
ThCh$
     Current
ThCh$
     Non-
Current
ThCh$Interest Rate Hedge:
     -
     2,157,177
     1,122,388
     3,328,432
     -
     2,486,652
     890,041
     9,112,285
     -
     1,035,531
     -
     2,320,462Cash Flow Hedge
     -
     2,157,177
     1,122,388
     3,328,432
     -
     2,486,652
     890,041
     9,112,285
     -
     1,035,531
     -
     2,320,462Fair Value Hedge
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Interest Rate Hedge:
     -
     80,862
     7,319,513
     203,602,815
     -
     -
     3,378,460
     94,940,524
     -
     -
     10,853,599
     211,098,353Cash Flow Hedge
     -
     80,862
     2,537,129
     196,123,295
     -
     -
     2,407,799
     90,139,883
     -
     -
     5,951,699
     198,596,517Fair Value Hedge
     -
     -
     4,782,384
     7,479,520
     -
     -
     970,661
     4,800,641
     -
     -
     4,901,900
     12,501,836TOTAL
     -
     2,238,039
     8,441,901
     206,931,247
     -
     2,486,652
     4,268,501
     104,052,809
     -
     1,035,531
     10,853,599
     213,418,815
   -            General Information relating to hedge derivative instruments  Hedging derivative instruments and their corresponding hedged instruments are shown in the following table:  Detail of Hedge Instruments
     Description of Hedge Instrument
     Description of Hedged Instruments
     12-31-2009
     12-31-2008
     Nature of Risks Being HedgedFair Value of Hedge  Instruments
     Fair Value of Hedge InstrumentsThCh$
     ThCh$SWAP
     Interest Rate
     Bank Borrowings
     (3,225,872)
     (6,815,496)
     Cash flowSWAP
     Interest Rate
     Unsecured obligations, (Bonds)
     1,617,247
     2,486,567
     Cash flowSWAP
     Exchange Rate
     Bank Borrowings
     80,862
     -
     Cash flowCCS
     Exchange Rate
     Bank Borrowings
     (12,261,904)
     (5,771,302)
     Fair valueCCS
     Exchange Rate
     Unsecured obligations, (Bonds)
     (198,660,424)
     (91,155,940)
     Cash flowCOLLAR
     Interest Rate
     Bank Borrowings
     (685,018)
     (3,186,745)
     Cash flowFORWARD
     Exchange Rate
     Revenues
     -
     (1,391,742)
     Cash flow
   For years 2009 and 2008, the Group had not recognized significant gains or losses for ineffective cash flow hedges.   F - 88


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The following table details the gain or losses recognized on the hedging instrument and on the hedged item attributable to the hedged risk:   12-31-2009
     12-31-2008Gain
ThCh$
     Loss
ThCh$
     Gain
ThCh$
     Loss
ThCh$Hedging Instrument
     -
     9,435,859
     -
     4,329,485Hedged Item
     7,893,882
     -
     -
     4,948,720TOTAL
     7,893,882
     9,435,859
     -
     9,278,205
   b)    Financial derivative instrument assets and liabilities at fair value with changes in net income  As of December 31, 2009, December 31, 2008 and January 1, 2008, financial derivative transactions recorded at fair value with changes in net income, resulted in the recognition of the following assets and liabilities in the statement of financial position:  December 31, 2009
     December 31, 2008
     January 1, 2008Assets
     Liabilities
     Assets
     Liabilities
     Assets
     LiabilitiesCurrent
     Non-Current
     Current
     Non-Current
     Current
     Non-Current
     Current
     Non-Current
     Current
     Non-Current
     Current
     Non-CurrentThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$Financial assets at fair value with changes through net income
     1,536,089
     732,253
     
     -
     -
     1,324,219
     
     -
     -
     -
     -
     -Other financial liabilities
     -
     
     420,822
     
     -
     -
     -
     -
     -
     -
     -
     -
   c) Other information on derivatives:  The following tables set forth the fair value of hedging and non-hedging derivatives entered into by the Group as well as the remaining contractual maturities as of December 31, 2009 and December 31, 2008:  Financial derivatives
     December 31, 2009Fair Value
     Notional ValueLess than 1 year
     1-2 Years
     2-3 Years
     3-4 Years
     4-5 Years
     Subsequent Years
     TotalThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$Interest Rate Hedge:
     (2,293,643)
     39,094,718
     26,127,883
     26,392,796
     3,187,503
     117,499,266
     1,563,664
     213,865,830Cash Flow Hedge
     (2,293,643)
     39,094,718
     26,127,883
     26,392,796
     3,187,503
     117,499,266
     1,563,664
     213,865,830Exchange Rate Hedge:
     (210,841,466)
     6,791,682
     6,431,553
     11,188,708
     1,857,687
     268,355,058
     200,498,983
     495,123,671Cash Flow Hedge
     (198,579,562)
     -
     -
     5,071,000
     -
     266,364,546
     198,366,150
     469,801,696Fair Value Hedge
     (12,261,904)
     6,791,682
     6,431,553
     6,117,708
     1,857,687
     1,990,512
     2,132,833
     25,321,975Derivatives not designated as hedge accounting
     1,847,520
     91,970,309
     31,945,255
     -
     -
     -
     -
     123,915,564Total
     (211,287,589)
     137,856,709
     64,504,691
     37,581,504
     5,045,190
     385,854,324
     202,062,647
     832,905,065Financial derivatives
     December 31, 2008Fair Value
     Notional ValueLess than 1 year
     1-2 Years
     2-3 Years
     3-4 Years
     4-5 Years
     Subsequent Years
     TotalThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$Interest Rate Hedge:
     (7,515,674)
     84,386,261
     47,507,821
     26,968,046
     33,125,015
     4,000,565
     20,677,420
     216,665,128Cash Flow Hedge
     (7,515,674)
     84,386,261
     47,507,821
     26,968,046
     33,125,015
     4,000,565
     20,677,420
     216,665,128Exchange Rate Hedge:
     (98,318,984)
     11,414,390
     6,389,167
     6,490,130
     6,598,312
     1,737,134
     479,892,091
     512,521,224Cash Flow Hedge
     (92,547,682)
     5,119,449
     -
     -
     -
     -
     476,036,328
     481,155,777Fair Value Hedge
     (5,771,302)
     6,294,941
     6,389,167
     6,490,130
     6,598,312
     1,737,134
     3,855,763
     31,365,447Derivatives not designated as hedge accounting
     1,324,219
     14,281,412
     14,281,412
     13,091,295
     -
     -
     -
     41,654,119Total
     (104,510,439)
     110,082,063
     68,178,400
     46,549,471
     39,723,327
     5,737,699
     500,569,511
     770,840,471
   The hedging and non-hedging derivatives contractual maturities do not represent the total Groups risks exposure, as the amounts set forth in the above tables have been drawn up based on undiscounted contractual cash inflows and outflows for their settlement.   F - 89


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20.3Fair value hierarchies  20.3.1Financial instruments recognized at fair value in the statement of financial position are classified based on the following hierarchies:  Level 1: Quoted prices (unadjusted) in an active market for identical assets and liabilities.  Level 2: Inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly (i.e. as price) or indirectly (i.e., derived from prices); and  Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).  The following table details financial assets and liabilities measured at fair value as of December 31, 2009:  Financial Instruments Measured at Fair Value
     Fair Value Measured at End of Reporting Period using:12-31-2009
     Level 1
     Level 2
     Level 3ThCh$
     ThCh$
     ThCh$
     ThCh$Financial AssetsCash Flow Hedge Derivatives
     2,238,039
     -
     2,238,039
     -Fair Value Hedge Derivatives
     -
     -
     -
     -Derivatives not Designated as Hedge Accounting
     2,268,342
     -
     2,268,342
     -Available-for-Sale Financial Assets, Non-Current
     88,838
     88,838
     -
     -Total
     4,595,219
     88,838
     4,506,381
     -Financial LiabilitiesCash Flow Hedging Derivatives
     203,111,244
     -
     203,111,244
     -Fair Value Hedging Derivatives
     12,261,904
     -
     12,261,904
     -Derivatives not Designated in Hedge Accounting
     420,822
     -
     420,822
     -Interest-Bearing Borrowings, Short-Term
     6,582,907
     -
     6,582,907
     -Interest-Bearing Borrowings, Long-Term
     34,626,861
     -
     22,673,861
     11,953,000Total
     257,003,738
     -
     245,050,738
     11,953,000
    20.3.2The following is the reconciliation between opening and closing balances for Level 3 fair value measurement of financial instruments:   Non-current interest-bearing loans
     ThCh$Balance at December 31, 2008
     2,429,372Total losses recognized in Profit or Loss
     9,523,628Balance at December 31, 2009
     11,953,000
    F - 90


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21.TRADE ACCOUNTS PAYABLE AND OTHER PAYABLES.  Trade and other receivables as of December 31, 2009, December 31, 2008, and January 1, 2008, is as follows:  Current
     Non-CurrentTrade accounts payable and other payables
     12-31-2009
     12-31-2008
     01-01-2008
     12-31-2009
     12-31-2008
     01-01-2008ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$Trade accounts payables
     341,167,159
     301,705,966
     271,254,512
     -
     -
     -Other payables
     635,339,305
     647,602,807
     507,105,772
     58,727,503
     49,133,974
     42,961,467Total
     976,506,464
     949,308,773
     778,360,284
     58,727,503
     49,133,974
     42,961,467
   The detail of Trade Accounts and other Payables as of December 31, 2009, December 31, 2008, and January 1, 2008 is as follows:  Current
     Non-CurrentOne to Five YearsTrade and Other Payables
     12-31-2009
     12-31-2008
     01-01-2008
     12-31-2009
     12-31-2008
     01-01-2008ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$Energy Suppliers
     326,840,301
     220,393,191
     217,085,669
     -
     -
     -Fuel and Gas Suppliers
     69,218,546
     80,094,945
     54,168,843
     -
     -
     -Payables for Goods and Services
     380,805,716
     471,569,464
     349,306,348
     12,945,147
     1,875,331
     3,436,513Dividends Payable to Third Parties
     116,022,795
     86,959,933
     58,822,847
     -
     -
     -Fines and Claims
     42,549,570
     42,451,290
     30,790,912
     -
     -
     -Research and Development
     10,815,336
     29,938,747
     30,820,199
     7,427,918
     5,988,953
     3,558,712Payables to Tax Institutions
     13,726,011
     -
     -
     23,292,682
     21,655,366
     24,888,080Mitsubishi Contract
     -
     -
     -
     7,361,867
     12,903,931
     8,538,252Social Programs Obligations
     -
     -
     -
     5,348,256
     5,340,747
     -Other accounts payable
     16,528,189
     17,901,203
     37,365,466
     2,351,633
     1,369,646
     2,539,910Total
     976,506,464
     949,308,773
     778,360,284
     58,727,503
     49,133,974
     42,961,467
   See note 19.4 for the description of the liquidity risk management policy.  22.PROVISIONS  22.1Provisions  a)The detail of provisions as of December 31, 2009, December 31, 2008, and January 1, 2008 is as follows:  Provisions
     Current
     Non-Current12-31-2009
     12-31-2008
     01-01-2008
     12-31-2009
     12-31-2008
     01-01-2008ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$Provision for Warranty
     -
     272,336
     288,710
     2,875,372
     8,987,098
     5,610,456Legal Proceedings Provision
     30,233,945
     34,840,889
     23,697,464
     235,390,414
     155,610,665
     161,010,939Decommissioning, Restoration and Rehabilitation Costs
     -
     -
     -
     10,234,267
     2,319,202
     1,852,986Energy and Capacity Purchases Provision
     20,226,885
     28,394,836
     21,620,561
     -
     29,956,993
     30,857,508Supplier and Services Provision
     2,496,326
     2,503,301
     2,772,021
     -
     107,895
     -Employee Benefits Provision
     33,739,527
     29,932,618
     21,561,925
     1,128,270
     1,592
     226,157Other provisions
     13,327,772
     13,587,839
     8,697,073
     658,589
     15,976,128
     465,186Total
     100,024,455
     109,531,819
     78,637,754
     250,286,912
     212,959,573
     200,023,232
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b)Movements in provisions as of December 31, 2009 and December 31, 2008  are as follows:  Warranty
     Legal Proceedings
     Decommissioning, Restoration and Rehabilitation Costs
     Other Provisions
     TotalMovements in ProvisionsBalance at January 1, 2009
     9,259,434
     190,451,554
     2,319,202
     120,461,202
     322,491,392Movements in ProvisionsAdditional Provisions
     906,083
     83,456,936
     8,145,666
     6,800,178
     99,308,863Increase (Decrease) in Existing Provisions
     (360,598)
     16,068,663
     (64,827)
     5,428,891
     21,072,129Acquisitions Through Business Combinations
     -
     (204,714)
     -
     (2,728,637)
     (2,933,351)Provisions Used
     -
     (18,558,588)
     -
     (19,728,719)
     (38,287,307)Unused Provisions Reversed
     -
     (18,722,980)
     -
     (30,725,462)
     (49,448,442)Increase from Time Value of Money Adjustment
     -
     26,940
     91,233
     37,887
     156,060Foreign Currency Translation
     151,197
     7,869,827
     (257,007)
     (7,603,706)
     160,311Other Increases (Decreases)
     (7,080,744)
     5,236,721
     -
     (364,265)
     (2,208,288)Total Movements in Provisions
     (6,384,062)
     75,172,805
     7,915,065
     (48,883,833)
     27,819,975Balance at December 31, 2009
     2,875,372
     265,624,359
     10,234,267
     71,577,369
     350,311,367
   Warranty
     Legal Proceedings
     Decommissioning, Restoration and Rehabilitation Costs
     Other Provisions
     TotalMovements in ProvisionsBalance at January 1, 2008
     5,899,166
     184,708,403
     1,852,986
     86,200,431
     278,660,986Movements in ProvisionsAdditional Provisions
     -
     31,319,499
     -
     18,828,662
     50,148,161Increase (Decrease) in Existing Provisions
     -
     28,945,825
     47,347
     2,310,738
     31,303,910Provision Used
     -
     (19,821,914)
     -
     (7,460,230)
     (27,282,144)Unused Provisions Reversed
     -
     (29,413,843)
     -
     (338)
     (29,414,181)Foreign Currency Translation
     (180,108)
     (619,220)
     412,224
     13,275,023
     12,887,919Other Increases (Decreases)
     3,540,376
     (4,667,196)
     6,645
     7,306,916
     6,186,741Total Movements in Provisions
     3,360,268
     5,743,151
     466,216
     34,260,771
     43,830,406Balance at December 31, 2008
     9,259,434
     190,451,554
     2,319,202
     120,461,202
     322,491,392
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22.2Lawsuits and arbitration proceedings  As of the date of preparation of these interim consolidated financial statements, the following are the most relevant lawsuits involving Enersis S.A. and its subsidiaries: ·Law 25,561, known as Public Emergency and Reformation of Exchange Regime, enacted on January 6, 2002 by the Argentine authorities, withdrew certain terms and conditions from the concession contract entered into by the subsidiary Edesur. In addition, this Law provided that concession contracts involving public services would have to be renegotiated over a reasonable term in order to adapt them to the new circumtances. However, the fact that the concession contract entered into by Edesur was not renegotiated prompted Enersis S.A., Chilectra S.A., Endesa Chile and Elesur S.A. (currently, Chilectra S.A.) to submit in 2003 a petition for arbitration in accordance with the Chilean-Argentine Treaty for Promotion and Protection of Investments, with the International Center for Resolution of Disputes involving Investments (known as CIADI). The filing put forward as main petition that the involved investments would have to be declared expropriated, with ensuing payment of damages totaling US$1,306,875,960. As a subsidiary motion, a payment of damages is requested, totaling US$318,780,600, caused to the investments by a lack of fair and equal treatment; in both cases, subject to a composed interest of 6.9% a year. In addition, the petition sought payment of the damages generated starting on July 1, 2004. Finally, it requested payment of US$102,164,683 to Elesur S.A. (currently, Chilectra S.A) for the loss it suffered in the sale of its shares. On June 15, 2005, the Argentine authorities and Edesur signed the documentation underlying a so-called Acta de Acuerdo (Written Agreement), which wasnt rejected by the Argentine Parliament, and which was later on ratified by the Executive Power of Argentina. The Written Agreement sets forth terms and conditions that modify and supplement the concession contract, and establish changes in the fare, first during a transitory period and then through a thorough fare review process aimed at laying down the conditions for a 5-year period of ordinary fare. Arbitration was suspended in March of 2006 in compliance with the Written Agreement. When suspended, arbitration had reached a stage at which the court had to notify the parties its ruling on the matter of jurisdiction raised by the Republic of Argentina. The current suspension is the consequence of several extensions requested by the plaintiffs. Regarding the most recent extension, dated August 6, 2009, the court had requested the parties to report on the status of the negotiation process envisaged in the Written Agreement. On August 12, 2009, the plaintiffs answered this court request and filed a petition seeking to extend the suspension of the arbitration process for an additional 12 months, beginning on the date of that filing. The Republic of Argentina indicated that it did not object to the arbitration suspension being extended yet again, as requested by the plaintiffs. On August 25, 2009, the arbitration court granted the suspension of arbitration until August 12, 2010. Upon expiration of this extension, however, the court will call on the parties to report on the status of the negotiation process envisaged in the Written Agreement. After this report has been submitted by the parties, the court will issue a ruling as to whether to continue or not with the arbitration.  ·Meridional Servicios, Emprendimientos y Participaciones (hereinafter, Meridional) is a company whose only asset are the rights derived from litigation that it acquired from the construction companies Mistral and CIVEL, which had entered into a contract with Centrais Elétricas Fluminense S.A. (CELF) for the construction of civil works. This contract was cancelled by CELF prior to the privatization, which gave rise to the Brazilian distribution subsidiary called Ampla. Since CELFs assets were transferred to Ampla in the privatization process, in 1998 Meridional sued Ampla, alleging that such assets were transferred in violation of Meridionals rights. It should be pointed out that Ampla only acquired assets from CELF, but it is not CELFs legal successor, because CELF, a State-run company, continues to exist as a separate legal entity. The plaintiff seeks payment of outstanding invoices and contractual damages arising from the cancellation of the contract for construction of civil works. Plaintiff is seeking payment of an amount estimated at US$374.9 million. The lower court ruling was favorable to Ampla, but the plaintiff filed an appeal which was granted. Ampla filed new recourses called Embargos de Declaración, seeking the annulment of the resolution passed on prior recourses and it requested to be granted a new trial. The court issued a resolution on the new recourses on June 2, 2009, that was favorable to Ampla, because it annulled the resolutions issued in the proceedings all the way back until April 14, 2009. In accordance with the resolutions issued on December 1 and 15, 2009, the ruling that granted the recourse filed by Meridional was amended, and the lower court ruling favorable to Ampla and the State of Rio de Janeiro was upheld. Meridional, however, can file recourses against these resolutions.    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·In December of 2002 the Brazilian distribution subsidiary Ampla signed with Enertrade Comercializadora de Energía S.A. (Enertrade) a contract for purchase of electricity lasting 20 years. This contract was sent for evaluation and homologation to Agencia Nacional de Energía Eléctrica (ANEEL), and ANEEL indicated that the price for energy would have to be lower. Based on that decision, Ampla paid for the contract the price authorized by ANEEL. However, in December of 2005 Enertrade sued Ampla in arbitration with Cámara de Conciliación y Arbitraje de la Fundación Getúlio Vargas/RJ. On March 19, 2009 the arbitration court issued a ruling that condemned Ampla: i) to pay the difference between the price set forth in the contract and the amount actually paid in the period from January 1, 2004 to August 28, 2006, updated and with interest; ii) to pay for October to December 2003 an updated price plus interest and a 2% penalty. In addition, the court ruled that the contract had ended on August 28, 2006 and that Ampla owes nothing to Enertrade after that date. Ampla filed a recourse seeking the annulment of the arbitration ruling, including a petition (Anticipación de tutela) asking that execution of the arbitration ruling be suspended until a final ruling be passed in a pending trial between Enertrade vs. ANEEL (called "Mandado de Seguridad"), where administrative approval of the same energy purchase contract taken to arbitration is being discussed. The amount involved is estimated at US$41.3 million. On May 22, 2009 the anticipación de tutela was granted, which suspended the effects of the arbitration ruling. On June 30, 2009 an Enertrade recourse was rejected and the suspension was upheld. On July 9, 2009 an Enertrade petition (agravo de instrumento) against the ruling was rejected. On July 20, 2009 Enertrade filed another recourse (agravo regimental) against the resolution that rejected the previous petition. On August 25, 2009 the recourse (agravo regimental) filed by Enertrade was rejected. Ampla filed a response that included the lower court ruling passed in the trial (mandado de seguranca) of Enertrade vs. ANEEL (on July 7, 2009 a lower court ruling rejected Enertrades allegations). On September 2, 2009 a court order was sent to the CCEE (Cámara de Comercialización de Energía Eléctrica) informing it of the Anticipación de tutela so that the CCEE would suspend the execution of the arbitration ruling until a final decision is passed on the annulment recourse. On September 28, 2009 the ruling passed in the trial between Enertrade vs. ANEEL became final --a ruling that indicated that the parties were obligated to add to the contract the conditions imposed by ANEEL (the price reduction). On November 11, 2009 both parties filed a joint petition requesting suspension of proceedings for 30 days and in December they requested the renovation of that suspension.  ·Companhia Brasileira de Antibióticos (CIBRAN) sued the Brazilian distribution subsidiary Ampla seeking payment of damages for loss of products and raw materials and break-down of machinery, among other things, which allegedly was caused by Amplas poor service between 1987 and May 1994. CIBRAN is also seeking payment of moral damages. The amount involved is estimated at approximately US$45.7 million. The trial is at the early stages where parties must submit their allegations and the court must decide whether or not it will ask them for evidence.  ·In 2007 a State congressman and a federal Congressman both sued the Brazilian distribution subsidiary Coelce, the Brazilian generation subsidiary CGTF, ANEEL, and the Brazilian Federal Union, seeking an immediate recalculation of Coelces fare review index for 2007, and that the acquisition value of the thermal energy be replaced with the cheapest available energy (hydroelectric); the annulment of the agreement for the supply of energy signed on August 31, 2001 by and between Coelce and CGTF because of its high price; and that Coelces fare review calculations should include the additional income earned by Coelce from May to October of 2005. The amount involved in this trial is indeterminate. In November of 2008 a lower court issued a ruling favorable to Coelce/CGTF, rejecting the plaintiffs petition. The plaintiffs did not file any recourse; however, this being a popular action, the ruling must mandatorily be reviewed by the Federal Regional Court (FRC). On December 1, 2009 the trial was declare extinct, on the grounds that the plaintiffs allegations had not chosen the appropriate proceedings. Nevertheless, this court resolution can be appealed, and the period for doing so is still open.   F - 94


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·On October 26, 2009 Tractebel Energía S.A. sued CIEN for alleged failure to perform the Agreement for Purchase and Sale of 300 MW of Wattage with associated energy coming from Argentina entered into on October 20, 1999 by and between CIEN and Centrais Geradoras do Sul do Brasil S.A (Gerasul  currently, Tractebel Energia S.A.). Tractebel Energia S.A. is asking the court to order CIEN to pay a penalty of R$ 117,666,976.00 (U$ 66,753,829.92) plus other fines, for non-availability of wattage and associated energy, and it asked the court to determine those other fines in the ruling. The alleged non-performance would have happened because CIEN would not have guaranteed availability of the wattage committed to Tractebel Energía S.A. in the abovementioned agreement, for a term of 20 years, which would allegedly have occurred since March of 2005. On November 11, 2009 CIEN answered the lawsuit, alleging in summary that the non-availability of energy was caused by the Crisis in Argentina, the country from which CIEN imports all the energy that it delivers, when needed, to Tractebel Energia S.A The defendant also alleges that the Crisis in Argentina was an unexpected event, for which CIEN has no responsibility, and that this situation was even acknowledged by the Brazilian authorities of that period.  ·In the nineties, a large number of Brazilian utility companies filed remedies against the COFINS (Contribution for Financing Social Security) tax, because they considered that the Brazilian constitution exempted them from that levy. The large majority of the companies lost their lawsuits. Our Brazilian distribution subsidiary, AMPLA, won the lawsuit (for the period from 1996 to 2001), because the Tax Authorities forgot to appeal against the second appealable judgment. However, the Public Prosecutor's Office of the Federal Union filed an exceptional petition known as an "action for abrogation" in an attempt to annul the firm ruling in favor of AMPLA. In December, 2003, the Regional Court of Rio de Janeiro confirmed the inadmissibility of the action for abrogation filed by the Federal Union. In December 2007, the Federal Union filed a Special Appeal against the decision of the Court in Rio, which unanimously rejected its previous appeals. This Special Appeal is addressed to the Higher Court of Justice (STJ), Court of Brasilia. In February, 2008, AMPLA was served a writ to present it pleas against the Special Appeal filed by the Federal Union. The Special Appeal was filed without the respective Extraordinary Appeal and there is jurisprudence indicating that they must be filed together, so there are arguments to deem that the Extraordinary Appeal by the Federal Union has become void. In April, 2008 the Federal Regional Court (Court of Rio) handed down a decision in which it did not accept the Special Appeal by the Federal Union, with the sole purpose of taking the discussion on the admissibility of the Action for Abrogation to the Higher Court of Justice (STJ, Court of Brasilia). In September, 2008, the decision for AMPLA to submit its pleas was published. In the same month of September, 2008, AMPLA submitted its pleas. In March, 2009, the Special Appeal filed by the Federal Union was accepted for pleadings to be examined by the STJ. In April, 2009, the decision was published. The above does not change AMPLAs procedural situation, since the preliminary questions regarding the admissibility of the Special Appeal, which were the basis for the rejection by the Court in Rio based on the jurisprudence of the STJ itself, will necessarily have to be analyzed by the STJ. In October, 2009, the STJ rejected the Special Appeal filed by the Federal Union, because it had not been filed together with the Extraordinary Appeal. These grounds for the decision are based on the jurisprudence of the STJ itself. In November, 2009, the sentence rejecting the Special Appeal filed by the Federal Union was published. In November, 2009, the Federal Union filed an Appeal for Reconsideration of Judgment with the STJ. In December, 2009, the STJ rejected unanimously the Appeal for Reconsideration of Judgment filed by the Federal Union. The amount involved is about US$230 million.   ·In December, 2001 the article of the Federal Constitution, on which our Brazilian distribution subsidiary, AMPLA, based its arguments to argue immunity from the COFINS and pursuant to which AMPLA did not pay tax, was amended. There is an article of the Constitution stating that legislative changes come into force 90 days after their publication. Based on that, AMPLA began to pay the COFINS only as of April, 2002. However, the Brazilian Tax Authorities argue that this article of the Constitution only applies to changes in legal regulations, but not to the Constitution itself, whose changes come into force immediately. Furthermore, the Tax Authorities argue that, by reason of the change in AMPLAs tax status (earned to accrued) the taxable amount of the COFINS increased during the first semester of 2002. Notice was given of the proceedings in July 2003. The first appealable decision went against AMPLA and it filed an appeal in October, 2003. In November, 2007, the appeal was ruled on by the court of appeal and the decision was partly favorable to the Treasury in terms of the period in which a change in the Constitution comes into force and partly favorable to AMPLA in terms of the change in the tax status from earned to accrued. In April, 2008, the Ministry of the Treasury filed an appeal against this decision in the Higher Court of Appeal. In October, 2008, AMPLA filed its answer to the appeal and also filed an appeal with the Higher Court to attempt to change that part of the decision that was not favorable to AMPLA. In May, 2008, the Federal Treasury applied interest to the fine imposed. This new interest arises from an internal administrative act (addressed to the tax authorities but for general application) of the tax authorities and has started to be applied uniformly by the Federal Treasury (SRF). The interest on the fine has been calculated by applying the Selic (Special System of Liquidation and Custody: an adjustment index set by the federal government based on the referential interest rate of the Brazilian Central Bank), as of the month after receiving the Record of Infringement. Consequently, since the Record was received in July, 2003, the Selic corresponds to the interest accumulated as of August 2003, which is 81.42%. In August, 2009, AMPLA was notified that the Special Appeal filed by the company had not been admitted to be heard. AMPLA filed another appeal against this resolution with the President of the Higher Court for hearing Tax Issues. The purpose of this appeal is for the Special Appeal to be received. The decision on the Special Appeal filed by the SRF is pending. The appeal filed by AMPLA with the President of the Higher Court for hearing Tax Issues is also pending resolution. The amount involved is US$90 million.    F - 95


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·In order to finance its investment in Coelce, in 1998 our Brazilian distribution subsidiary AMPLA issued FRNs (bonds) for US$350 million expiring in 2008. These were subscribed by Cerj Overseas (a foreign subsidiary of AMPLA). The bonds have a special tax status in that no withholding tax (15% or 25%) should be applied to payments of interest abroad, always provided that, among other requirements, there is no advanced amortization before the average 96 month amortization deadline. In order to acquire these bonds, Cerj Overseas obtained financing with a 6-month debt outside Brazil. At the end of that period (October 1998), due to problems of access to other sources of financing, Cerj Overseas had to obtain re-financing from AMPLA, which made it a loan in reales. The Brazilian Tax Authorities argue that the tax concession was lost in 1998 because the loans in reales made by AMPLA to Cerj Overseas were the equivalent of an advanced amortization of the debt before the 96 month amortization deadline. The Record of Infringement was notified in July, 2005. In August, 2005, AMPLA filed an appeal with the first administrative court of appeal and this was rejected. In April, 2006, an appeal was filed with the Council of Taxpayers (2nd Administrative Level of Appeal) In December, 2007, the Council of Taxpayers ruled completely in favor of AMPLA. It is estimated that putting the sentence into due form and publishing it will take about 6 months. In August, 2009, the sentence of the Council of Taxpayers in favor of AMPLA was written up. The notice of the sentence handed down by the Council of Taxpayers is pending. Once the notice has been issued, the SRF may file a Special Appeal with the Higher Court of Appeal for Tax Issues, within 30 days. The amount involved is about US$405 million.  ·In 2002, the State of Rio de Janeiro (RJ) issued a decree stipulating that the ICMS should be calculated and paid on the 10th, 20th, and 30th of the same month of the accrual. Because of cash problems, our Brazilian distribution center AMPLA continued paying the ICMS under the previous system (payment until the 5th of the day after its accrual). Notwithstanding an informal agreement with the State of Rio de Janeiro, and 2 separate amnesty laws, in October, 2004, the State of Rio de Janeiro drew up proceedings against AMPLA to collect a fine on late payments, which proceedings were appealed against by AMPLA in that same year. In February, 2007, AMPLA was notified of the first appealable administrative decision, which ratified the Proceedings drawn up by the State of RJ. In March 2007, AMPLA filed an appeal with the Council of Taxpayers of the State of RJ (2nd administrative level of appeal). AMPLA won a liminar (a precautionary measure) in its favor that enabled it to file this appeal without having to make a deposit or take out a bond guaranteeing 30% of the value of the updated amount of the proceedings. The ruling by the Council of Taxpayers is pending. The amount involved is US$88 million.   F - 96


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Towards the end of 2002, our Brazilian generating subsidiary CGTF filed a legal action against the Federal Union for the goods imported for the turbo-generator units to be recognized as corresponding to the item Other Generating Sets, in order to be able to avail itself of the 0% rate for Import Tax (II) and for the Tax on Industrialized Products (IPI). The Federal Union argues that the imported goods do not correspond to
generating sets. CGTF won an incidental resolution in its favor allowing it to clear the goods through customs with a 0% rate, subject to a prior legal deposit of R$56 million (US$35.72 million, updated at July, 2009). For its part, in order to prevent the taxes from expiring, the Federal Tax Authorities drew up a Record suspending the enforceability of payment of the tax until the pending legal action against the Federal Union is resolved. Court Proceedings: A resolution was decreed with regard to the legal proceedings against the Federal Union in August, 2007, determining that (i) the expert evidence requested by the plaintiff was not necessary and (ii) a writ should be served on the parties so that, if no appeal is filed, the process will be sent to the Judge for a decision. Faced with the above, in August, 2007, CGTF filed an appeal to guarantee its right, if the lawsuit is judged to be inadmissible, to produce technical evidence in future. In February, 2008, the Ministry of the Treasury submitted its comments on the appeal filed by CGTF and on the expert report of 2005. In April, 2008, CGTF submitted its comments on the technical report submitted by the Ministry of the Treasury. In May, 2008, the process was remitted to the Prosecutors Office of the Ministry of the Treasury and was returned without any comments or statements from the Ministry of the Treasury. In September, 2008, the first appealable sentence completely favorable to CGTF was handed down. The above decision recognized the classification of the Generating Set as pretended by CGTF and determined that the legal deposit shall continue as a guarantee for the process until the final ruling. In September, 2008, the sentence was published. In November, 2008, the Federal Tax Authorities were notified of the first level decision favorable to CGTF. In February, 2009, the Federal Tax Authorities filed an appeal with the Regional Federal Court (TRF). In September, 2009, the incident was resolved definitively in favor of CGTF enabling the goods to be given a 0% tax rate and the equipment to be cleared through customs, subject to a legal deposit. The decision on the appeal filed by the Ministry of the Treasury is pending. Administrative Proceedings: With regard to the Record issued by the Federal Tax Authorities which were appealed against in the first level of appeal: In February, 2006, the decision of the first level of appeal was favorable to CGTF, with the Record declared null and void. The arguments submitted by the company were accepted, since: (i) The Tax Authority failed to submit the legal grounds for the tax classification adopted in the Record, which resulted in the annulment; (ii) the Records tax classification was not properly determined, since it considered each item (each good) imported individually, forgetting the groupings stipulated by Brazilian legislation (this argument would also be valid if the special classification of the Generating Set, which is the object of these legal proceedings, did not prevail) The decision is based on the fact that the Record was drawn up without heeding due legal requirements and formalities, so it was declared null and void; in other words, no decision was handed down regarding the matter of substance. As a result, theoretically the Federal Tax Authorities could draw up another Record meeting the formal requirements, with no deadline for doing so. In October, 2008, the Council of Taxpayers, the second level of administrative appeal, completely ratified the decision by the first level decreeing that the Record of the Federal Tax Authorities was null and void because of procedural irregularities. Consequently, the decision handed down by the second level of administrative appeal was completely favorable to CGTF. After confirmation by the Council of Taxpayers of the administrative decision by the first level of administrative appeal, the Ministry of the Treasury could file an appeal with the higher administrative level of appeal Higher Court of Appeal for Tax Issues. The deadline for filing the above appeal is 15 straight days as of the personal summons. In April, 2009, the decision making the Record null and void because of procedural irregularities was made firm and final, so the Record is extinct. The amount involved is about US$40 million.  ·In 2005, three lawsuits were filed against Endesa Chile, the Treasury and the General Water Board (DGA), which are currently being heard as single legal proceeding, petitioning for the nullity in public law of DGA Resolution 134 giving Endesa the right to non-consumptive use of water to implement the Neltume Power Plant project, with compensation for damages. Alternatively, the lawsuit is filed for compensation for damages allegedly caused to the plaintiffs by the loss of quality of their properties on the shores of Lake Pirehueico, and also by the loss in value of their properties. The amount of these lawsuits has not been determined. The defendants, including Endesa Chile, have rejected these allegations on the grounds that the above resolution meets all legal requirements and exercising this right will not cause any damages to the plaintiffs, among other arguments. At this date, the resolution to take evidence in the case has been decreed, and there are currently appeals for reconsideration of judgment pending resolution in the court.   F - 97


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·There are six legal proceedings brought in 2008 and 2009 against Empresa Eléctrica Pangue S.A., a subsidiary of Endesa Chile, for a total amount of more than Ch$ 53,386,658,000 (approx. US$ 109 million), seeking compensation for damages caused, according to the plaintiffs, by floods caused by the operation of the Pangue power plant, especially resulting from discharges made in July, 2006. Pangue S.A. has submitted pleas for its defense against these lawsuits stating that the operation of the power plant was in line with current regulations and that it acted with due diligence and care, with there being no causal link between the floods and the discharges from the power plant in the period referred to. These proceedings are being heard in different courts and they are currently in the evidence producing stage or have probatory steps pending. In the last quarter, Empresa Eléctrica Pangue S.A. petitioned for all of these proceedings to be combined and heard in a Civil Court in Santiago, and the decision thereof is still pending. Four of the six proceedings were covered by an insurance company, which assumed the risk of about US$ 95 million. Consequently, the risk to the equity of Endesa Chile and subsidiaries was reduced to US$ 14 million. In August, 2009, Pangue won a favorable sentence in one of these proceedings, not covered by insurance, with the lawsuit for Ch$4,927,194,000 (approx US$10 million US dollars) being rejected. The plaintiffs have appealed against this decision by the courts.  ·In 2001, a lawsuit was filed against the Colombian generating subsidiary Emgesa S.A. ESP., Empresa de Energía de Bogotá S.A. ESP. and the Corporación Autónoma Regional by the inhabitants of Sibaté, Department of Cundinamarca, seeking for the defendants to answer jointly for damages caused by the pollution of the El Muña reservoir by pumping of polluted water from the Bogotá river by Emgesa S.A. ESP. Faced with this lawsuit, Emgesa has presented pleas that the company is in no way responsible for these events, since it receives the water already polluted, among other arguments. The total amount of the lawsuit is about US$1,200 million. Emgesa S.A. ESP. petitioned for about 80 public and private entities that discharge into the Bogotá River and, in one way or another have competence in the environmental management of this river basin, to be tied in, so the case file was sent to the State Council and it currently has appeals pending filed with that agency by those entities.  The Management of Enersis S.A. considers that the provisions recorded in the Consolidated Financial Statements adequately cover the risks of the litigation described in this note, so such litigation is not expected to give rise to any additional liabilities to those recorded. Given the characteristics of the risks covered by these provisions, a reasonable schedule of dates of payment, if any, cannot possibly be determined.  F - 98


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23.POST-EMPLOYMENT BENEFIT OBLIGATIONS  23.1General aspects:  Enersis S.A. and certain of its subsidiaries in Chile, Brazil, Colombia, and Argentina sponsor various post-employment benefits for all qualifying employees. These benefits are calculated and recorded in the financial statements according to the criteria described in note 3.l.1., and include the following employee benefits:  a)Defined benefits plans:  ·Complementary pension:The beneficiary is entitled to receive a monthly amount that supplements the pension obtained from the respective social security system.  ·Staff severance indemnities:The beneficiary receives a certain number of contractual salaries upon retirement. Such benefit is subject to a vesting minimum service requirement period, which depending on the company, varies within a range between 5 to 15 years.  ·Electric supply:The beneficiary receives a monthly amount to cover a portion of his/her billed residential electricity consumption.  ·Health benefit:The beneficiary receives additional health coverage to that entitled by his/her social security regime.   b)Defined contribution benefits:  The Group makes contributions to a retirement benefit plan where the beneficiary receives additional pension supplements for his/her retirement, disability, or death.    23.2Details, movements and financial statement presentation:  a)The post-employment obligations associated with defined benefits plans and the related assets plan as of December 31, 2009 and 2008 is detailed as follows:  The amounts included in the consolidated statement of financial position are the following: Balance at12-31-2009
     12-31-2008
     01-01-2008ThCh$
     ThCh$
     ThCh$Post-Employment Benefit Obligation, Current
     4,915,167
     5,147,403
     4,374,795Post-Employment Benefit Obligation, Non-Current
     182,688,990
     175,537,177
     145,482,715Total
     187,604,157
     180,684,580
     149,857,510
   F - 99


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The amount included in the statement of financial position arising from the Groups obligation in respect of its defined benefit plans were as follows:  12-31-2009
     12-31-2008ThCh$
     ThCh$Present value of defined benefit obligations
     510,334,175
     443,320,261(-) Fair value of Plan Assets (*)
     (362,690,337)
     (264,762,082)Total
     147,643,838
     178,558,179Amount Not Recognised as an Asset
     30,942,866
     2,228,966Minimum Funding Requirement (IFRIC 14)
     9,848,229
     -Transfer to Disposal Groups Held for Sale (**)
     (2,149,778)
     -Translation Differences
     1,319,002
     (102,565)Post-Employment Benefit Obligations Total
     187,604,157
     180,684,580
  (*) Plan assets to fund defined benefit plans in our Brazilian subsidiaries (Ampla and Coelce) the remaining defined benefit plans in our other subsidiaries are unfunded.  (**) Corresponds to defined benefit obligations in our subsidiary CAM classified as held for sale (see Note 10). The Brazilian subsidiaries are subject to minimum funding requirements of contributions that must be made to a plan over a given period, in accordance with IFRIC 14 -The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction. The actuary has estimated that only 26.75% will be recovered.  F - 100


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b)The reconciliation of opening and closing balances of the present value of the defined benefit obligation as of December 31, 2009 and 2008 is as follow: Present Value of Post-Employment Benefit Obligations
     ThCh$Opening Balance at January 1, 2008
     450,057,581Current Service Cost
     4,072,922Interest Cost
     47,749,152Actuarial (Gains) Losses
     (17,121,709)Foreign Currency Translation
     1,869,436Benefits Paid
     (43,307,121)Balance at December 31, 2008
     443,320,261Current Service Cost
     5,138,692Interest Cost
     51,679,594Actuarial (Gains) Losses
     35,705,096Foreign Currency Translation
     11,423,745Benefits Paid
     (44,397,635)Business Combinations (***)
     7,464,422Closing Balance at December 31, 2009
     510,334,175
  (***) Balance arising on business combination occurred on February 25, 2009 (See Note 14.2).  As of December 31, 2009, out of the total amount of post-employment benefit obligations a 7.1% (7.7% in 2008) relates to defined benefit plans from Chilean companies; a 76.3% (72.7% in 2008) relates to defined benefit plans from Brazilian companies; a 16.2% (19.2% in 2008) relates to defined benefit plans from Colombian companies and; a 0.4% (0.4% in 2008) relates to defined benefit plans from Argentinean companies.   c)Movements in the present value of the plan assets in the periods presented were as follows: Fair Value of Plan Assets
     ThCh$Balance at January 1, 2008
     (300,200,071)Expected Return
     (33,741,755)Actuarial (Gains) Losses
     48,953,668Foreign Currency Translation
     5,485,422Contributions
     (13,640,982)Benefits Paid
     28,381,636Balance at December 31, 2008
     (264,762,082)Expected Return
     (32,050,585)Actuarial (Gains) Losses
     (60,896,738)Foreign Currency Translation
     (21,040,531)Contributions
     (15,488,990)Benefits Paid
     31,548,589Balance at December 31, 2009
     (362,690,337)
    F - 101


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The amounts included in the fair value of plan assets for equity instruments of the Groups own financial instruments and for property occupied by the Group are as follows: 12-31-2009
     12-31-2008ThCh$
     ThCh$Equity instruments
     8,448,047
     4,856,171Real estate
     1,722,538
     783,771Total
     10,170,585
     5,639,942
   d)The major categories of plan assets at the end of each reporting period are as follows: Category of Plan Assets
     12-31-2009
     12-31-2008ThCh$
     %
     ThCh$
     %Equity instruments (variable income)
     67,097,712
     19%
     60,895,279
     23%Fixed Income Assets
     264,763,946
     73%
     184,009,647
     70%Real Estate Investments
     25,388,324
     7%
     17,209,535
     6%Other
     5,440,355
     1%
     2,647,621
     1%Total
     362,690,337
     100%
     264,762,082
     100%
   The expected rate of return of the plan assets has been estimated considering the projections for financial markets of fixed and variable income instruments, and assuming that asset categories will have a similar weighing from that of the prior year. The return on plan assets was 19.77% as of December 31, 2009 (negative 1.5% in 2008).  e)The total expense recognized in profit or loss in respect of the defined benefit plans as of December 31, 2009 and 2008, are as follows: Expense Recognized in Profit or Loss
     12-31-2009
     12-31-2008ThCh$
     ThCh$Current Service Cost
     5,138,692
     4,072,922Interest Cost
     51,679,594
     47,749,152Expected Return on Plan Assets
     (32,050,585)
     (33,741,755)Expense Recognized in Profit or Loss
     24,767,701
     18,080,319Actuarial (Gains) and Losses
     15,599,453
     34,060,925Total Expense Recognized in Profit or Loss
     40,367,154
     52,141,244
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23.3Other disclosures:  ·Actuarial Hypothesis: As of December 31, 2009 and 2008 the following assumptions were used in the actuarial calculation of defined benefits: Chile
     Brazil
     Colombia
     Argentina12-31-2009
     12-31-2008
     12-31-2009
     12-31-2008
     12-31-2009
     12-31-2008
     12-31-2009
     12-31-2008Discount Rates Used
     6.50%
     6.50%
     10.80% / 11.50%
     9.02% / 12.90%
     11.59%
     10.20%
     13.94%
     18.00%Expected Return on Plan Assets
     N/A
     N/A
     10.28% / 13,02%
     10.20% / 13.95%
     N/A
     N/A
     N/A
     N/AExpected Rate of Salary Increases
     3.00%
     3.00%
     5.77% / 6.59%
     7.1% / 7.6%
     6.48%
     5.20%
     8.00%
     12.00%Mortality Tables
     RV-2004 / RV-85
     RV-2004 / RV-85
     AT-83/AT-49
     AT-83/AT-49
     ISS 1980-1989
     ISS 1980-1989
     CSO 1980
     CSO 1980
  ·Sensitivity: As of December 31, 2009, the sensitivity of the value of the actuarial liability for post-employment benefits to variations of 100 basis points in the discount rate assumes a decrease of ThCh$40,456,334(ThCh$37,410,958as of December 31, 2008) if the rate rises and an increase of ThCh$47,466,911(ThCh$41,369,789as of December 31, 2008) if the rate falls.  ·Future disbursements: The Group expects to make a contribution of ThCh$4,915,167 to the defined benefit plans during the next financial year.  ·Defined contribution: The total expense recognized in the consolidated statement of comprehensive income within line item Employee expenses represents contributions payables to the defined contribution plans by the Group. As December 31, 2009 and 2008 the amounts recognized as expenses were ThCh$2,132,317 and ThCh$1,697,800, respectively.  24.DEFERRED REVENUES  Deferred revenues movements in the accompanying consolidated statement of financial position during 2009, and 2008 are detailed as follows:  Deferred Income
     TotalThCh$Balance at 01/01/2008
     18,048,231Additions
     7,531,271Allocated to Profit (Loss)
     (9,863,444)Translation Differences
     138,842Other
     745,114Balance at 12/31/2008:
     16,600,014Additions
     6,019,649Allocated to Profit (Loss)
     (10,938,144)Translation Differences
     (122,118)Other
     (2,487,473)Balance at 12/31/2009:
     9,071,928
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25.EQUITY.  25.1Equity attributable to the Shareholders of the Company  25.1.1Subscribed and paid capital and number of shares  The share capital as of December 31, 2009 and December 31, 2008 was ThCh$2,824,882,834 and is divided into 32,651,166,465 fully subscribed and paid no par value shares listed at the Bolsa de Comercio de Santiago de Chile, Bolsa Electrónica de Chile, Bolsa de Valores de Valparaíso, New York Stock Exchange (NYSE), and Bolsa de Valores Latinoamericanos de la Bolsa de Madrid (LATIBEX). There has been no change in the numbers of shares during the years 2008 and 2009.  Capital contributions made in 1995 and 2003 resulted in share premiums amounting to ThCh$125,881,577 and ThCh$32,878,071, respectively. The Chilean Companies Law permits the use of the share premium account balance to increase capital and does not establish any specific restrictions as to its use.  25.1.2Dividends  The General Ordinary Shareholders Meeting of Enersis S.A. held on April 1, 2008 approved as dividends policy, that the Board expected to fulfilled in 2008, the distribution as final dividend of an amount equivalent to 70% out of the total net income of year 2008. In addition, it was also intended the distribution of an interim dividend, out of the total net income of year 2008, equivalent to 15% of the net income as of September 30, 2008.  At the Ordinary Board Meeting held on October 29, 2008 it was agreed to distribute, effective December 19, 2008, an interim dividend of Ch$1.53931 per share, out of the net income of year 2008, and equivalent to 15% of the net income as of September 30, 2008.  At the Ordinary Board Meeting held on March 25, 2009 it was to propose to the General Shareholders Meeting the distribution of a final dividend equivalent to 35.27% of the net income of year 2008, at Ch$6.1 per share.  The proposal above modified the dividends policy for the year 2008 which considered a proposed final dividend distribution equivalent to 70% out of the total net income, which was reported as a Relevant Event on March 25, 2009. As informed to the market on that date, the modification in the current dividend policy was due to the fact that the Companys net income grew by 181.9% as compared to prior year and that the global economic crisis made it advisable to have an adequate level of liquidity. Despite the modification, the final dividend propose is the largest in the history of the Company representing a increase of 53% in regards of dividend in prior year.  The following table details the dividends paid as of December 31, 2009:  Dividend No.
     Type of Dividend
     Date of Payment
     Pesos per Share
     Charged to Period72
     Final
     04-20-2005
     0.41654
     200473
     Final
     04-03-2006
     1.00000
     200574
     Interim
     12-26-2006
     1.11000
     200675
     Final
     05-23-2007
     4.89033
     200676
     Interim
     12-27-2007
     0.53119
     200777
     Final
     04-30-2008
     3.41256
     200778
     Interim
     12-19-2008
     1.53931
     200879
     Final
     05-12-2009
     4.56069
     200880
     Interim
     12-17-2009
     2.45677
     2009
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25.2Foreign currency translation  The following table details translation adjustments net of taxes in the consolidated statement of financial position and the consolidated statement of change in equity for the years ended December 31, 2009 and December 31, 2008:  Foreign currency translation
     December 31, 2009
     December 31, 2008ThCh$
     ThCh$Distrilec Inversora S.A.
     (25,140,965)
     (3,123,655)Edesur
     (30,900,116)
     (3,519,749)Ampla Energia
     144,356,459
     115,076,940Ampla Investimentos
     3,572,425
     1,445,939Codensa
     7,206,178
     28,716,101Distrilima
     (3,567,570)
     10,412,874Investluz
     3,681,834
     3,644,801Endesa Brazil
     57,440,851
     15,680,906Central Costanera S.A.
     (5,210,330)
     (3,914,189)Endesa Argentina S.A.
     286,480
     9,403,155GasAtacama
     (9,317,914)
     3,903,739Emgesa
     40,494,476
     62,314,686Hidroelectrica El Chocón S.A.
     (7,744,972)
     (677,259)Generandes Perú S.A.
     9,417,652
     31,521,222Synapsis Group
     (339,801)
     2,370,640Cia A. Multiser. Ltda. Group
     1,248,414
     3,423,263Debt Translation Difference
     7,473,994
     7,859,856Other
     10,521,581
     (708,104)Total
     203,478,676
     283,831,166
   25.3Capital management  The objective of the Company is to maintain an adequate level of capitalization in order to be able to secure its access to the financial markets, so as to fulfill its medium and long-term goals while maximizing the return to its shareholders and maintaining a robust financial position.   25.4Restrictions on the disposals of subsidiaries funds  Certain subsidiaries of the Group must meet certain financial ratio covenants which require them to have a minimum level of equity or other requirements that restrict the transferring of assets to the parent company. The Groups restricted net assets as of December 31, 2009 from its subsidiaries Endesa Chile, Endesa Brasil, and Edelnor totaled ThCh$1,114,779,648, ThCh$ 606,118,032 and ThCh$ 77,418,374, respectively (see Schedule I).  Retained earnings balances representing undistributed income from associated companies as of December 31, 2009 are not significant.   F - 105


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25.5Other reserves  Other reserves within Equity as of December 31, 2009 and 2008 are as follows:  Balance at December 31, 2008
     Movements 2009
     Balance at December 31, 2009ThCh$
     ThCh$
     ThCh$Proposed Dividend Reserve
     (119,138,817)
     (78,930,496)
     (198,069,313)Translation Reserve
     283,831,166
     (80,352,490)
     203,478,676Hedging Reserve
     (276,767,607)
     92,118,271
     (184,649,336)Miscellaneous Other Reserve
     (1,290,961,888)
     (11,227,947)
     (1,302,189,835)TOTAL
     (1,403,037,146)
     (78,392,662)
     (1,481,429,808)
   ·Proposed dividend reservesrepresents the equity decrease arising from recognizing the minimum dividend provision established in article No. 79 of the Stock Corporations Statute (see Note 3.r).  ·Translation reservearises from exchange differences relating to :  -Translation of the financial statements of our foreign operations from their functional currencies to our presentation currency (i.e. Chilean peso) (See Note 2.5.3); and  -Translation of goodwill arising on the acquisition of foreign operations with a functional currency other than the Chilean peso (Note 3.c.1).  ·Hedging reserverepresents the cumulative portion of gains and losses on hedging instruments deemed effective in cash flow hedges (note 3.f.4. and 3.m).  ·Miscellaneous other reservescorresponds to the following:  -Price-level restatement of Issued Share Capital since the date of transition to IFRS, January 1, 2004, until December 31, 2008 (Circular No. 456 of the SVS).  -Translation differences existing as of the date of transition to IFRS (exemption IFRS 1 First-time adoption; see note 40).  -Reserve arising from transactions between entities under common control, mainly explained by the creation of the Endesa Brasil Holding in 2005 and the merger of our Colombian subsidiaries Emgesa and Betania in 2007.   F - 106


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25.6Consolidated other comprehensive income  January - DecemberConsolidated Statement of Other Comprehensive Income
     2009
     2008ThCh$
     ThCh$Shareholders of the Company
     Minority interest
     Total
     Shareholders of the Company
     Minority interest
     TotalNet Income
     660,231,043
     651,096,527
     1,311,327,570
     507,589,633
     526,592,400
     1,034,182,033Other Comprehensive IncomeCharged or Credited to Retained Earnings
     (5,761,858)
     (7,883,860)
     (13,645,718)
     (13,099,057)
     (9,522,499)
     (22,621,556)Actuarial Gains (Losses) on Defined Benefits Pension Plan
     (8,065,153)
     (11,183,889)
     (19,249,042)
     (18,340,596)
     (13,100,691)
     (31,441,287)Tax Effect
     2,303,295
     3,300,029
     5,603,324
     5,241,539
     3,578,192
     8,819,731Charged or Credited to Reserves for Associates
     (9,322,990)
     (6,260,922)
     (15,583,912)
     128,445
     85,703
     214,148Share of other comprehensive income (loss) of associates
     (10,387,426)
     (6,971,138)
     (17,358,564)
     128,445
     85,703
     214,148Tax Effect
     1,064,436
     710,216
     1,774,652
     -
     -
     -Charged or Credited to Available-for-Sale Reserves
     32,134
     17,279
     49,413
     457
     (18)
     439Available-for-Sale Financial Assets
     38,826
     21,115
     59,941
     458
     (22)
     436Tax Effect
     (6,692)
     (3,836)
     (10,528)
     (1)
     4
     3Charged or Credited to Hedging Reserves
     97,181,510
     76,809,215
     173,990,725
     (133,562,204)
     (101,770,066)
     (235,332,270)Cash Flow Hedge
     117,888,548
     92,725,864
     210,614,412
     (156,104,071)
     (122,784,018)
     (278,888,089)Tax Effect
     (20,707,038)
     (15,916,649)
     (36,623,687)
     22,541,867
     21,013,952
     43,555,819Charged or Credited to Translation Reserve
     (80,352,490)
     (157,074,066)
     (237,426,556)
     84,462,951
     106,693,416
     191,156,367Foreign Currency Translation
     (80,352,490)
     (157,074,066)
     (237,426,556)
     84,462,951
     106,693,416
     191,156,367Tax Effect
     -
     -
     -
     -
     -
     -Charged or Credited to Miscellaneous Other Reserves
     (1,937,091)
     -
     (1,937,091)
     -
     -
     -Other Adjustments to Equity
     (2,128,372)
     -
     (2,128,372)
     -
     -
     -Tax Effect
     191,281
     -
     191,281
     -
     -
     -Other Income and Expenses Charged or Credited to Equity, Total
     (160,785)
     (94,392,354)
     (94,553,139)
     (62,069,408)
     (4,513,464)
     (66,582,872)Transfers from Equity to Profit (Loss) for the PeriodCharged or Credited to Hedging Reserves
     (5,063,239)
     (2,534,452)
     (7,597,691)
     (12,355,691)
     (6,469,810)
     (18,825,501)Cash Flow Hedge
     (5,877,009)
     (2,888,347)
     (8,765,356)
     (14,331,528)
     (7,788,132)
     (22,119,660)Tax Effect
     813,770
     353,895
     1,167,665
     1,975,837
     1,318,322
     3,294,159Transfers from Equity to Profit (Loss) for the Period, Total
     (5,063,239)
     (2,534,452)
     (7,597,691)
     (12,355,691)
     (6,469,810)
     (18,825,501)Other Income and Expenses Charged or Credited to Equity, Total
     (5,224,024)
     (96,926,806)
     (102,150,830)
     (74,425,099)
     (10,983,274)
     (85,408,373)Result of Comprehensive Income and Expenses Recognized in the Period, Total
     655,007,019
     554,169,721
     1,209,176,740
     433,164,534
     515,609,126
     948,773,660
   F - 107


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25.7Equity attributable to minority interest  The main changes in minority interests during the years ended December 31, 2009 and 2008 are described below.  On October 9, 2009, our subsidiary Endesa Chile acquired an additional 29.3974% ownership interest of Edegel S.A.A. for a total consideration of US$375 million, resulting in a reduction amounting to ThCh$127,551,963 in the equity attributable to minority interests in such entity.  Likewise, on October 15, 2009, Enersis acquired an additional 24% ownership interest of Empresa de Distribución Eléctrica de Lima Norte S.A.A. (Edelnor) for a total consideration of US$145.7 million, resulting in a reduction amounting to  ThCh$37,886,392 in the equity attributable to minority interests in such entity.  The Boards of Directors of Endesa Chile and Enersis authorized both transactions described above after reviewing external valuations performed by investment banks hired for this purpose, as well as internal valuations performed by the executive management of each company. These acquisitions were made from Generalima S.A.C., a Peruvian company fully owned by Endesa Latinoamérica S.A.U., the direct parent company of Enersis.  26.REVENUES  The detail of revenues presented in the Statement of Comprehensive income for the years ended December 31, 2009 and 2008 is as follows:  Sales
     For the year ended2009
     2008ThCh$
     ThCh$Energy Sales
     5,559,764,526
     5,542,098,737Other Sales
     53,899,011
     44,694,354Sale of Measuring Equipment
     2,822,658
     3,798,709Sale of Electronic Supplies
     39,840,661
     31,760,232Sale of Products and Services
     11,235,692
     9,135,413Other Revenue from Services
     462,444,028
     493,717,929Tolls and Transmission
     231,055,048
     250,583,706Lease of Measuring Equipment
     8,327,754
     9,966,455Public Lighting
     30,603,007
     36,640,855Verifications and Connections
     14,869,456
     22,801,523Engineering Services
     19,960,120
     18,460,358Other Services
     157,628,643
     155,265,032Total Revenue
     6,076,107,565
     6,080,511,020
  Other operating income, total
     For the year ended2009
     2008ThCh$
     ThCh$Revenue from Construction Contracts
     200,493,636
     275,584,358Mutual Supports
     17,809,432
     16,614,018Third Party Services to own and Third Party Fixtures
     24,832,249
     18,887,136Income from Leases
     841,083
     3,112,862Sale of New Businesses
     9,238,121
     13,226,000Other Income
     120,566,352
     151,656,042Other Operating Income, Total
     373,780,873
     479,080,416
     F - 108


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27.CONSUMPTION OF RAW AND SECONDARY MATERIALS  Raw materials and consumables used presented in profit or loss for the 2009 and 2008 period are detailed as follows:  Consumption of raw and secondary materials
     For the year ended2009
     2008ThCh$
     ThCh$Energy Purchases
     (1,559,449,015)
     (1,624,238,985)Cost Fuel Consumed
     (580,237,613)
     (847,411,384)Transportation Costs
     (277,037,093)
     (294,860,018)Costs from Construction Contracts
     (200,493,636)
     (275,584,358)Other Variable Supplies and Services
     (588,633,812)
     (500,856,985)Total
     (3,205,851,169)
     (3,542,951,730)
  28.EMPLOYEE EXPENSES  Employee expenses recognized in profit or loss for the 2009 and 2008 period are detailed as follows:  Employee Expenses
     For the year ended12-31-2009
     12-31-2008ThCh$
     ThCh$Wages and Salaries
     (263,131,572)
     (237,305,114)Post-Employment Benefit Obligation Expense
     (7,271,009)
     (5,770,722)Social Security and Other Contributions
     (52,252,408)
     (40,925,405)Other Employee Expenses
     (14,016,937)
     (6,027,632)Total
     (336,671,926)
     (290,028,873)
  29.DEPRECIATION, AMORTIZATION AND IMPAIRMENT LOSSES  Depreciation, amortization and impairment losses recognized in profit or loss for the 2009 and 2008 period are detailed as follows:  For the year ended2009
     2008ThCh$
     ThCh$Depreciation
     (346,587,547)
     (330,545,457)Amortization
     (107,782,412)
     (87,164,869)Impairment Losses, (*)
     (65,927,354)
     -Total
     (520,297,313)
     (417,710,326)
 (*) See Notes 10 and 15.d.v).   F - 109


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30.OTHER MISCELLANEOUS OPERATING EXPENSES  Other miscellaneous operating expenses for the 2009 and 2008 period are detailed as follows:  Other miscellaneous operating expenses
     For the year ended2009
     2008ThCh$
     ThCh$Other Supplies
     (19,044,042)
     (15,664,928)Environmental Expenses
     (3,859,011)
     (2,830,940)Leases and Rental Cost
     (13,160,909)
     (15,312,905)Repairs and Maintenance
     (65,391,435)
     (69,063,491)Indemnities and Fines
     (20,934,632)
     (11,474,146)Independent Professional Services
     (32,338,812)
     (29,859,748)Oursourced Services
     (85,041,737)
     (76,126,087)Insurance Premiums
     (19,866,916)
     (14,076,198)Marketing, Public Relations and Advertising
     (16,338,026)
     (10,949,704)Travel Expense
     (4,966,691)
     (5,192,877)Taxes and Charges
     (33,351,934)
     (32,094,782)Other Supplies and Services
     (148,137,460)
     (162,604,073)Miscellaneous Other Operating Expenses, Total
     (462,431,605)
     (445,249,879)
   31.FINANCIAL COSTS  The detail of financial costs for the 2009 and 2008 period are detailed as follows:  Financial Costs
     For the year ended2009
     2008ThCh$
     ThCh$Financial Expenses
     (482,472,627)
     (515,108,257)Bank Loans
     (137,274,372)
     (161,830,097)Bonds
     (171,723,898)
     (200,639,335)Finance Leasing
     (3,733,454)
     (4,696,187)Valuation of Financial Derivative
     (19,307,617)
     (18,723,566)Financial Provision
     (12,105,233)
     (18,121,169)Post-Employment Benefit Obligation
     (51,679,594)
     (47,749,152)Other
     (86,648,459)
     (63,348,751)Gain (Loss) for Indexed Assets and Liabilities
     21,781,329
     (62,378,252)Foreign Currency Exchange Differences, Net
     (8,235,253)
     (23,632,778)Positive
     82,015,125
     74,524,243Negative
     (90,250,378)
     (98,157,021)Total Financial Costs
     (468,926,551)
     (601,119,287)
   F - 110


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32.GAIN (LOSS) ON DERECOGNITION OF ASSETS  The detail of this item for the 2009 and 2008 period are detailed as follows:  Gain (loss) on derecognition of assets
     For the year ended2009
     2008ThCh$
     ThCh$Investment Sales
     28,113,548
     964,000Total gain (loss) on derecognition of available-for-sale financial assets
     28,113,548
     964,000Sale of receivables Codensa Hogar
     12,784,152
     -Land Sales
     12,062,054
     -Other Assets
     351,625
     1,539,279Total gain (loss) on sale of non-current assets not held for sale
     25,197,831
     1,539,279
  33.GAIN (LOSS) FROM INVESTMENTS  This account as presented in the accompanying consolidated statements of comprehensive income for the 2009 and 2008 periods are detailed as follows:  Gain (loss) from investments
     For the year ended2009
     2008ThCh$
     ThCh$Cash and Cash Equivalents
     79,364,437
     77,155,433Other Financial Assets
     6,508,618
     9,389,765Expected Return on Plan Assets
     32,050,585
     33,741,755Other Financial Income
     41,884,708
     61,502,064Total
     159,808,348
     181,789,017
    F - 111


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34.INCOME TAX  Income tax as presented in the accompanying consolidated statements of comprehensive income for the 2009 and 2008 periods are detailed herein. Also, the following table reconciles income taxes resulting from applying the general current tax rate to "Net income before taxes" to the income tax expense recorded in the accompanying consolidated statement of comprehensive income for 2009 and 2008:  Income Tax
     For the year ended2009
     2008ThCh$
     ThCh$Current Tax Expense
     (422,830,225)
     (308,467,764)Tax Benefit Effect from Tax Assets Not Previously Recognized
     39,752,182
     19,021,973Adjustments to Current Tax of Prior Period
     12,569,886
     2,842,103Other Current Tax Expense
     (4,276,209)
     (6,191,896)Current Tax Expense, Net
     (374,784,366)
     (292,795,584)Deferred Tax Income (Expense) Relating to Origination and Reversal of Temporary Differences
     7,274,742
     (115,182,582)Tax Benefit Effect from Tax Assets Not Previously Recognized
     1,700,625
     -Other Deferred Tax Income (Expense)
     6,071,389
     (7,924,618)Deferred Tax Income (Expense), Net
     15,046,756
     (123,107,200)Income Tax
     (359,737,610)
     (415,902,784)
  The principal temporary differences are detailed in note 17 a.  Reconciliation of Tax Expense
     2009
     2008ThCh$
     ThCh$Tax Expense Using Statutory Rate
     (284,081,079)
     (246,514,420)Tax Effect of Rates in Other Jurisdictions
     (166,163,264)
     (135,494,792)Tax Effect of Non-Taxable Revenues
     40,858,030
     67,957,672Tax Effect of Non-Tax-Deductible Expenses
     (29,309,173)
     (67,703,775)Tax Effect of Utilization of Previously Unrecognised Tax Losses
     (489,108)
     -Tax Effect of Tax Benefit Not Previously Recognized in Income Statement
     (1,098,324)
     -Tax Effect from Under or Over Provided Tax in Prior Periods
     12,569,886
     2,842,103Price-Level Restatement for Tax Purposes (Investments and Equity)
     67,975,422
     (36,989,572)Total Adjustments to Tax Expense Using Statutory Rate
     (75,656,531)
     (169,388,364)Income Tax
     (359,737,610)
     (415,902,784)
   F - 112


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35.SEGMENT INFORMATION  35.1Segmentation criteria  In performing its activities the Group is organized primarily around its core businesses that are electric energy generation, transmission and distribution. On that basis the Group has established two major business lines.  In addition, segment information has been organized considering geographical areas in which the Group operates, as follows:  ·Chile ·Argentina ·Brazil ·Peru ·Colombia  Given the Groups corporate organization basically matches the business organization and therefore the segments organization, the segment information reported is based on the financial information of the companies forming each segment.  The following tables detail the segment information for years 2009 and 2008.   F - 113


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35.2Generation, distribution and other  Line of Business
     Generation
     Distribution
     Eliminations and Others
     TotalASSETS
     12-31-2009
     12-31-2008
     12-31-2009
     12-31-2008
     12-31-2009
     12-31-2008
     12-31-2009
     12-31-2008ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$CURRENT ASSETS
     1,251,419,545
     1,480,265,451
     1,216,399,232
     1,310,730,553
     103,636,879
     151,725,084
     2,571,455,656
     2,942,721,088Current Operating Assets
     1,251,419,545
     1,480,265,451
     1,216,399,232
     1,310,730,553
     33,276,028
     151,725,084
     2,501,094,805
     2,942,721,088Cash and Cash Equivalents
     619,035,609
     824,235,540
     431,604,221
     312,752,949
     84,260,991
     181,073,474
     1,134,900,821
     1,318,061,963Financial Assets Designated as Fair Value Through Profit or Loss
     1,493,492
     -
     -
     -
     -
     -
     1,493,492
     -Available-for-Sale Financial Assets
     -
     -
     -
     -
     -
     -
     -
     -Other Financial Assets
     42,597
     -
     -
     -
     60
     -
     42,657
     -Trade and Other Receivables, Net
     393,160,225
     413,961,693
     719,323,724
     839,187,870
     26,162,612
     59,917,292
     1,138,646,562
     1,313,066,855Receivables from Related Entities
     120,472,782
     108,026,170
     4,072,112
     71,222,617
     (105,530,662)
     (154,502,095)
     19,014,232
     24,746,692Inventories
     40,201,722
     49,162,077
     16,117,546
     23,115,479
     -
     24,697,605
     56,319,268
     96,975,161Prepayments
     7,829,631
     5,506,358
     2,044,461
     2,571,885
     1,685,348
     815,993
     11,559,440
     8,894,236Current Tax Receivables
     64,023,295
     72,598,690
     22,827,165
     44,024,305
     25,325,492
     36,077,471
     112,175,952
     152,700,466Other Assets
     5,160,192
     6,774,923
     20,410,003
     17,855,448
     1,372,187
     3,645,344
     26,942,382
     28,275,715Non-Current Assets and Disposal Groups Held for Sale
     -
     -
     -
     -
     70,360,851
     -
     70,360,851
     -NON-CURRENT ASSETS
     5,853,309,145
     5,990,716,296
     4,640,589,157
     4,949,968,135
     144,786,363
     (102,229,018)
     10,638,684,665
     10,838,455,413Available-for-Sale Financial Assets
     2,487,796
     2,431,165
     24,920
     8,532,637
     -
     11,531,234
     2,512,716
     22,495,036Other Financial Assets
     1,063,377
     1,655,343
     874
     5,489
     24,681,751
     85,630
     25,746,002
     1,746,462Trade and Other Receivables, Net
     87,673,729
     168,231,089
     105,909,541
     143,013,413
     1,394,143
     8,039,307
     194,977,413
     319,283,809Receivables from Related Entities
     10,958,042
     28,343,916
     210,855
     203,403
     (11,168,897)
     (27,905,983)
     -
     641,336Equity Method Accounted Investments in Associates
     584,075,094
     474,143,761
     683,579,189
     958,803,352
     (1,246,372,822)
     (1,395,113,442)
     21,281,461
     37,833,671Intangible Assets, Net
     132,872,535
     55,501,359
     1,527,202,670
     1,341,125,906
     1,287,398,973
     1,230,266,959
     2,947,474,178
     2,626,894,224Property, Plant and Equipment, Net
     4,859,937,779
     5,066,457,556
     1,996,440,599
     2,131,145,126
     7,692,864
     18,189,449
     6,864,071,242
     7,215,792,131Investment Property
     -
     -
     -
     -
     31,231,839
     26,368,681
     31,231,839
     26,368,681Deferred Tax Assets
     141,136,300
     160,372,989
     265,251,097
     326,249,181
     48,509,124
     24,678,498
     454,896,521
     511,300,668Hedging Assets
     590,622
     -
     1,647,417
     2,488,236
     -
     (1,584)
     2,238,039
     2,486,652Prepayments
     -
     -
     -
     -
     834,131
     1,202,581
     834,131
     1,202,581Other Assets
     32,513,871
     33,579,118
     60,321,995
     38,401,392
     585,256
     429,652
     93,421,122
     72,410,162TOTAL ASSETS
     7,104,728,690
     7,470,981,747
     5,856,988,389
     6,260,698,688
     248,423,241
     49,496,066
     13,210,140,321
     13,781,176,501
   F - 114


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Generation
     Distribution
     Eliminations and Others
     TotalEQUITY AND LIABILITIES
     12-31-2009
     12-31-2008
     12-31-2009
     12-31-2008
     12-31-2009
     12-31-2008
     12-31-2009
     12-31-2008ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$CURRENT LIABILITIES
     1,133,935,750
     1,473,344,526
     1,071,289,696
     1,205,361,294
     (9,837,908)
     24,074,364
     2,195,387,538
     2,702,780,184Current Operating Liabilities
     1,133,935,750
     1,473,344,526
     1,071,289,696
     1,205,361,294
     (60,488,274)
     24,074,364
     2,144,737,172
     2,702,780,184Interest-Bearing Borrowings
     409,233,878
     747,840,574
     247,076,525
     331,982,515
     65,200,917
     193,142,244
     721,511,320
     1,272,965,333Other Financial Liabilities
     696,791
     -
     -
     -
     -
     -
     696,791
     -Trade and Other Payables
     413,827,992
     393,717,721
     487,384,305
     474,938,446
     75,294,167
     80,652,606
     976,506,464
     949,308,773Payables to Related Entities
     133,099,350
     194,563,323
     212,446,858
     219,695,366
     (233,590,429)
     (298,236,701)
     111,955,779
     116,021,988Provisions
     31,787,013
     30,956,395
     46,641,813
     54,099,720
     21,595,629
     24,475,704
     100,024,455
     109,531,819Current Tax Payables
     132,249,173
     94,349,173
     49,105,703
     94,246,461
     3,930,795
     12,679,841
     185,285,671
     201,275,475Other Liabilities
     6,492,209
     8,235,598
     20,340,253
     21,141,977
     3,047,576
     2,703,033
     29,880,038
     32,080,608Deferred Income
     89,440
     58,936
     4,041,514
     6,874,871
     1,388,632
     5,246,477
     5,519,586
     12,180,284Post-Employment Benefit Obligation
     3,448,733
     3,592,982
     1,359,124
     1,411,277
     107,310
     143,144
     4,915,167
     5,147,403Hedging Liabilities
     3,011,171
     29,824
     2,893,601
     970,661
     2,537,129
     3,268,016
     8,441,901
     4,268,501Liabilities Included in Disposal Groups Classified as Held for Sale
     -
     -
     -
     -
     50,650,366
     -
     50,650,366
     -NON-CURRENT LIABILITIES
     2,487,255,434
     2,956,988,183
     1,804,820,750
     1,928,855,532
     345,672,955
     163,421,381
     4,637,749,139
     5,049,265,096Interest-Bearing Borrowings
     1,951,308,556
     2,358,043,952
     1,026,390,282
     1,037,262,002
     346,207,359
     430,040,406
     3,323,906,197
     3,825,346,360Other Financial Liabilities
     -
     -
     -
     -
     -
     -
     -
     -Trade and Other Payables
     24,082,594
     30,185,629
     34,436,935
     18,700,838
     207,974
     247,507
     58,727,503
     49,133,974Payables to Related Entities
     46,997,128
     69,882,786
     181,853,843
     349,826,019
     (225,294,299)
     (410,731,016)
     3,556,672
     8,977,789Provisions
     58,292,397
     42,125,129
     191,993,937
     156,149,013
     578
     14,685,431
     250,286,912
     212,959,573Deferred Tax Liabilities
     352,011,147
     401,135,349
     213,169,128
     220,420,243
     7,869,022
     13,457,739
     573,049,297
     635,013,331Other Liabilities
     21,994,151
     16,632,938
     300,020
     607,622
     12,755,808
     16,583,793
     35,049,979
     33,824,353Deferred Income
     163,596
     233,531
     3,388,746
     4,186,199
     -
     -
     3,552,342
     4,419,730Post-Employment Benefit Obligation
     26,576,882
     27,999,282
     148,308,890
     138,537,673
     7,803,218
     9,000,222
     182,688,990
     175,537,177Hedging Liabilities
     5,828,983
     10,749,587
     4,978,969
     3,165,923
     196,123,295
     90,137,299
     206,931,247
     104,052,809EQUITY
     3,483,537,506
     3,040,649,038
     2,980,877,943
     3,126,481,862
     (87,411,805)
     (137,999,679)
     6,377,003,644
     6,029,131,221Equity Attributable to Equity Holders of Parent
     3,483,537,506
     3,040,649,038
     2,980,877,943
     3,126,481,862
     (87,411,805)
     (137,999,679)
     3,518,479,555
     3,091,314,881Issued Capital
     1,752,378,473
     1,748,283,549
     1,122,271,981
     1,374,366,326
     108,992,029
     (139,007,392)
     2,983,642,483
     2,983,642,483Other Reserves
     307,191,379
     376,720,267
     547,725,434
     475,350,713
     522,177,468
     682,708,215
     (1,481,429,808)
     (1,403,037,145)Retained Earnings
     1,423,967,654
     915,645,222
     1,310,880,528
     1,276,764,823
     (718,581,302)
     (681,700,502)
     2,016,266,880
     1,510,709,543Minority Interest
     -
     -
     -
     -
     -
     -
     2,858,524,089
     2,937,816,340Equity and Liabilities, Total
     7,104,728,690
     7,470,981,747
     5,856,988,389
     6,260,698,688
     248,423,242
     49,496,066
     13,210,140,321
     13,781,176,501
   F - 115


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STATEMENT OF COMPREHENSIVE INCOME
For the years ended December 31, 2009 and 2008
     Generation
     Distribution
     Eliminations and Others
     Total2009
     2008
     2009
     2008
     2009
     2008
     2009
     2008ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$REVENUE
     2,708,357,655
     2,833,397,146
     4,218,449,947
     4,051,041,041
     (476,919,164)
     (324,846,751)
     6,449,888,438
     6,559,591,436Sales
     2,694,012,599
     2,828,078,633
     3,870,340,697
     3,604,689,806
     (488,245,731)
     (352,257,419)
     6,076,107,565
     6,080,511,020Energy Sales
     2,570,529,382
     2,697,746,885
     3,623,447,397
     3,340,331,095
     (634,212,253)
     (495,979,243)
     5,559,764,526
     5,542,098,737Other Sales
     6,009,988
     14,564,928
     9,861,554
     14,821,361
     38,027,469
     15,308,065
     53,899,011
     44,694,354Other Services Rendered
     117,473,229
     115,766,820
     237,031,746
     249,537,350
     107,939,053
     128,413,759
     462,444,028
     493,717,929Other Operating Income
     14,345,056
     5,318,513
     348,109,250
     446,351,235
     11,326,567
     27,410,668
     373,780,873
     479,080,416SUPPLIES AND SERVICES
     (1,058,410,593)
     (1,409,584,454)
     (2,683,194,706)
     (2,536,106,308)
     535,754,130
     402,739,032
     (3,205,851,169)
     (3,542,951,730)Energy Purchases
     (197,058,728)
     (292,347,152)
     (1,997,643,661)
     (1,826,983,648)
     635,253,374
     495,091,815
     (1,559,449,015)
     (1,624,238,985)Fuel Consumption
     (580,234,432)
     (847,407,262)
     -
     -
     (3,181)
     (4,122)
     (580,237,613)
     (847,411,384)Transport Costs
     (177,886,470)
     (191,958,097)
     (119,689,439)
     (121,232,612)
     20,538,816
     18,330,691
     (277,037,093)
     (294,860,018)Other Variable Supplies and Services
     (103,230,963)
     (77,871,943)
     (565,861,606)
     (587,890,048)
     (120,034,879)
     (110,679,352)
     (789,127,448)
     (776,441,343)CONTRIBUTION MARGIN
     1,649,947,062
     1,423,812,692
     1,535,255,241
     1,514,934,733
     58,834,966
     77,892,281
     3,244,037,269
     3,016,639,706Work on Property, Plant and Equipment
     731,901
     500,315
     32,998,618
     32,099,245
     -
     -
     33,730,519
     32,599,560Employee Expenses
     (69,577,977)
     (57,198,723)
     (216,622,884)
     (187,917,987)
     (84,201,584)
     (77,511,723)
     (370,402,445)
     (322,628,433)Other Operating Fixed Costs
     (118,108,486)
     (107,836,118)
     (372,508,591)
     (343,665,770)
     28,185,472
     5,654,628
     (462,431,605)
     (445,847,260)GROSS OPERATING RESULT
     1,462,992,500
     1,259,278,166
     979,122,384
     1,015,450,221
     2,818,854
     6,035,186
     2,444,933,738
     2,280,763,573Amortization
     (270,584,246)
     (215,544,370)
     (217,705,299)
     (191,868,064)
     (32,007,768)
     (9,700,511)
     (520,297,313)
     (417,112,945)OPERATING RESULTS
     1,192,408,254
     1,043,733,796
     761,417,085
     823,582,157
     (29,188,914)
     (3,665,325)
     1,924,636,425
     1,863,650,628FINANCIAL RESULTS
     (186,313,678)
     (243,706,955)
     (99,796,594)
     (159,078,864)
     (23,145,874)
     (16,580,133)
     (309,256,146)
     (419,365,952)Finance Income
     40,841,166
     54,086,804
     117,121,114
     125,109,709
     1,708,125
     2,556,822
     159,670,405
     181,753,335Finance Expense
     (239,569,394)
     (251,422,396)
     (226,454,904)
     (249,354,432)
     (16,448,329)
     (14,331,429)
     (482,472,627)
     (515,108,257)Results from Indexed Units of Accounts
     9,009,669
     (16,686,361)
     458,162
     (3,048,824)
     12,313,498
     (42,643,067)
     21,781,329
     (62,378,252)Exchange Differences
     3,404,881
     (29,685,002)
     9,079,034
     (31,785,317)
     (20,719,168)
     37,837,541
     (8,235,253)
     (23,632,778)Positive
     71,795,866
     48,055,032
     18,584,732
     53,858,472
     (8,365,473)
     (27,389,261)
     82,015,125
     74,524,243Negative
     (68,390,985)
     (77,740,034)
     (9,505,698)
     (85,643,789)
     (12,353,695)
     65,226,802
     (90,250,378)
     (98,157,021)Results of Companies Not Equity-Accounted
     2,233,946
     2,567,160
     82,758,254
     74,875,698
     (82,756,621)
     (74,181,678)
     2,235,579
     3,261,180Results from Other Investments
     (55,494)
     1,016,336
     82,850
     -
     110,587
     (980,654)
     137,943
     35,682Results from the Sale of Assets
     64,430
     (274,282)
     24,938,953
     2,879,810
     28,307,996
     (102,249)
     53,311,379
     2,503,279RESULTS BEFORE TAX
     1,008,337,458
     803,336,055
     769,400,548
     742,258,801
     (106,672,826)
     (95,510,039)
     1,671,065,180
     1,450,084,818corporate Tax
     (201,746,950)
     (221,991,980)
     (178,201,978)
     (169,399,898)
     20,211,318
     (24,510,906)
     (359,737,610)
     (415,902,784)RESULTS AFTER TAX FROM CONTINUING OPERATIONS
     806,590,508
     581,344,075
     591,198,570
     572,858,903
     (86,461,508)
     (120,020,945)
     1,311,327,570
     1,034,182,033Profit (Loss) from Discontinued Operations, Net of Tax
     -
     -
     -
     -
     -
     -
     -
     -RESULTS AFTER TAX FROM DISCONTINUED OPERATIONS
     806,590,508
     581,344,075
     591,198,570
     572,858,903
     (86,461,508)
     (120,020,945)
     1,311,327,570
     1,034,182,033RESULT FOR THE PERIOD
     806,590,508
     581,344,075
     591,198,570
     572,858,903
     (86,461,508)
     (120,020,945)
     1,311,327,570
     1,034,182,033Controlling Company
     -
     -
     -
     -
     -
     -
     660,231,043
     507,589,633Minority Shareholders
     -
     -
     -
     -
     -
     -
     651,096,527
     526,592,399
   F - 116


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Table of Contents


35.3Countries  Country
     Chile
     Argentina
     Brazil
     Colombia
     Peru
     Eliminations
     TotalASSETS
     12-31-2009
     12-31-2008
     12-31-2009
     12-31-2008
     12-31-2009
     12-31-2008
     12-31-2009
     12-31-2008
     12-31-2009
     12-31-2008
     12-31-2009
     12-31-2008
     12-31-2009
     12-31-2008ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$CURRENT ASSETS
     843,756,651
     1,223,089,253
     238,697,969
     257,631,699
     867,294,187
     828,299,705
     566,973,953
     522,055,379
     107,238,468
     143,991,931
     (52,505,572)
     (32,346,879)
     2,571,455,656
     2,942,721,088Current Operating Assets
     843,756,651
     1,223,089,253
     238,697,969
     257,631,699
     867,294,187
     828,299,705
     566,973,953
     522,055,379
     107,238,468
     143,991,931
     (122,866,423)
     (32,346,879)
     2,501,094,805
     2,942,721,088Cash and Cash Equivalents
     285,514,616
     669,733,388
     53,307,697
     71,937,363
     370,493,421
     318,376,138
     395,571,472
     238,027,529
     30,013,615
     19,987,545
     -
     -
     1,134,900,821
     1,318,061,963Financial Assets Designated as Fair Value Through Profit or Loss
     1,493,492
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     1,493,492
     -Other Financial Assets
     42,657
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     42,657
     -Trade and Other Receivables, Net
     453,263,074
     387,852,606
     144,721,842
     141,329,129
     435,142,404
     425,067,711
     154,237,487
     261,127,802
     58,929,971
     95,098,067
     (107,648,217)
     2,591,540
     1,138,646,562
     1,313,066,855Receivables from Related Entities
     12,683,334
     33,838,115
     21,301,343
     20,098,418
     168,850
     272,336
     (117,203)
     88,166
     114,182
     49,734
     (15,136,274)
     (29,600,077)
     19,014,232
     24,746,692Inventories
     20,148,347
     47,576,858
     7,295,836
     5,043,862
     1,512,096
     1,932,071
     12,448,709
     19,564,486
     14,914,280
     22,857,884
     -
     -
     56,319,268
     96,975,161Prepayments
     2,874,553
     2,900,179
     1,884,944
     1,660,865
     1,330,366
     1,268,460
     2,861,108
     -
     2,608,469
     3,064,732
     -
     -
     11,559,440
     8,894,236Current Tax Receivables
     63,465,062
     74,162,793
     1,599,101
     13,139,752
     45,550,462
     65,953,166
     1,393,479
     3,247,396
     249,780
     1,535,701
     (81,932)
     (5,338,342)
     112,175,952
     152,700,466Other Assets
     4,271,516
     7,025,314
     8,587,206
     4,422,310
     13,096,588
     15,429,823
     578,901
     -
     408,171
     1,398,268
     -
     -
     26,942,382
     28,275,715Non-Current Assets and Disposal Groups Held for Sale
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     70,360,851
     -
     70,360,851
     -NON-CURRENT ASSETS
     7,901,624,978
     8,604,916,467
     574,512,830
     846,648,173
     3,670,419,041
     3,372,195,825
     2,113,095,226
     2,432,386,361
     1,150,463,047
     1,640,771,321
     (4,771,430,458)
     (6,058,462,734)
     10,638,684,665
     10,838,455,413Available-for-Sale Financial Assets
     2,512,716
     22,495,036
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     2,512,716
     22,495,036Other Financial Assets
     25,745,128
     1,740,973
     -
     -
     -
     5,489
     874
     -
     -
     -
     -
     -
     25,746,002
     1,746,462Trade and Other Receivables, Net
     13,413,378
     64,765,727
     70,806,123
     106,510,669
     101,549,009
     77,310,431
     8,893,522
     68,853,018
     315,381
     528,563
     -
     1,315,401
     194,977,413
     319,283,809Receivables from Related Entities
     -
     10,796,128
     -
     -
     36,839,087
     43,632,464
     -
     -
     -
     -
     (36,839,087)
     (53,787,256)
     -
     641,336Equity Method Accounted Investments in Associates
     4,767,024,721
     4,533,043,275
     7,966,302
     103,048,991
     1,234,083,877
     1,153,546,084
     1,370
     3,971
     47,596,359
     388,407,091
     (6,035,391,168)
     (6,140,215,741)
     21,281,461
     37,833,671Intangible Assets, Net
     47,179,972
     1,049,208,150
     5,930,802
     7,909,963
     1,484,067,666
     1,297,645,158
     42,308,837
     37,279,978
     14,925,155
     3,846,483
     1,353,061,746
     231,004,492
     2,947,474,178
     2,626,894,224Property, Plant and Equipment, Net
     2,904,691,507
     2,773,073,197
     449,530,241
     583,077,404
     548,867,547
     538,988,383
     1,933,700,358
     2,178,003,420
     1,083,269,232
     1,239,429,357
     (55,987,643)
     (96,779,630)
     6,864,071,242
     7,215,792,131Investment Property
     31,231,839
     26,368,681
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     31,231,839
     26,368,681Deferred Tax Assets
     107,362,302
     121,571,366
     28,687,187
     31,211,237
     185,882,187
     206,723,785
     127,066,216
     146,180,364
     2,172,935
     5,613,916
     3,725,694
     -
     454,896,521
     511,300,668Hedging Assets
     509,760
     -
     -
     -
     -
     -
     -
     -
     1,728,279
     2,488,236
     -
     (1,584)
     2,238,039
     2,486,652Prepayments
     445,622
     301,867
     -
     -
     388,509
     4,695
     -
     896,019
     -
     -
     -
     -
     834,131
     1,202,581Other Assets
     1,508,033
     1,552,067
     11,592,175
     14,889,909
     78,741,159
     54,339,336
     1,124,049
     1,169,591
     455,706
     457,675
     -
     1,584
     93,421,122
     72,410,162TOTAL ASSETS
     8,745,381,629
     9,828,005,720
     813,210,799
     1,104,279,872
     4,537,713,228
     4,200,495,530
     2,680,069,179
     2,954,441,740
     1,257,701,515
     1,784,763,252
     (4,823,936,029)
     (6,090,809,613)
     13,210,140,321
     13,781,176,501
   F - 117


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Table of Contents


Country
     Chile
     Argentina
     Brazil
     Colombia
     Peru
     Eliminations
     TotalEQUITY AND LIABILITIES
     12-31-2009
     12-31-2008
     12-31-2009
     12-31-2008
     12-31-2009
     12-31-2008
     12-31-2009
     12-31-2008
     12-31-2009
     12-31-2008
     12-31-2009
     12-31-2008
     12-31-2009
     12-31-2008ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$CURRENT LIABILITIES
     903,928,510
     1,181,232,488
     315,322,679
     366,528,947
     577,406,981
     577,412,945
     333,334,592
     416,060,542
     122,026,286
     200,383,176
     (56,631,510)
     (38,837,914)
     2,195,387,538
     2,702,780,184Current Operating Liabilities
     903,928,510
     1,181,232,488
     315,322,679
     366,528,947
     577,406,981
     577,412,945
     333,334,592
     416,060,542
     122,026,286
     200,383,176
     (107,281,876)
     (38,837,914)
     2,144,737,172
     2,702,780,184Interest-Bearing Borrowings
     197,643,745
     587,224,377
     71,762,540
     97,375,104
     254,096,043
     252,194,260
     142,035,231
     226,733,609
     55,973,761
     109,437,983
     -
     -
     721,511,320
     1,272,965,333Non-Interest-Bearing Borrowings
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Other Financial Liabilities
     427,613
     -
     275,969
     -
     -
     -
     -
     -
     -
     -
     (6,791)
     -
     696,791
     -Trade and Other Payables
     412,036,076
     369,520,458
     145,853,738
     154,684,014
     259,436,435
     244,743,137
     121,147,948
     118,037,851
     38,025,476
     62,435,513
     6,791
     (112,200)
     976,506,464
     949,308,773Payables to Related Entities
     156,069,449
     80,971,682
     31,800,330
     25,629,066
     31,040,271
     40,808,327
     120,530
     1,023,265
     125,143
     977,020
     (107,199,944)
     (33,387,372)
     111,955,779
     116,021,988Provisions
     52,152,629
     59,531,565
     23,007,266
     33,281,993
     9,409,249
     2,335,635
     3,592,400
     155,616
     11,862,911
     14,227,010
     -
     -
     100,024,455
     109,531,819Current Tax Payables
     71,611,640
     62,712,304
     27,624,545
     39,228,911
     15,799,839
     30,669,793
     57,901,052
     63,620,017
     12,430,527
     10,382,792
     (81,932)
     (5,338,342)
     185,285,671
     201,275,475Other Liabilities
     5,633,284
     6,904,574
     14,845,627
     16,192,868
     2,468,522
     5,086,061
     5,213,615
     2,168,346
     1,718,990
     1,728,759
     -
     -
     29,880,038
     32,080,608Deferred Income
     3,417,493
     9,652,258
     -
     -
     -
     605,071
     242,785
     728,856
     1,859,308
     1,194,099
     -
     -
     5,519,586
     12,180,284Post-Employment Benefit Obligation
     1,714,434
     1,437,336
     119,702
     117,085
     -
     -
     3,081,031
     3,592,982
     -
     -
     -
     -
     4,915,167
     5,147,403Hedging Liabilities
     3,222,147
     3,277,934
     32,962
     19,906
     5,156,622
     970,661
     -
     -
     30,170
     -
     -
     -
     8,441,901
     4,268,501Liabilities Included in Disposal Groups Classified as Held for Sale
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     50,650,366
     -
     50,650,366
     -NON-CURRENT LIABILITIES
     1,929,817,486
     2,289,480,264
     214,399,921
     274,369,648
     1,140,582,690
     1,056,092,637
     817,235,201
     839,411,195
     572,081,308
     637,812,116
     (36,367,467)
     (47,900,764)
     4,637,749,139
     5,049,265,096Interest-Bearing Borrowings
     1,435,038,931
     1,873,213,290
     130,661,954
     168,606,730
     727,927,241
     692,653,348
     682,712,921
     710,441,473
     347,565,150
     380,431,519
     -
     -
     3,323,906,197
     3,825,346,360Other Financial Liabilities
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Trade and Other Payables
     7,570,291
     13,371,269
     478,409
     261,179
     49,957,441
     35,501,526
     721,362
     -
     -
     -
     -
     -
     58,727,503
     49,133,974Payables to Related Entities
     -
     1,263,905
     37,218,338
     43,536,008
     3,556,672
     11,829,367
     -
     -
     -
     -
     (37,218,338)
     (47,651,491)
     3,556,672
     8,977,789Provisions
     16,062,212
     15,805,230
     7,703,251
     8,138,192
     213,128,470
     185,401,228
     2,725,990
     1,907,251
     10,666,989
     1,707,672
     -
     -
     250,286,912
     212,959,573Deferred Tax Liabilities
     216,277,536
     238,270,442
     24,538,307
     35,121,987
     69,347,637
     64,880,029
     51,497,425
     45,473,642
     211,388,392
     251,267,231
     -
     -
     573,049,297
     635,013,331Other Liabilities
     23,005,140
     18,560,403
     11,193,968
     15,458,565
     -
     57,246
     -
     -
     -
     -
     850,871
     (251,861)
     35,049,979
     33,824,353Deferred Income
     3,331,505
     3,980,904
     -
     -
     -
     -
     -
     -
     220,837
     438,826
     -
     -
     3,552,342
     4,419,730Post-Employment Benefit Obligation
     32,408,576
     32,563,502
     1,915,904
     1,756,268
     68,787,007
     59,628,578
     79,577,503
     81,588,829
     -
     -
     -
     -
     182,688,990
     175,537,177Hedging Liabilities
     196,123,295
     92,451,319
     689,790
     1,490,719
     7,878,222
     6,141,315
     -
     -
     2,239,940
     3,966,868
     -
     2,588
     206,931,247
     104,052,809EQUITY
     5,911,635,633
     6,357,292,968
     283,488,199
     463,381,277
     2,819,723,557
     2,566,989,948
     1,529,499,386
     1,698,970,003
     563,593,921
     946,567,960
     (4,730,937,052)
     (6,004,070,935)
     6,377,003,644
     6,029,131,221Equity Attributable to Equity Holders of Parent
     5,911,635,633
     6,357,292,968
     283,488,199
     463,381,277
     2,819,723,557
     2,566,989,948
     1,529,499,386
     1,698,970,003
     302,869,914
     946,567,960
     (4,730,937,052)
     (6,004,070,935)
     3,518,479,555
     3,091,314,881Issued Capital
     5,644,851,403
     5,666,320,827
     231,131,872
     395,166,365
     1,016,332,368
     1,107,319,397
     263,851,437
     303,546,359
     198,134,490
     817,655,898
     (4,370,659,087)
     (5,306,366,363)
     2,983,642,483
     2,983,642,483Treasury Shares
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Other Reserves
     (2,512,367,589)
     (2,619,879,150)
     10,252,450
     12,922,530
     1,361,661,416
     931,559,050
     999,364,778
     1,162,816,010
     50,288,431
     16,121,429
     1,207,170,789
     2,031,239,326
     (1,481,429,808)
     (1,403,037,145)Retained Earnings
     2,779,151,819
     3,310,851,291
     42,103,877
     55,292,382
     441,729,773
     528,111,501
     266,283,171
     232,607,634
     54,446,993
     112,790,633
     (1,567,448,753)
     (2,728,943,898)
     2,016,266,880
     1,510,709,543Minority Interest
     -
     -
     -
     -
     -
     -
     -
     -
     260,724,007
     -
     -
     -
     2,858,524,089
     2,937,816,340Equity and Liabilities, Total
     8,745,381,629
     9,828,005,720
     813,210,799
     1,104,279,872
     4,537,713,228
     4,200,495,530
     2,680,069,179
     2,954,441,740
     1,257,701,515
     1,784,763,252
     (4,823,936,029)
     (6,090,809,613)
     13,210,140,321
     13,781,176,501
   F - 118


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Table of Contents


Country
     Chile
     Argentina
     Brazil
     Colombia
     Peru
     Eliminations
     TotalSTATEMENT OF COMPREHENSIVE INCOME
For the years ended December 31, 2009 and 2008
     2009
     2008
     2009
     2008
     2009
     2008
     2009
     2008
     2009
     2008
     2009
     2008
     2009
     2008ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$REVENUE
     2,278,257,663
     2,555,898,023
     635,269,548
     631,740,097
     1,966,622,276
     1,962,443,529
     1,112,066,747
     974,560,278
     461,518,877
     438,354,558
     (3,846,673)
     (3,405,049)
     6,449,888,438
     6,559,591,436Sales
     2,255,173,128
     2,485,762,894
     621,828,801
     623,593,481
     1,719,422,596
     1,642,118,683
     1,056,077,538
     921,494,866
     427,452,175
     410,946,145
     (3,846,673)
     (3,405,049)
     6,076,107,565
     6,080,511,020Energy Sales
     2,066,428,378
     2,258,614,370
     590,796,228
     588,450,892
     1,551,830,982
     1,494,939,465
     947,677,441
     802,423,873
     403,031,497
     397,670,137
     -
     -
     5,559,764,526
     5,542,098,737Other Sales
     42,402,319
     39,123,276
     (2,619,705)
     (923,184)
     4,180,089
     3,629,769
     6,495,104
     6,772,814
     5,012,398
     (2,533,699)
     (1,571,194)
     (1,374,622)
     53,899,011
     44,694,354Other Services Rendered
     146,342,431
     188,025,248
     33,652,278
     36,065,773
     163,411,525
     143,549,449
     101,904,993
     112,298,179
     19,408,280
     15,809,707
     (2,275,479)
     (2,030,427)
     462,444,028
     493,717,929Other Operating Income
     23,084,535
     70,135,129
     13,440,747
     8,146,616
     247,199,680
     320,324,846
     55,989,209
     53,065,412
     34,066,702
     27,408,413
     -
     -
     373,780,873
     479,080,416SUPPLIES AND SERVICES
     (1,126,641,921)
     (1,441,920,862)
     (365,964,562)
     (370,813,615)
     (1,074,015,467)
     (1,139,232,970)
     (439,598,063)
     (369,319,650)
     (202,514,796)
     (224,934,369)
     2,883,640
     3,269,736
     (3,205,851,169)
     (3,542,951,730)Energy Purchases
     (581,492,020)
     (624,048,664)
     (160,131,967)
     (167,266,666)
     (482,828,022)
     (534,060,340)
     (229,843,920)
     (170,730,018)
     (105,153,086)
     (128,133,297)
     -
     -
     (1,559,449,015)
     (1,624,238,985)Fuel Consumption
     (345,815,766)
     (606,488,766)
     (180,160,003)
     (179,081,276)
     6,826,322
     (1,475,184)
     (20,572,023)
     (10,740,338)
     (40,516,143)
     (49,625,820)
     -
     -
     (580,237,613)
     (847,411,384)Transport Costs
     (107,329,158)
     (122,589,953)
     (6,886,114)
     (5,941,477)
     (43,541,765)
     (42,309,186)
     (105,632,478)
     (109,761,926)
     (13,647,578)
     (14,257,476)
     -
     -
     (277,037,093)
     (294,860,018)Other Variable Supplies and Services
     (92,004,977)
     (88,793,479)
     (18,786,478)
     (18,524,196)
     (554,472,002)
     (561,388,260)
     (83,549,642)
     (78,087,368)
     (43,197,989)
     (32,917,776)
     2,883,640
     3,269,736
     (789,127,448)
     (776,441,343)CONTRIBUTION MARGIN
     1,151,615,742
     1,113,977,161
     269,304,986
     260,926,482
     892,606,809
     823,210,559
     672,468,684
     605,240,628
     259,004,081
     213,420,189
     (963,033)
     (135,313)
     3,244,037,269
     3,016,639,706Work on Property, Plant and Equipment
     2,666,652
     2,786,572
     8,057,055
     9,659,647
     17,007,228
     13,988,133
     3,003,205
     3,403,751
     2,996,379
     2,761,457
     -
     -
     33,730,519
     32,599,560Employee Expenses
     (110,843,668)
     (98,809,277)
     (79,385,952)
     (68,432,786)
     (108,515,145)
     (102,600,391)
     (48,875,837)
     (32,556,642)
     (22,781,843)
     (20,229,337)
     -
     -
     (370,402,445)
     (322,628,433)Other Operating Fixed Costs
     (111,318,149)
     (124,430,959)
     (77,076,137)
     (77,646,187)
     (158,794,504)
     (160,441,991)
     (76,339,935)
     (67,934,089)
     (39,851,180)
     (33,173,638)
     948,300
     17,779,604
     (462,431,605)
     (445,847,260)GROSS OPERATING RESULT
     932,120,577
     893,523,497
     120,899,952
     124,507,156
     642,304,388
     574,156,310
     550,256,117
     508,153,648
     199,367,437
     162,778,671
     (14,733)
     17,644,291
     2,444,933,738
     2,280,763,573Amortization
     (192,196,454)
     (121,891,044)
     (39,971,608)
     (38,618,779)
     (132,590,568)
     (115,046,053)
     (96,444,844)
     (85,343,868)
     (59,093,839)
     (56,213,201)
     -
     -
     (520,297,313)
     (417,112,945)OPERATING RESULTS
     739,924,123
     771,632,453
     80,928,344
     85,888,377
     509,713,820
     459,110,257
     453,811,273
     422,809,780
     140,273,598
     106,565,470
     (14,733)
     17,644,291
     1,924,636,425
     1,863,650,628FINANCIAL RESULTS
     (114,219,912)
     (100,582,441)
     (40,008,868)
     (33,991,662)
     (69,697,374)
     (116,872,511)
     (72,011,415)
     (81,020,937)
     (34,167,002)
     (27,550,531)
     20,848,425
     (59,347,870)
     (309,256,146)
     (419,365,952)Finance Income
     26,321,994
     65,133,484
     9,381,341
     13,252,883
     103,326,143
     121,819,505
     20,075,886
     11,831,792
     3,631,106
     2,318,379
     (3,066,065)
     (32,602,708)
     159,670,405
     181,753,335Finance Expense
     (135,713,458)
     (182,620,847)
     (32,076,508)
     (28,731,330)
     (187,048,645)
     (204,079,510)
     (92,155,200)
     (92,660,863)
     (38,544,881)
     (30,040,734)
     3,066,065
     23,025,027
     (482,472,627)
     (515,108,257)Results from Indexed Units of Accounts
     21,781,329
     (62,378,252)
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     21,781,329
     (62,378,252)Exchange Differences
     (26,609,777)
     79,283,174
     (17,313,701)
     (18,513,215)
     14,025,128
     (34,612,506)
     67,899
     (191,866)
     746,773
     171,824
     20,848,425
     (49,770,189)
     (8,235,253)
     (23,632,778)Positive
     34,338,086
     271,371,140
     3,564,040
     6,412,116
     47,716,990
     59,112,491
     1,887,294
     1,922,331
     2,333,966
     2,087,857
     (7,825,251)
     (266,381,692)
     82,015,125
     74,524,243Negative
     (60,947,863)
     (192,087,966)
     (20,877,741)
     (24,925,331)
     (33,691,862)
     (93,724,997)
     (1,819,395)
     (2,114,197)
     (1,587,193)
     (1,916,033)
     28,673,676
     216,611,503
     (90,250,378)
     (98,157,021)Results of Companies Not Equity-Accounted
     (8,074,230)
     6,515,223
     374,621
     3,309,096
     -
     44,465
     -
     -
     9,935,172
     -
     16
     (6,607,604)
     2,235,579
     3,261,180Negative Consolidation Difference
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Results from Other Investments
     172,804
     (980,654)
     2,683,755
     -
     -
     -
     (34,772)
     252,022
     -
     764,314
     (2,683,844)
     -
     137,943
     35,682Results from the Sale of Assets
     40,169,904
     745,342
     -
     -
     486,834
     291,052
     12,851,414
     74,570
     (196,773)
     1,469,753
     -
     (77,438)
     53,311,379
     2,503,279RESULTS BEFORE TAX
     657,972,689
     677,329,923
     43,977,852
     55,205,811
     440,503,280
     342,573,263
     394,616,500
     342,115,435
     115,844,995
     81,249,006
     18,149,864
     (48,388,621)
     1,671,065,180
     1,450,084,818corporate Tax
     (68,971,765)
     (189,164,031)
     (15,197,010)
     (19,940,788)
     (107,407,226)
     (67,172,932)
     (127,250,804)
     (108,259,160)
     (40,910,805)
     (31,365,873)
     -
     -
     (359,737,610)
     (415,902,784)RESULTS AFTER TAX FROM CONTINUING OPERATIONS
     589,000,924
     488,165,892
     28,780,842
     35,265,023
     333,096,054
     275,400,331
     267,365,696
     233,856,275
     74,934,190
     49,883,133
     18,149,864
     (48,388,621)
     1,311,327,570
     1,034,182,033Profit (Loss) from Discontinued Operations, Net of Tax
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -RESULTS AFTER TAX FROM DISCONTINUED OPERATIONS
     589,000,924
     488,165,892
     28,780,842
     35,265,023
     333,096,054
     275,400,331
     267,365,696
     233,856,275
     74,934,190
     49,883,133
     18,149,864
     (48,388,621)
     1,311,327,570
     1,034,182,033RESULT FOR THE PERIOD
     589,000,924
     488,165,892
     28,780,842
     35,265,023
     333,096,054
     275,400,331
     267,365,696
     233,856,275
     74,934,190
     49,883,133
     18,149,864
     (48,388,621)
     1,311,327,570
     1,034,182,033Controlling Company
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     (581,163,091)
     660,231,043
     507,589,633Minority Shareholders
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     532,774,470
     651,096,527
     526,592,399
   F - 119


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Table of Contents


35.4Generation and distribution by countries  a)Generation  Line of Business
     
     GenerationCountry
     Chile
     Argentina
     Brazil
     Colombia
     Peru
     Eliminations
     TotalASSETS
     12-31-2009
     12-31-2008
     12-31-2009
     12-31-2008
     12-31-2009
     12-31-2008
     12-31-2009
     12-31-2008
     12-31-2009
     12-31-2008
     12-31-2009
     12-31-2008
     12-31-2009
     12-31-2008ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$CURRENT ASSETS
     507,744,040
     824,606,125
     140,991,440
     119,592,220
     306,278,528
     239,813,003
     256,813,794
     236,178,551
     54,343,007
     74,222,033
     (14,751,264)
     (14,146,481)
     1,251,419,545
     1,480,265,451Current Operating Assets
     507,744,040
     824,606,125
     140,991,440
     119,592,220
     306,278,528
     239,813,003
     256,813,794
     236,178,551
     54,343,007
     74,222,033
     (14,751,264)
     (14,146,481)
     1,251,419,545
     1,480,265,451Cash and Cash Equivalents
     239,557,586
     531,859,703
     24,950,525
     34,344,970
     172,292,830
     113,019,565
     160,939,980
     133,927,140
     21,294,688
     11,084,162
     -
     -
     619,035,609
     824,235,540Financial Assets Designated as Fair Value Through Profit or Loss
     1,493,492
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     1,493,492
     -Other Financial Assets
     42,597
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     42,597
     -Trade and Other Receivables, Net
     165,592,963
     162,550,837
     88,133,531
     62,181,317
     80,628,076
     80,337,925
     55,169,859
     69,249,693
     11,073,405
     40,513,086
     (7,437,609)
     (871,165)
     393,160,225
     413,961,693Receivables from Related Entities
     35,218,885
     45,806,591
     18,151,446
     17,835,453
     32,909,657
     25,478,020
     32,526,869
     26,442,021
     8,979,580
     5,739,401
     (7,313,655)
     (13,275,316)
     120,472,782
     108,026,170Inventories
     18,778,149
     26,585,987
     3,803,384
     2,207,392
     22,134
     20,331
     6,622,526
     6,559,697
     10,975,529
     13,788,670
     -
     -
     40,201,722
     49,162,077Prepayments
     2,138,737
     1,876,417
     1,404,934
     1,233,456
     714,402
     827,859
     1,554,560
     -
     2,016,998
     1,568,626
     -
     -
     7,829,631
     5,506,358Current Tax Receivables
     44,053,507
     52,051,837
     255,552
     713,030
     19,711,429
     18,305,735
     -
     -
     2,807
     1,528,088
     -
     -
     64,023,295
     72,598,690Other Assets
     868,124
     3,874,753
     4,292,068
     1,076,602
     -
     1,823,568
     -
     -
     -
     -
     -
     -
     5,160,192
     6,774,923Non-Current Assets and Disposal Groups Held for Sale
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -NON-CURRENT ASSETS
     3,993,095,099
     3,878,477,491
     249,643,009
     337,193,034
     676,395,960
     671,483,459
     1,228,326,578
     1,423,563,041
     785,935,394
     901,056,800
     (1,080,086,895)
     (1,221,057,529)
     5,853,309,145
     5,990,716,296Available-for-Sale Financial Assets
     2,487,796
     2,431,165
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     2,487,796
     2,431,165Other Financial Assets
     1,063,377
     1,655,343
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     1,063,377
     1,655,343Trade and Other Receivables, Net
     2,378,486
     57,079,072
     62,959,282
     92,637,976
     19,307,193
     15,428,479
     3,028,768
     3,085,562
     -
     -
     -
     -
     87,673,729
     168,231,089Receivables from Related Entities
     -
     7,575,486
     -
     -
     47,710,556
     71,889,189
     -
     -
     -
     -
     (36,752,514)
     (51,120,759)
     10,958,042
     28,343,916Equity Method Accounted Investments in Associates
     1,598,184,456
     1,523,350,874
     3,297,780
     38,522
     11,308,690
     (2,520,346)
     1,366
     -
     47,596,359
     53,044,383
     (1,076,313,557)
     (1,099,769,672)
     584,075,094
     474,143,761Other Equity Method Accounted Investments
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Intangible Assets, Net
     8,021,312
     34,614,920
     3,026,987
     369,325
     4,055,751
     1,077,908
     17,245,016
     19,239,677
     11,556,650
     199,529
     88,966,819
     -
     132,872,535
     55,501,359Property, Plant and Equipment, Net
     2,359,882,964
     2,228,924,622
     154,533,019
     216,781,351
     528,479,286
     517,711,306
     1,148,817,647
     1,331,396,777
     724,212,506
     841,810,598
     (55,987,643)
     (70,167,098)
     4,859,937,779
     5,066,457,556Investment Property
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Deferred Tax Assets
     20,016,869
     21,980,616
     15,020,305
     13,794,109
     45,805,582
     50,382,215
     58,141,132
     68,671,434
     2,152,412
     5,544,615
     -
     -
     141,136,300
     160,372,989Hedging Assets
     509,760
     -
     -
     -
     -
     -
     -
     -
     80,862
     -
     -
     -
     590,622
     -Other Assets
     550,079
     865,393
     10,805,636
     13,571,751
     19,728,902
     17,514,708
     1,092,649
     1,169,591
     336,605
     457,675
     -
     -
     32,513,871
     33,579,118TOTAL ASSETS
     4,500,839,139
     4,703,083,616
     390,634,449
     456,785,254
     982,674,488
     911,296,462
     1,485,140,372
     1,659,741,592
     840,278,401
     975,278,833
     (1,094,838,159)
     (1,235,204,010)
     7,104,728,690
     7,470,981,747
   F - 120


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Table of Contents


Line of Business
     GenerationCountry
     Chile
     Argentina
     Brazil
     Colombia
     Peru
     Eliminations
     TotalEQUITY AND LIABILITIES
     12-31-2009
     12-31-2008
     12-31-2009
     12-31-2008
     12-31-2009
     12-31-2008
     12-31-2009
     12-31-2008
     12-31-2009
     12-31-2008
     12-31-2009
     12-31-2008
     12-31-2009
     12-31-2008ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$CURRENT LIABILITIES
     625,965,349
     817,935,457
     143,720,453
     156,677,913
     180,531,897
     116,891,475
     130,634,275
     282,665,428
     71,313,577
     121,017,734
     (18,229,801)
     (21,843,481)
     1,133,935,750
     1,473,344,526Current Operating Liabilities
     625,965,349
     817,935,457
     143,720,453
     156,677,913
     180,531,897
     116,891,475
     130,634,275
     282,665,428
     71,313,577
     121,017,734
     (18,229,801)
     (21,843,481)
     1,133,935,750
     1,473,344,526Interest-Bearing Borrowings
     188,704,590
     434,922,470
     61,178,560
     80,018,983
     63,877,935
     7,897,753
     57,137,900
     148,527,035
     38,334,893
     76,474,333
     -
     -
     409,233,878
     747,840,574Other Financial Liabilities
     420,822
     -
     275,969
     -
     -
     -
     -
     -
     -
     -
     -
     -
     696,791
     -Trade and Other Payables
     279,642,827
     244,668,613
     30,014,055
     39,995,905
     55,325,502
     47,464,702
     28,526,181
     23,502,230
     20,319,427
     38,086,271
     -
     -
     413,827,992
     393,717,721Payables to Related Entities
     70,031,934
     75,452,218
     29,317,861
     23,734,343
     49,239,836
     51,393,375
     2,477,464
     65,570,261
     262,056
     256,607
     (18,229,801)
     (21,843,481)
     133,099,350
     194,563,323Provisions
     25,922,905
     26,494,199
     1,163,928
     1,108,306
     1,883,131
     817,008
     26,684
     -
     2,790,365
     2,536,882
     -
     -
     31,787,013
     30,956,395Current Tax Payables
     57,461,125
     31,637,347
     21,511,319
     11,531,357
     7,912,298
     9,318,637
     37,298,367
     39,446,971
     8,066,064
     2,414,861
     -
     -
     132,249,173
     94,349,173Other Liabilities
     2,638,986
     4,691,756
     225,799
     269,113
     4
     -
     2,086,648
     2,025,949
     1,540,772
     1,248,780
     -
     -
     6,492,209
     8,235,598Deferred Income
     89,440
     58,936
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     89,440
     58,936Post-Employment Benefit Obligation
     367,702
     -
     -
     -
     -
     -
     3,081,031
     3,592,982
     -
     -
     -
     -
     3,448,733
     3,592,982Hedging Liabilities
     685,018
     9,918
     32,962
     19,906
     2,293,191
     -
     -
     -
     -
     -
     -
     -
     3,011,171
     29,824Liabilities Included in Disposal Groups Classified as Held for Sale
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -NON-CURRENT LIABILITIES
     1,310,207,063
     1,676,340,495
     160,157,823
     208,271,706
     270,850,843
     357,849,898
     424,071,893
     342,424,533
     358,335,279
     415,637,559
     (36,367,467)
     (43,536,008)
     2,487,255,434
     2,956,988,183Interest-Bearing Borrowings
     1,089,852,354
     1,445,905,323
     97,956,798
     129,801,713
     159,327,589
     223,499,654
     406,377,244
     322,668,484
     197,794,571
     236,168,778
     -
     -
     1,951,308,556
     2,358,043,952Trade and Other Payables
     7,361,867
     13,212,182
     -
     -
     16,720,727
     16,973,447
     -
     -
     -
     -
     -
     -
     24,082,594
     30,185,629Payables to Related Entities
     76,986
     78,859
     37,218,338
     43,536,008
     46,920,142
     69,803,927
     -
     -
     -
     -
     (37,218,338)
     (43,536,008)
     46,997,128
     69,882,786Provisions
     9,246,395
     1,093,483
     -
     -
     38,132,390
     38,944,091
     430,975
     571,426
     10,482,637
     1,516,129
     -
     -
     58,292,397
     42,125,129Deferred Tax Liabilities
     184,228,532
     203,427,245
     13,113,742
     18,547,930
     6,850,742
     5,174,390
     -
     -
     147,818,131
     173,985,784
     -
     -
     352,011,147
     401,135,349Other Liabilities
     9,964,125
     1,258,605
     11,179,155
     15,374,333
     -
     -
     -
     -
     -
     -
     850,871
     -
     21,994,151
     16,632,938Deferred Income
     163,596
     233,531
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     163,596
     233,531Post-Employment Benefit Obligation
     9,313,208
     8,814,659
     -
     -
     -
     -
     17,263,674
     19,184,623
     -
     -
     -
     -
     26,576,882
     27,999,282Hedging Liabilities
     -
     2,316,608
     689,790
     1,011,722
     2,899,253
     3,454,389
     -
     -
     2,239,940
     3,966,868
     -
     -
     5,828,983
     10,749,587EQUITY
     2,564,666,727
     2,208,807,664
     86,756,173
     91,835,635
     531,291,748
     436,555,089
     930,434,204
     1,034,651,631
     410,629,545
     438,623,540
     (1,040,240,891)
     (1,169,824,521)
     3,483,537,506
     3,040,649,038Equity Attributable to Equity Holders of Parent
     2,564,666,727
     2,208,807,664
     86,756,173
     91,835,635
     531,291,748
     436,555,089
     930,434,204
     1,034,651,631
     410,629,545
     438,623,540
     (1,040,240,891)
     (1,169,824,521)
     3,483,537,506
     3,040,649,038Issued Capital
     2,114,323,325
     2,135,893,727
     92,185,037
     99,454,122
     203,659,553
     197,716,155
     259,460,190
     298,494,955
     164,297,758
     457,473,813
     (1,081,547,390)
     (1,440,749,223)
     1,752,378,473
     1,748,283,549Other Reserves
     (683,420,776)
     (850,292,883)
     (9,127,755)
     (13,762,494)
     203,174,861
     128,650,811
     532,944,218
     620,159,057
     224,415,743
     (49,621,694)
     39,205,088
     541,587,470
     307,191,379
     376,720,267Retained Earnings
     1,133,764,178
     923,206,820
     3,698,891
     6,144,007
     124,457,334
     110,188,123
     138,029,796
     115,997,619
     21,916,044
     30,771,421
     2,101,411
     (270,662,768)
     1,423,967,654
     915,645,222Minority Interest
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Equity and Liabilities, Total
     4,500,839,139
     4,703,083,616
     390,634,449
     456,785,254
     982,674,488
     911,296,462
     1,485,140,372
     1,659,741,592
     840,278,401
     975,278,833
     (1,094,838,159)
     (1,235,204,010)
     7,104,728,690
     7,470,981,747
   F - 121


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Table of Contents


Line of Business
     GenerationCountry
     Chile
     Argentina
     Brazil
     Colombia
     Peru
     Eliminations
     TotalSTATEMENT OF COMPREHENSIVE INCOME
For the years ended December 31, 2009 and 2008
     2009
     2008
     2009
     2008
     2009
     2008
     2009
     2008
     2009
     2008
     2009
     2008
     2009
     2008ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$REVENUE
     1,373,230,894
     1,609,158,073
     303,112,035
     291,376,414
     318,321,960
     322,895,567
     500,964,413
     401,470,271
     213,624,981
     208,496,821
     (896,628)
     -
     2,708,357,655
     2,833,397,146Sales
     1,367,051,056
     1,607,534,965
     299,912,430
     291,207,849
     314,667,204
     322,415,815
     500,829,922
     401,257,389
     212,448,615
     205,662,615
     (896,628)
     -
     2,694,012,599
     2,828,078,633Energy Sales
     1,349,609,938
     1,551,715,509
     293,388,675
     284,077,914
     224,502,356
     256,787,667
     500,175,971
     400,576,991
     202,852,442
     204,588,804
     -
     -
     2,570,529,382
     2,697,746,885Other Sales
     6,009,988
     14,564,928
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     6,009,988
     14,564,928Other Services Rendered
     11,431,130
     41,254,528
     6,523,755
     7,129,935
     90,164,848
     65,628,148
     653,951
     680,398
     9,596,173
     1,073,811
     (896,628)
     -
     117,473,229
     115,766,820Other Operating Income
     6,179,838
     1,623,108
     3,199,605
     168,565
     3,654,756
     479,752
     134,491
     212,882
     1,176,366
     2,834,206
     -
     -
     14,345,056
     5,318,513SUPPLIES AND SERVICES
     (511,521,900)
     (871,056,362)
     (208,539,466)
     (206,239,901)
     (82,267,885)
     (105,146,536)
     (184,067,482)
     (128,688,480)
     (72,013,860)
     (98,453,175)
     -
     -
     (1,058,410,593)
     (1,409,584,454)Energy Purchases
     (52,310,897)
     (134,937,913)
     (9,375,553)
     (12,067,418)
     (32,746,221)
     (67,914,740)
     (91,955,452)
     (47,123,986)
     (10,670,605)
     (30,303,095)
     -
     -
     (197,058,728)
     (292,347,152)Fuel Consumption
     (345,812,585)
     (606,484,644)
     (180,160,003)
     (179,081,276)
     6,826,322
     (1,475,184)
     (20,572,023)
     (10,740,338)
     (40,516,143)
     (49,625,820)
     -
     -
     (580,234,432)
     (847,407,262)Transport Costs
     (107,314,035)
     (122,578,858)
     (5,363,800)
     (4,689,649)
     (4,851,240)
     (4,644,568)
     (46,663,960)
     (45,787,546)
     (13,693,435)
     (14,257,476)
     -
     -
     (177,886,470)
     (191,958,097)Other Variable Supplies
and Services
     (6,084,383)
     (7,054,947)
     (13,640,110)
     (10,401,558)
     (51,496,746)
     (31,112,044)
     (24,876,047)
     (25,036,610)
     (7,133,677)
     (4,266,784)
     -
     -
     (103,230,963)
     (77,871,943)CONTRIBUTION MARGIN
     861,708,994
     738,101,711
     94,572,569
     85,136,513
     236,054,075
     217,749,031
     316,896,931
     272,781,791
     141,611,121
     110,043,646
     (896,628)
     -
     1,649,947,062
     1,423,812,692Work on Property, Plant and Equipment
     -
     -
     -
     -
     -
     -
     517,847
     330,981
     214,054
     169,334
     -
     -
     731,901
     500,315Employee Expenses
     (29,654,313)
     (25,162,701)
     (11,009,053)
     (9,040,946)
     (11,417,189)
     (9,425,455)
     (10,959,497)
     (7,918,996)
     (6,537,925)
     (5,650,625)
     -
     -
     (69,577,977)
     (57,198,723)Other Operating Fixed Costs
     (51,829,666)
     (49,242,289)
     (12,461,750)
     (11,769,971)
     (14,560,167)
     (13,389,523)
     (19,127,781)
     (17,815,369)
     (21,025,750)
     (16,383,207)
     896,628
     764,241
     (118,108,486)
     (107,836,118)GROSS OPERATING RESULT
     780,225,015
     663,696,721
     71,101,766
     64,325,596
     210,076,719
     194,934,053
     287,327,500
     247,378,407
     114,261,500
     88,179,148
     -
     764,241
     1,462,992,500
     1,259,278,166Amortization
     (140,184,964)
     (95,960,199)
     (23,365,251)
     (21,474,934)
     (32,305,072)
     (31,315,802)
     (36,516,121)
     (30,560,196)
     (38,212,838)
     (36,233,239)
     -
     -
     (270,584,246)
     (215,544,370)OPERATING RESULTS
     640,040,051
     567,736,522
     47,736,515
     42,850,662
     177,771,647
     163,618,251
     250,811,379
     216,818,211
     76,048,662
     51,945,909
     -
     764,241
     1,192,408,254
     1,043,733,796FINANCIAL RESULTS
     (89,797,956)
     (103,738,107)
     (33,772,058)
     (32,325,027)
     (25,088,330)
     (39,128,021)
     (42,513,775)
     (43,391,504)
     (23,600,707)
     (15,329,863)
     28,459,148
     (9,794,433)
     (186,313,678)
     (243,706,955)Finance Income
     9,495,037
     16,185,633
     2,507,846
     3,255,124
     18,523,222
     32,285,675
     11,968,380
     5,364,390
     1,341,180
     248,487
     (2,994,499)
     (3,252,505)
     40,841,166
     54,086,804Finance Expense
     (90,931,585)
     (120,459,878)
     (19,226,132)
     (16,877,948)
     (52,183,133)
     (53,210,680)
     (54,646,985)
     (48,548,045)
     (25,576,058)
     (15,578,350)
     2,994,499
     3,252,505
     (239,569,394)
     (251,422,396)Results from Indexed Units  of Accounts
     9,009,669
     (16,686,361)
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     9,009,669
     (16,686,361)Exchange Differences
     (17,371,077)
     17,222,499
     (17,053,772)
     (18,702,203)
     8,571,581
     (18,203,016)
     164,830
     (207,849)
     634,171
     -
     28,459,148
     (9,794,433)
     3,404,881
     (29,685,002)Positive
     28,981,945
     47,547,505
     2,092,050
     1,443,093
     39,823,108
     12,692,663
     263,663
     128,111
     635,100
     -
     -
     (13,756,340)
     71,795,866
     48,055,032Negative
     (46,353,022)
     (30,325,006)
     (19,145,822)
     (20,145,296)
     (31,251,527)
     (30,895,679)
     (98,833)
     (335,960)
     (929)
     -
     28,459,148
     3,961,907
     (68,390,985)
     (77,740,034)Results of Companies Not Equity-Accounted
     (8,074,214)
     2,567,160
     372,988
     -
     -
     -
     -
     -
     9,935,172
     -
     -
     -
     2,233,946
     2,567,160Results from Other Investments
     (20,722)
     -
     -
     -
     -
     -
     (34,772)
     252,022
     -
     764,314
     -
     -
     (55,494)
     1,016,336Results from the Sale of Assets
     34,186
     (336,047)
     -
     -
     25,505
     (2,413)
     83,708
     167,699
     (78,969)
     (103,521)
     -
     -
     64,430
     (274,282)RESULTS BEFORE TAX
     542,181,345
     466,229,528
     14,337,445
     10,525,635
     152,708,822
     124,487,817
     208,346,540
     173,846,428
     62,304,158
     37,276,839
     28,459,148
     (9,030,192)
     1,008,337,458
     803,336,055Corporate Tax
     (76,281,986)
     (131,655,968)
     (5,927,003)
     (4,381,628)
     (28,251,488)
     (14,003,436)
     (69,788,953)
     (57,450,682)
     (21,497,520)
     (14,500,266)
     -
     -
     (201,746,950)
     (221,991,980)RESULTS AFTER TAX FROM CONTINUING OPERATIONS
     465,899,359
     334,573,560
     8,410,442
     6,144,007
     124,457,334
     110,484,381
     138,557,587
     116,395,746
     40,806,638
     22,776,573
     28,459,148
     (9,030,192)
     806,590,508
     581,344,075Profit (Loss) from Discontinued Operations, Net of Tax
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -RESULTS AFTER TAX FROM DISCONTINUED OPERATIONS
     465,899,359
     334,573,560
     8,410,442
     6,144,007
     124,457,334
     110,484,381
     138,557,587
     116,395,746
     40,806,638
     22,776,573
     28,459,148
     (9,030,192)
     806,590,508
     581,344,075RESULT FOR THE PERIOD
     465,899,359
     334,573,560
     8,410,442
     6,144,007
     124,457,334
     110,484,381
     138,557,587
     116,395,746
     40,806,638
     22,776,573
     28,459,148
     (9,030,192)
     806,590,508
     581,344,075
    F - 122


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Table of Contents


b)Distribution  Line of Business
     DistributionCountry
     Chile
     Argentina
     Brazil
     Colombia
     Peru
     Eliminations
     TotalASSETS
     12-31-2009
     12-31-2008
     12-31-2009
     12-31-2008
     12-31-2009
     12-31-2008
     12-31-2009
     12-31-2008
     12-31-2009
     12-31-2008
     12-31-2009
     12-31-2008
     12-31-2009
     12-31-2008ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$CURRENT ASSETS
     201,194,118
     219,766,678
     93,131,605
     118,705,660
     533,785,021
     543,120,169
     333,863,028
     365,926,908
     54,915,535
     63,211,138
     (490,075)
     -
     1,216,399,232
     1,310,730,553Current Operating Assets
     201,194,118
     219,766,678
     93,131,605
     118,705,660
     533,785,021
     543,120,169
     333,863,028
     365,926,908
     54,915,535
     63,211,138
     (490,075)
     -
     1,216,399,232
     1,310,730,553Cash and Cash Equivalents
     17,933,851
     19,556,717
     28,163,140
     26,108,274
     145,450,780
     158,137,016
     232,157,724
     101,980,816
     7,898,726
     6,970,126
     -
     -
     431,604,221
     312,752,949Trade and Other Receivables, Net
     169,492,117
     188,842,588
     55,933,943
     77,078,464
     358,989,786
     337,650,124
     93,045,071
     187,933,865
     41,842,319
     47,682,829
     20,488
     -
     719,323,724
     839,187,870Receivables from Related Entities
     1,726,640
     5,535,522
     208,445
     129,108
     465,212
     120,580
     1,874,539
     65,051,032
     307,839
     386,375
     (510,563)
     -
     4,072,112
     71,222,617Inventories
     1,370,198
     1,803,361
     3,492,452
     2,757,397
     1,489,962
     1,217,675
     5,826,183
     10,961,195
     3,938,751
     6,375,851
     -
     -
     16,117,546
     23,115,479Prepayments
     359,501
     426,231
     480,010
     361,976
     233,571
     290,858
     380,610
     -
     590,769
     1,492,820
     -
     -
     2,044,461
     2,571,885Current Tax Receivables
     7,162,684
     884,955
     567,685
     8,972,968
     15,096,796
     34,161,404
     -
     -
     -
     4,978
     -
     -
     22,827,165
     44,024,305Other Assets
     3,149,127
     2,717,304
     4,285,930
     3,297,473
     12,058,914
     11,542,512
     578,901
     -
     337,131
     298,159
     -
     -
     20,410,003
     17,855,448Non-Current Assets and Disposal Groups Held for Sale
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -NON-CURRENT ASSETS
     1,194,415,123
     1,190,953,135
     320,067,184
     402,342,199
     1,879,491,174
     1,851,725,777
     882,909,627
     1,004,916,959
     363,706,049
     500,030,065
     -
     -
     4,640,589,157
     4,949,968,135Available-for-Sale Financial Assets
     24,920
     8,532,637
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     24,920
     8,532,637Other Financial Assets
     -
     -
     -
     -
     -
     5,489
     874
     -
     -
     -
     -
     -
     874
     5,489Trade and Other Receivables, Net
     9,640,749
     990,665
     7,846,841
     13,872,693
     82,241,816
     61,881,952
     5,864,754
     65,767,456
     315,381
     500,647
     -
     -
     105,909,541
     143,013,413Receivables from Related Entities
     -
     -
     -
     -
     210,855
     203,403
     -
     -
     -
     -
     -
     -
     210,855
     203,403Equity Method Accounted Investments in Associates
     578,500,084
     575,788,162
     33,228
     43,868
     105,045,877
     285,505,822
     -
     3,971
     -
     97,461,529
     -
     -
     683,579,189
     958,803,352Intangible Assets, Net
     18,344,876
     19,414,206
     2,903,815
     3,699,815
     1,478,505,643
     1,296,509,624
     24,523,960
     17,927,398
     2,924,376
     3,574,863
     -
     -
     1,527,202,670
     1,341,125,906Property, Plant and Equipment, Net
     544,647,596
     510,705,597
     294,838,019
     366,019,206
     14,398,121
     14,535,950
     783,737,988
     843,879,583
     358,818,875
     396,004,790
     -
     -
     1,996,440,599
     2,131,145,126Deferred Tax Assets
     42,765,099
     75,151,932
     13,658,742
     17,417,128
     140,076,605
     156,341,570
     68,750,651
     77,338,551
     -
     -
     -
     -
     265,251,097
     326,249,181Hedging Assets
     -
     -
     -
     -
     -
     -
     -
     -
     1,647,417
     2,488,236
     -
     -
     1,647,417
     2,488,236Other Assets
     491,799
     369,936
     786,539
     1,289,489
     59,012,257
     36,741,967
     31,400
     -
     -
     -
     -
     -
     60,321,995
     38,401,392TOTAL ASSETS
     1,395,609,241
     1,410,719,813
     413,198,789
     521,047,859
     2,413,276,195
     2,394,845,946
     1,216,772,655
     1,370,843,867
     418,621,584
     563,241,203
     (490,075)
     -
     5,856,988,389
     6,260,698,688
    F - 123


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Table of Contents


Line of Business
     DistributionCountry
     Chile
     Argentina
     Brazil
     Colombia
     Peru
     Eliminations
     TotalEQUITY AND LIABILITIES
     12-31-2009
     12-31-2008
     12-31-2009
     12-31-2008
     12-31-2009
     12-31-2008
     12-31-2009
     12-31-2008
     12-31-2009
     12-31-2008
     12-31-2009
     12-31-2008
     12-31-2009
     12-31-2008ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$CURRENT LIABILITIES
     147,471,992
     194,443,250
     170,584,075
     203,620,529
     456,935,441
     506,015,248
     235,651,234
     220,066,134
     61,137,029
     81,216,133
     (490,075)
     -
     1,071,289,696
     1,205,361,294Interest-Bearing Borrowings
     115,477
     12,434,340
     10,583,980
     15,664,633
     134,585,061
     192,713,318
     84,153,139
     78,206,574
     17,638,868
     32,963,650
     -
     -
     247,076,525
     331,982,515Trade and Other Payables
     64,754,414
     58,836,239
     115,839,550
     114,298,478
     199,559,790
     191,510,772
     90,054,931
     91,254,365
     17,175,620
     19,038,592
     -
     -
     487,384,305
     474,938,446Payables to Related Entities
     59,694,812
     82,207,373
     2,451,028
     224,045
     104,779,978
     97,986,846
     34,562,690
     28,056,451
     11,448,425
     11,220,651
     (490,075)
     -
     212,446,858
     219,695,366Provisions
     7,260,776
     12,873,962
     21,138,602
     31,001,479
     6,106,634
     210,382
     3,463,182
     -
     8,672,619
     10,013,897
     -
     -
     46,641,813
     54,099,720Current Tax Payables
     11,275,178
     19,005,815
     6,040,230
     26,756,151
     7,005,679
     18,608,672
     20,455,585
     22,548,744
     4,329,031
     7,327,079
     -
     -
     49,105,703
     94,246,461Other Liabilities
     835,517
     1,224,548
     14,410,983
     15,558,658
     2,034,868
     4,014,597
     2,961,707
     -
     97,178
     344,174
     -
     -
     20,340,253
     21,141,977Deferred Income
     2,296,396
     6,566,781
     -
     -
     -
     -
     -
     -
     1,745,118
     308,090
     -
     -
     4,041,514
     6,874,871Post-Employment Benefit Obligation
     1,239,422
     1,294,192
     119,702
     117,085
     -
     -
     -
     -
     -
     -
     -
     -
     1,359,124
     1,411,277Hedging Liabilities
     -
     -
     -
     -
     2,863,431
     970,661
     -
     -
     30,170
     -
     -
     -
     2,893,601
     970,661Accrued Liabilities, Total
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Liabilities Included in Disposal Groups Classified as Held for Sale
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -NON-CURRENT LIABILITIES
     219,826,811
     360,995,723
     54,242,098
     66,097,942
     923,842,504
     782,600,648
     393,163,308
     496,986,662
     213,746,029
     222,174,557
     -
     -
     1,804,820,750
     1,928,855,532Interest-Bearing Borrowings
     -
     -
     32,705,156
     38,805,017
     567,578,870
     466,421,255
     276,335,677
     387,772,989
     149,770,579
     144,262,741
     -
     -
     1,026,390,282
     1,037,262,002Trade and Other Payables
     450
     543
     478,409
     261,179
     33,236,714
     18,439,116
     721,362
     -
     -
     -
     -
     -
     34,436,935
     18,700,838Payables to Related Entities
     170,085,874
     320,464,689
     -
     -
     11,767,969
     29,361,330
     -
     -
     -
     -
     -
     -
     181,853,843
     349,826,019Provisions
     6,815,239
     125,649
     7,703,251
     8,138,192
     174,996,080
     146,357,804
     2,295,015
     1,335,825
     184,352
     191,543
     -
     -
     191,993,937
     156,149,013Deferred Tax Liabilities
     24,179,982
     21,385,458
     11,424,565
     16,574,057
     62,496,895
     59,705,639
     51,497,425
     45,473,642
     63,570,261
     77,281,447
     -
     -
     213,169,128
     220,420,243Other Liabilities
     285,207
     523,390
     14,813
     84,232
     -
     -
     -
     -
     -
     -
     -
     -
     300,020
     607,622Deferred Income
     3,167,909
     3,747,373
     -
     -
     -
     -
     -
     -
     220,837
     438,826
     -
     -
     3,388,746
     4,186,199Post-Employment Benefit Obligation
     15,292,150
     14,748,621
     1,915,904
     1,756,268
     68,787,007
     59,628,578
     62,313,829
     62,404,206
     -
     -
     -
     -
     148,308,890
     138,537,673Hedging Liabilities
     -
     -
     -
     478,997
     4,978,969
     2,686,926
     -
     -
     -
     -
     -
     -
     4,978,969
     3,165,923EQUITY
     1,028,310,438
     855,280,840
     188,372,616
     251,329,388
     1,032,498,250
     1,106,230,050
     587,958,113
     653,791,071
     143,738,526
     259,850,513
     -
     -
     2,980,877,943
     3,126,481,862Equity Attributable to Equity Holders of Parent
     1,028,310,438
     855,280,840
     188,372,616
     251,329,388
     1,032,498,250
     1,106,230,050
     587,958,113
     653,791,071
     143,738,526
     259,850,513
     -
     -
     2,980,877,943
     3,126,481,862Issued Capital
     368,494,984
     368,494,984
     135,477,598
     158,251,380
     581,523,764
     685,198,131
     3,934,010
     4,525,464
     32,841,625
     157,896,367
     -
     -
     1,122,271,981
     1,374,366,326Other Reserves
     (293,712,384)
     (341,989,337)
     18,005,827
     52,941,827
     279,105,126
     183,628,371
     457,782,320
     535,093,147
     86,544,545
     45,676,705
     -
     -
     547,725,434
     475,350,713Retained Earnings
     953,527,838
     828,775,193
     34,889,191
     40,136,181
     171,869,360
     237,403,548
     126,241,783
     114,172,460
     24,352,356
     56,277,441
     -
     -
     1,310,880,528
     1,276,764,823Minority Interest
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Equity and Liabilities, Total
     1,395,609,241
     1,410,719,813
     413,198,789
     521,047,859
     2,413,276,195
     2,394,845,946
     1,216,772,655
     1,370,843,867
     418,621,584
     563,241,203
     (490,075)
     -
     5,856,988,389
     6,260,698,688
    F - 124


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Table of Contents


Line of Business
     DistributionCountry
     Chile
     Argentina
     Brazil
     Colombia
     Peru
     Eliminations
     TotalSTATEMENT OF COMPREHENSIVE INCOME
For the years ended December 31, 2009 and 2008
     2009
     2008
     2009
     2008
     2009
     2008
     2009
     2008
     2009
     2008
     2009
     2008
     2009
     2008ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$
     ThCh$REVENUE
     1,084,346,433
     1,078,280,225
     324,517,652
     333,266,419
     1,767,753,911
     1,724,688,412
     740,359,778
     661,153,967
     301,472,173
     253,652,018
     -
     -
     4,218,449,947
     4,051,041,041Sales
     1,061,070,988
     1,023,838,502
     315,723,562
     325,288,368
     1,524,208,987
     1,404,843,318
     684,122,654
     608,301,437
     285,214,506
     242,418,181
     -
     -
     3,870,340,697
     3,604,689,806Energy Sales
     1,002,381,935
     952,015,415
     297,441,695
     304,372,978
     1,461,324,201
     1,353,743,812
     584,857,696
     495,084,296
     277,441,870
     235,114,594
     -
     -
     3,623,447,397
     3,340,331,095Other Sales
     10,418,293
     14,144,725
     (2,569,897)
     (897,014)
     -
     -
     1,999,965
     1,561,021
     13,193
     12,629
     -
     -
     9,861,554
     14,821,361Other Services Rendered
     48,270,760
     57,678,362
     20,851,764
     21,812,404
     62,884,786
     51,099,506
     97,264,993
     111,656,120
     7,759,443
     7,290,958
     -
     -
     237,031,746
     249,537,350Other Operating Income
     23,275,445
     54,441,723
     8,794,090
     7,978,051
     243,544,924
     319,845,094
     56,237,124
     52,852,530
     16,257,667
     11,233,837
     -
     -
     348,109,250
     446,351,235SUPPLIES AND SERVICES
     (840,654,271)
     (762,600,524)
     (153,916,681)
     (159,168,886)
     (1,109,711,167)
     (1,130,171,924)
     (393,206,055)
     (334,348,884)
     (185,706,532)
     (149,816,090)
     -
     -
     (2,683,194,706)
     (2,536,106,308)Energy Purchases
     (815,863,794)
     (733,339,877)
     (150,780,462)
     (155,199,248)
     (584,077,376)
     (581,737,614)
     (275,176,733)
     (216,843,446)
     (171,745,296)
     (139,863,463)
     -
     -
     (1,997,643,661)
     (1,826,983,648)Fuel Consumption
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -Transport Costs
     -
     -
     (1,522,314)
     (1,251,828)
     (38,690,525)
     (37,664,618)
     (79,476,600)
     (82,316,166)
     -
     -
     -
     -
     (119,689,439)
     (121,232,612)Other Variable Supplies and Services
     (24,790,477)
     (29,260,647)
     (1,613,905)
     (2,717,810)
     (486,943,266)
     (510,769,692)
     (38,552,722)
     (35,189,272)
     (13,961,236)
     (9,952,627)
     -
     -
     (565,861,606)
     (587,890,048)CONTRIBUTION MARGIN
     243,692,162
     315,679,701
     170,600,971
     174,097,533
     658,042,744
     594,516,488
     347,153,723
     326,805,083
     115,765,641
     103,835,928
     -
     -
     1,535,255,241
     1,514,934,733Work on Property, Plant and Equipment
     2,666,652
     2,786,572
     8,057,055
     9,659,647
     17,007,228
     13,988,133
     2,485,358
     3,072,770
     2,782,325
     2,592,123
     -
     -
     32,998,618
     32,099,245Employee Expenses
     (24,641,080)
     (22,379,909)
     (66,048,079)
     (57,132,352)
     (84,491,569)
     (79,763,096)
     (29,972,265)
     (18,866,451)
     (11,469,891)
     (9,776,179)
     -
     -
     (216,622,884)
     (187,917,987)Other Operating Fixed Costs
     (69,569,401)
     (63,333,299)
     (64,218,481)
     (63,964,619)
     (153,761,807)
     (138,155,164)
     (60,815,070)
     (54,306,942)
     (24,143,832)
     (23,905,746)
     -
     -
     (372,508,591)
     (343,665,770)GROSS OPERATING RESULT
     152,148,333
     232,753,065
     48,391,466
     62,660,209
     436,796,596
     390,586,361
     258,851,746
     256,704,460
     82,934,243
     72,746,126
     -
     -
     979,122,384
     1,015,450,221Amortization
     (23,116,301)
     (19,130,093)
     (16,515,805)
     (17,033,199)
     (98,596,573)
     (82,177,997)
     (58,967,240)
     (53,724,685)
     (20,509,380)
     (19,802,090)
     -
     -
     (217,705,299)
     (191,868,064)OPERATING RESULTS
     129,032,032
     213,622,972
     31,875,661
     45,627,010
     338,200,023
     308,408,364
     199,884,506
     202,979,775
     62,424,863
     52,944,036
     -
     -
     761,417,085
     823,582,157FINANCIAL RESULTS
     2,906,811
     (24,720,995)
     (5,626,845)
     (2,207,707)
     (57,393,403)
     (82,562,607)
     (29,268,297)
     (37,367,598)
     (10,414,860)
     (12,219,957)
     -
     -
     (99,796,594)
     (159,078,864)Finance Income
     14,891,938
     15,332,306
     6,866,221
     9,850,439
     83,232,583
     91,971,784
     9,885,040
     7,413,288
     2,245,332
     2,069,892
     -
     (1,528,000)
     117,121,114
     125,109,709Finance Expense
     (17,384,760)
     (23,194,285)
     (12,048,619)
     (11,419,883)
     (145,101,661)
     (157,038,747)
     (39,051,936)
     (44,767,844)
     (12,867,928)
     (14,461,673)
     -
     1,528,000
     (226,454,904)
     (249,354,432)Results from Indexed Units of Accounts
     458,162
     (3,048,824)
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     458,162
     (3,048,824)Exchange Differences
     4,941,471
     (13,810,192)
     (444,447)
     (638,263)
     4,475,675
     (17,495,644)
     (101,401)
     (13,042)
     207,736
     171,824
     -
     -
     9,079,034
     (31,785,317)Positive
     8,283,203
     54,746
     1,287,472
     4,141,772
     6,419,927
     45,866,420
     1,561,581
     1,707,677
     1,032,549
     2,087,857
     -
     -
     18,584,732
     53,858,472Negative
     (3,341,732)
     (13,864,938)
     (1,731,919)
     (4,780,035)
     (1,944,252)
     (63,362,064)
     (1,662,982)
     (1,720,719)
     (824,813)
     (1,916,033)
     -
     -
     (9,505,698)
     (85,643,789)Results of Companies Not Equity-Accounted
     82,756,621
     74,874,562
     1,633
     1,136
     -
     -
     -
     -
     -
     -
     -
     -
     82,758,254
     74,875,698Results from Other Investments
     82,850
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     82,850
     -Results from the Sale of Assets
     12,050,737
     (303,324)
     -
     -
     250,284
     285,472
     12,755,736
     (102,143)
     (117,804)
     2,999,805
     -
     -
     24,938,953
     2,879,810RESULTS BEFORE TAX
     226,829,051
     263,473,215
     26,250,449
     43,420,439
     281,056,904
     226,131,229
     183,371,945
     165,510,034
     51,892,199
     43,723,884
     -
     -
     769,400,548
     742,258,801Corporate Tax
     (21,064,399)
     (37,443,250)
     (9,357,145)
     (15,723,362)
     (72,619,778)
     (50,427,526)
     (56,364,261)
     (49,651,639)
     (18,796,395)
     (16,154,121)
     -
     -
     (178,201,978)
     (169,399,898)RESULTS AFTER TAX FROM CONTINUING OPERATIONS
     205,764,652
     226,029,965
     16,893,304
     27,697,077
     208,437,126
     175,703,703
     127,007,684
     115,858,395
     33,095,804
     27,569,763
     -
     -
     591,198,570
     572,858,903Profit (Loss) from Discontinued Operations, Net of Tax
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -
     -RESULTS AFTER TAX FROM DISCONTINUED OPERATIONS
     205,764,652
     226,029,965
     16,893,304
     27,697,077
     208,437,126
     175,703,703
     127,007,684
     115,858,395
     33,095,804
     27,569,763
     -
     -
     591,198,570
     572,858,903RESULT FOR THE PERIOD
     205,764,652
     226,029,965
     16,893,304
     27,697,077
     208,437,126
     175,703,703
     127,007,684
     115,858,395
     33,095,804
     27,569,763
     -
     -
     591,198,570
     572,858,903
    F - 125


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36.GUARANTEE COMMITMENTS TO THIRD PARTY, OTHER CONTINGENT ASSETS AND LIABILITIES AND OTHER COMMITMENTS  36.1Direct guarantees  Creditor
of
Guarantee
     Debtor
     Type
of
Guarantee
     Assets Committed
     Balance Pending
     Guarantees ReleasedType
     Currency
     Accounting
Value
     at December 31,Name
     Relation
     Currency
     2009
     2008
     
     2010
     Assets
     2011
     Assets
     2012
     AssetsCreditor Banks
     Pangue S.A.
     Creditor
     Mortgage and
Pledge
     Real Estate and Equipment
     ThCh$
     86,239,360
     ThCh$
     370,984
     1,586,880
     
     -
     -
     -
     -
     -
     -Soc. de Energía de la República Argentina
     Endesa Argentina, Endesa Costanera
     Creditor
     Pledge
     Shares
     ThCh$
     1,617,383
     ThCh$
     2,923,298
     6,289,519
     
     -
     -
     -
     -
     -
     -Mitsubishi
     Endesa Costanera
     Creditor
     Pledge
     Combined Cycle
     ThCh$
     54,056,510
     ThCh$
     72,279,911
     90,716,919
     
     -
     -
     -
     -
     -
     -Credit Suisse First
Boston
     Endesa Costanera
     Creditor
     Pledge
     Combined Cycle
     ThCh$
     15,853,655
     ThCh$
     4,346,571
     13,638,215
     
     -
     -
     -
     -
     -
     -Various Creditors
     Endesa Parent
     Creditor
     Performance Bonds
     
     ThCh$
     -
     ThCh$
     2,728,493
     508,461
     
     -
     -
     -
     -
     -
     -Various Creditors
     Edegel
     Creditor
     Pledge
     Real Estate and Equipment
     ThCh$
     105,294,764
     ThCh$
     574,239
     57,563,928
     
     -
     -
     -
     -
     -
     -Banco Santander (Underwriter)
     G.N.L. Quintero
     Investee
     Pledge
     Shares
     ThCh$
     10,127,465
     ThCh$
     93,151,966
     94,205,737
     
     -
     -
     -
     -
     -
     -Deutsche Bank (*) / Santander Benelux
     Edelnor S.A.
     Creditor
     Deposit Account
     Deposit Account
     ThCh$
     24,221,077
     ThCh$
     108,091,723
     -
     
     -
     -
     -
     -
     -
     -Various Creditors
     Ampla S.A.
     Creditor
     Pledge on Collections and Others
     
     ThCh$
     15,531,499
     ThCh$
     135,611,919
     125,224,605
     
     -
     -
     -
     -
     -
     -Accumulated
Translation
Differences
     Coelce S.A.
     Creditor
     Pledge on Collections and Others
     
     ThCh$
     12,007,971
     ThCh$
     124,589,138
     90,786,197
     
     -
     -
     -
     -
     -
     -International Finance Corporation
     CGT Fortaleza S.A.
     Creditor
     Mortgage and Pledge
     Real Estate and Equipment
     ThCh$
     199,787,847
     ThCh$
     48,053,928
     70,262,773
     
     -
     -
     -
     -
     -
     -Several Creditors
     Sinapsis Brasil
     Creditor
     Mortgage and Pledge
     Real Estate
     ThCh$
     1,540,552
     ThCh$
     337,403
     -
     
     -
     -
     -
     -
     -
     -Several Creditors
     Cam Argentina
     Creditor
     Pledge
     Government Bonds
     ThCh$
     125,212
     ThCh$
     101,367
     -
     
     -
     -
     -
     -
     -
     -
   As of December 31, 2009 and 2008 Enersis and its subsidiaries had commitments for future purchases of energy amounting to ThCh$27,957,381,822 and ThCh$37,345,298,398, respectively.   36.2Indirect guarantees  Creditor
of
Guarantee
     Debtor
     Assets Committed
     Balance Pending
     Guarantees ReleasedType of
Guarantee
     Currency
     Accounting
Value
     at December 31,Name
     Relation
     Currency
     2009
     Dic-08
     2010
     Assets
     2011
     Assets
     2012
     2013Vestas Eólicas S.A.U.
     Endesa Eco S.A.
     Subsidiary
     Guarantee
     ThCh$
     
     ThCh$
     -
     7,923,754
     -
     -
     -
     -
     -
     -Cédulas de Crédito Bancario
     CIEN
     Subsidiary
     Guarantee
     ThCh$
     174,741,558
     ThCh$
     174,741,558
     163,401,797
     -
     -
     -
     -
     -
     -
     F - 126


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36.3Other information  The Ministry of Economy of Chile, from May 19, 2005 to December 31, 2009, established that regulated energy supply for non-contracted distribution companies must be provided by all electricity generating companies on a pro rata basis of their established capacity.  Subsequent regulations stated that electricity generating companies will receive for supplying energy to non-contracted distribution companies the node price effective at that time and that they would be credited or charged the positive or negative differences, respectively, arising in respect to the marginal cost. In addition, it was also stated that such differences may not be more than 20% of the node price, if so, the remaining balances will be incorporated in subsequents node prices calculations, until such differences be fully settled.  The estimated recoverable balance in our subsidiary Endesa Chile totaled Ch$132,000 million as of December 31, 2009. Such remaining balance will be recovered by the distributions companies through increases in the tariff rate that will be applied and billed from future energy consumptions by the regulated customers in the Energy System.   37.PERSONNEL FIGURES  Enersiss personnel, including information regarding subsidiaries and jointly-controlled companies in the five Latin American countries where the Group is present, is distributed as follows as of December 31, 2009 and December 31, 2008:  Country
     12-31-2009
     
     Average
for the PeriodManagers and
     Professionals
     WorkerPrincipal
     and Technicians
     and Other
     TotalExecutivesChile
     120
     2,485
     620
     3,225
     
     3,317Argentina
     33
     2,233
     846
     3,112
     
     3,129Brazil
     50
     2,261
     719
     3,030
     
     3,135Peru
     22
     972
     193
     1,187
     
     1,208Colombia
     29
     1,746
     141
     1,916
     
     1,970Total
     254
     9,697
     2,519
     12,470
     
     12,759Country
     12-31-2008
     
     Average
for the PeriodManagers and
     Professionals
     WorkerPrincipal
     and Technicians
     and Other
     TotalExecutivesChile
     112
     2,503
     676
     3,291
     
     3,117Argentina
     44
     2,440
     758
     3,242
     
     3,233Brazil
     54
     2,771
     476
     3,301
     
     3,320Peru
     26
     925
     335
     1,286
     
     1,240Colombia
     26
     1,596
     115
     1,737
     
     1,717Total
     262
     10,235
     2,360
     12,857
     
     12,627
    F - 127


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38.SUBSEQUENT EVENTS  No other significant events have occurred between December 31, 2009 and date of issuance of these financial statements that could materially affect the presentation of the financial statements.  39.ENVIRONMENT  The detail of environmental expenses as of December 31, 2009 and 2008 is as follows:  Company that Pays
     Project
     12-31-2009
ThCh$
     12-31-2008
ThCh$Endesa Chile S.A.
     Studies, monitoring, lab analysis, removal and final disposal of solid waste in hydroelectric power stations (HPS) and thermoelectric power stations.
     2,416,053
     1,731,018GasAtacama
     Environmental monitoring (air quality, marine monitoring, etc.)
     65,481
     -Hidroaysén
     Educational and Tourism Expenses
     116,820
     -Pehuenche
     Environmental Expenses
     57,394
     -Endesa Costanera S.A.
     Certification of management system, Quality control and fuel quality, Disposal of dangerous waste, Environmental impact study, Environmental leaflets, Hose inspection and tests, Maintenance ISO14001/9001, Liquid waste monitoring, Drilling to monitor water tables and other.
     -
     294,067Hidroeléctrica el Chocón S.A.
     ISO 14.001 Audit, environmental monitoring and environmental standards update.
     -
     7,674Edegel S.A.
     Environmental monitoring, waste management, mitigations and restorations.
     667,059
     444,455Codensa
     Environmental management of PCB transformers.
     53,926
     42,121Coelce
     Environmental monitoring, waste management, ISO 14001 Audit.
     212,166
     231,158Ampla Energia
     Environmental license and environmental management equipment
     8,688
     19,339Edesur S.A.
     Final disposal of residues and contaminating elements.
     151,563
     12,917CIEN
     Environmental compensation, facility improvement and environmental control, setting up the landscaping project.
     11,491
     34,012CDSA
     Repopulation of deposits
     50,449
     -CGTF
     Purchase of environmental monitoring equipment.
     25,505
     1,108Compañía de Transmisión del Mercosur S.A.
     ISO 14.001 Audit, Resolution ENRE 57/2003 (Public Safety), environmental monitoring and environmental standards update.
     10,837
     7,074Transportadora de Energía S.A.
     ISO 14.001 Audit, Resolution ENRE 57/2003 (Public Safety), environmental monitoring and environmental standards update.
     11,579
     5,997Total
     
     3,859,011
     2,830,940
     F - 128


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40.ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS  Prior to 2008, the Group issued its consolidated financial statements in accordance with Generally Accepted Accounting Principles in Chile (hereinafter Chilean GAAP). Beginning in 2009, the Group issues its consolidated financial statements in accordance with International Financial Reporting Standards (hereinafter IFRS).  The figures included in these consolidated financial statements for the 2008 period have been reconciled in order to present them using the same principles and criteria applied in 2009.  In order to determine the IFRS adoption balances, the Company decided to apply the exemption provided under paragraph 24 a) of IFRS 1 First-time Adoption, and has therefore decided to follow the footsteps of its parent company ENDESA, S.A. in adopting January 1, 2004 as the date of transition to the aforementioned international standard.  As of that date, the following exemptions allowed under IFRS 1 were principally applied:  -Not reprocessing business combinations occurring before January 1, 2004 (exemption from IFRS 3).  -Considering the amortized cost as of January 1, 2004, including revaluations of assets that took place in the different countries where the Group operates, as the deemed cost of Property, Plant and Equipment and Intangibles (exemption from IAS 16 and IAS 38).  -Translation adjustments generated before January 1, 2004 have been transferred to reserves (exemption from IAS 21).  a)The following is the reconciliation of Net Equity under Chilean GAAP to Net Equity under IFRS as of January 1, 2008:  Equity attributable to the shareholders of the Company
     Equity attributable to minority interest
     TotalThCh$
     ThCh$
     ThCh$Net Equity under Chilean GAAP at 01/01/2008
     2,903,209,631
     
     2,903,209,631Inclusion of Minority Interest
     -
     2,741,767,047
     2,741,767,047
     (1)Elimination of price-level restatement on PP&E, net
     (228,500,211)
     (111,797,285)
     (340,297,496)
     (2)Regulatory Assets  Liabilities
     (50,354,698)
     (47,827,528)
     (98,182,226)
     (3)Goodwill
     625,511,055
     97,643,612
     723,154,667
     (4)Deferred Tax
     (27,564,937)
     (52,652,216)
     (80,217,153)
     (5)Elimination Technical Bulletin No. 64
     (234,236,956)
     (37,041,561)
     (271,278,517)
     (6)Minimum Dividend
     (37,842,392)
     (15,990,472)
     (53,832,864)
     (7)Financial Derivatives
     (53,550,860)
     (202,554)
     (53,753,414)
     (8)Other
     4,460,305
     30,534,106
     34,994,411Total adjustments to IFRS
     (2,078,694)
     (137,333,898)
     (139,412,592)Net Equity under IFRS at 01/01/2008
     2,901,130,937
     2,604,433,149
     5,505,564,086
   F - 129


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b)The following are the reconciliation of Net Equity under Chilean GAAP to Net Equity under IFRS, and the reconciliation of Profit under Chilean GAAP to Profit under IFRS as of December 31, 2008, respectively:  Equity attributable to the shareholders of the Company
     Equity attributable to minority interest
     TotalThCh$
     ThCh$
     ThCh$Net Equity under Chilean GAAP at 12/31/2008
     3,697,212,812
     
     3,697,212,812Incorporation of Minority Interest
     
     3,677,145,791
     3,677,145,791
     (1)Elimination of price-level restatement PP&E, net
     (378,601,774)
     (184,055,636)
     (562,657,410)
     (2)Regulatory Assets  Liabilities
     (52,185,412)
     (47,309,533)
     (99,494,945)
     (3)Goodwill
     628,650,230
     96,874,303
     725,524,533
     (4)Deferred Tax
     (11,223,837)
     (55,053,876)
     (66,277,713)
     (5)Elimination Technical Bulletin No. 64
     (675,777,409)
     (536,436,281)
     (1,212,213,690)
     (6)Minimum Dividend
     (119,138,817)
     (42,751,652)
     (161,890,469)
     (7)Financial Derivatives
     494,921
     (2,451,644)
     (1,956,723)
     (8)Other
     1,884,166
     31,854,868
     33,739,034Total Adjustments to IFRS
     (605,897,932)
     (739,329,451)
     (1,345,227,383)Net Equity under IFRS at 12/31/2008
     3,091,314,880
     2,937,816,340
     6,029,131,220
   Net income attributable to the shareholders of the Company
     Net income attributable to minority interest
     TotalThCh$
     ThCh$
     ThCh$Net Income under Chilean GAAP at 12/31/2008
     570,883,101
     697,031,109
     1,267,914,210Elimination of price-level restatement
     (20,908,122)
     (31,809,263)
     (52,717,385)
     (2)Regulatory Assets  Liabilities
     (4,288,756)
     (1,705,935)
     (5,994,691)
     (3)Goodwill amortization
     61,271,914
     (1,995,844)
     59,276,070
     (4)Deferred Taxes
     (5,698,900)
     (13,494,143)
     (19,193,043)
     (5)Elimination Technical Bulletin No. 64
     (76,989,849)
     (118,927,413)
     (195,917,262)
     (6)Other
     (16,679,755)
     (2,506,111)
     (19,185,866)Total Adjustments to IFRS
     (63,293,468)
     (170,438,709)
     (233,732,177)Net Income under IFRS at 12/31/2008
     507,589,633
     526,592,400
     1,034,182,033
   F - 130


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c)The following is the reconciliation of cash and cash equivalents under Chilean GAAP to cash and cash equivalents under IFRS as of December 31, 2008:   Chilean GAAP
Cash and Cash Equivalent
12/31/2008
     Adjustments
     IFRS
Cash and Cash Equivalent
12/31/2008ThCh$
     ThCh$
     ThCh$Balance at 12/31/2008
     1,301,726,280
     
     1,301,726,280Companies incorporated using Proportionate Consolidation:GasAtacama
     -
     13,365,450
     13,365,450Hidroaysén
     -
     2,771,850
     2,771,850Transquillota
     -
     198,383
     198,383Closing Balance Cash and Cash Equivalents at 12/31/2008
     1,301,726,280
     16,335,683
     1,318,061,963
   Chilean GAAP
Cash Flow
under
12/31/2008
     Adjustments
     IFRS
Cash Flow
under
12/31/2008ThCh$
     ThCh$
     ThCh$Profit (Loss) Attributable to Equity Holders of Parent
     570,883,101
     (63,293,468)
     507,589,633Minority Interest
     697,031,109
     (170,438,709)
     526,592,400Gain (loss) on sale of assets and others
     (5,438,716)
     2,899,755
     (2,538,961)Non-cash adjustments
     455,133,610
     (35,347,110)
     419,786,500(Increase) decrease in current assets
     5,633,330
     (325,663,985)
     (320,030,655)Increase (decrease) in current liabilities
     198,885,559
     553,006,832
     751,892,391Net cash flows provided by operating activities
     1,922,127,993
     (38,836,685)
     1,883,291,308Net cash flows (used in) financing activities
     (346,352,599)
     (127,020,899)
     (473,373,498)Net cash flows (used in) investing activities
     (780,348,600)
     65,230,177
     (715,118,423)Total net positive (negative) cash flows
     795,426,794
     (100,627,408)
     694,799,386Effect of price-level restatement and exchange rates on cash and cash equivalent
     (121,532,317)
     155,917,829
     34,385,512Net Increase (Decrease) in Cash and Cash Equivalents
     673,894,477
     55,290,421
     729,184,898Cash and cash equivalents at beginning of year
     627,831,803
     (38,954,738)
     588,877,065Cash and Cash Equivalents  at end of year
     1,301,726,280
     16,335,683
     1,318,061,963
    Principal adjustments applied:  1.Incorporation of minority interest:  Under Chilean GAAP net equity includes only the equity portion attributable to equity holders of the parent. However, under IFRS net equity includes the equity attributable to equity holders of parent and equity attributable to minority interest. Therefore, the minority interest presented in Enersis consolidated statement of financial position, prepared under Chilean GAAP, has been included in the net equity of the consolidated statement of financial position prepared under IFRS.  2.Price-level restatement:  The price-level restatement recognized under Chilean GAAP has been eliminated, because under IFRS inflation adjustments are only accepted when the functional currency is the currency of a hyperinflationary economy. Neither Chile nor any of the countries in which the Group and its companies are located are considered hyperinflationary economies, in accordance with the requirements set forth in the IAS 29,Financial Reporting in Hyperinflationary Economies.   F - 131


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3.Regulatory Assets-Liabilities, net:  Under Chilean GAAP certain assets and liabilities that are regulatory in nature had been recognized in the statement of financial position. Such assets and liabilities do not meet the conditions set forth in IAS 32 ,Financial Instruments: Presentationand IAS 39,Financial Instruments: Recognition and Measurementto be recognized in the statement of financial position. For this reason, those assets and liabilities has been derecognized in the transition to IFRS.  4.Goodwill:  Goodwill arises in the acquisition of companies and represents the excess of acquisition cost over the interest acquired in the net fair value of the assets and liabilities, including contingent liabilities at acquisition date. Under Chilean GAAP, in the case of the foreign companies, goodwill is measured in dollars; however under IFRSs, goodwill must be recognized and measured in the functional currency of the acquire.  Additionally, under Chilean GAAP goodwill is amortized on a straight line basis over a period of time that considers, among others aspects, the nature of the investment, the expected life of the business, and the return on the investment, and in any case cannot exceed 20 years. Under IFRSs is not amortized, instead must be tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired.   5.Deferred tax:  Under IFRS, the balance sheet liability method is required. Under this method temporary differences between the carrying amount and tax base of an asset or liability represents the existence of a deferred tax that must be recorded in the statement of financial position.  Under Chilean GAAP, the determination of deferred taxes follows a similar procedure to that applied under IFRS. However, certain exemptions set forth in Technical Bulletin No. 60,Accounting for Income Tax and Deferred Taxes, of the Chilean Institute of Accountants, and in supplementary instructions,  differs in certain respects with IFRS that have been adjusted in the process of adoption of IFRS.  The main difference is that under Chilean GAAP as a transitional provision, a contra (referred to as complementary) assets or liabilities were recorded against the deferred tax assets and liabilities recognized on initial application (as of January 1, 2000).  Such complementary assets and liabilities were amortized through profit or loss over the estimated average reversal periods of the underlying temporary differences to which the corresponding deferred tax asset or liability relates, except for certain complementary liabilities arising from the recognition of deferred tax assets related to tax losses, in which case the amortization charge was performed based on the actual use of those losses.  This reconciling adjustment also includes the recognition of the deferred taxes for temporary differences arising from the process of transition to IFRS carried out by the Group.   6.Technical bulletin No. 64:  Under IFRS, the financial statements are prepared considering the functional currency of each entity. Under Chilean GAAP, in the case of our foreign companies, and pursuant to Technical Bulletin No. 64 issued by the Chilean Institute of Accountants, non-monetary assets and liabilities were controlled in historical US dollars.    F - 132


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7.Minimum dividend:  As required by Article No 79 of the Chilean Companies Act, unless otherwise decided by the unanimous vote of the holders of issued and subscribed shares, the Company must distribute a cash dividend in an amount equal to at least 30% of its net income for each year as determined in accordance with Chilean GAAP, unless and except to the extent the Company has unabsorbed prior year losses or interim dividends have been paid to shareholders.  Enersiss stockholders composition is so widespread that reaching an unanimous decision is virtually impossible. Therefore, under IFRS, the dividend payable to the shareholders must be recorded on an accrual basis, net of any interim dividend paid during the year. Under Chilean GAAP, this obligation is only recorded after approval in the Shareholders Meeting.   8.Derivative instruments:  Under IFRS gains or losses of changes in the fair value of financial instruments designated as hedging instruments in a cash flow hedge must be recorded, net of any ineffectiveness, in other comprehensive income as a reserve included in net equity. Under Chilean GAAP such changes are recorded as an unrecognized loss (asset) or an unrecognized gain (liability) in the statement of financial position.     F - 133


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41.FINANCIAL STATEMENTS OF PRINCIPAL SUBSIDIARIES  The following table sets forth the condensed consolidated financial statements of the Group, detailed by each subsidiary as of December 31, 2009 and 2008:  12-31-2009Type of Financial Statements
     Current Assets
ThCh$
     Non Current Assets
ThCh$
     Total
Assets
ThCh$
     Current Liabilities
ThCh$
     Non-Current Liabilities
ThCh$
     Total Liabilities
ThCh$
     Revenue
ThCh$
     Costs
ThCh$
     Profit (Loss)
ThCh$Chilectra S.A.
     Consolidated
     201,194,118
     1,194,415,123
     1,395,609,241
     147,471,992
     219,826,811
     367,298,803
     1,061,070,988
     (855,306,336)
     205,764,652Synapsis Soluc. y Serv. It Ltda.
     Consolidated
     28,912,134
     16,922,968
     45,835,102
     17,358,762
     3,154,269
     20,513,031
     74,219,655
     (68,902,742)
     5,316,913Inmobiliaria Manso de Velasco Ltda.
     Consolidated
     29,801,117
     35,598,877
     65,399,994
     3,722,228
     1,924,456
     5,646,684
     9,871,348
     (2,731,187)
     7,140,161Compañía Americana de Multiservicios de Chile Ltda.
     Consolidated
     80,290,795
     26,207,497
     106,498,292
     45,563,544
     8,592,112
     54,155,656
     136,535,810
     (137,832,037)
     (1,296,227)Distrilima S.A.
     Consolidated
     54,918,692
     363,706,049
     418,624,741
     61,140,186
     213,746,029
     274,886,215
     285,214,506
     (252,118,702)
     33,095,804Empresa de Distribución Eléctrica de Lima Norte S.A.A.
     Separate
     54,913,605
     363,706,049
     418,619,654
     61,137,905
     213,746,029
     274,883,934
     285,214,506
     (252,452,604)
     32,761,902Empresa Eléctrica de Cundinamarca S.A.
     Consolidated
     942,361,242
     5,226,991,370
     6,169,352,612
     981,101,681
     2,233,249,079
     3,214,350,760
     2,408,239,446
     (1,636,139,092)
     772,100,354Endesa Eco S.A.
     Separate
     20,342,545
     141,348,885
     161,691,430
     151,709,864
     19,897,730
     171,607,594
     5,363,817
     (13,478,980)
     (8,115,163)Empresa Eléctrica Pehuenche S.A.
     Separate
     66,918,651
     250,679,247
     317,597,898
     93,120,578
     41,741,967
     134,862,545
     199,025,325
     (44,152,639)
     154,872,686Compañía Eléctrica San Isidro S.A.
     Separate
     53,986,693
     85,953,344
     139,940,037
     34,584,533
     16,770,373
     51,354,906
     119,444,441
     (107,229,856)
     12,214,585Empresa Eléctrica Pangue S.A.
     Separate
     64,692,377
     139,047,187
     203,739,564
     77,357,564
     14,588,592
     91,946,156
     102,435,170
     (27,600,506)
     74,834,664Compañía Eléctrica Tarapacá S.A.
     Separate
     18,895,799
     79,166,484
     98,062,283
     4,768,430
     6,362,133
     11,130,563
     59,026,738
     (52,369,255)
     6,657,483Inversiones Endesa Norte S.A.
     Separate
     -
     25,157,716
     25,157,716
     3,224,334
     -
     3,224,334
     -
     (166,553)
     (166,553)GasAtacama Holding
     Separate
     114,435,229
     316,349,769
     430,784,998
     187,876,998
     42,467,597
     230,344,595
     343,304,368
     (319,083,247)
     24,221,121Sociedad Concesionaria Túnel el Melón S.A.
     Separate
     17,507,583
     18,587,880
     36,095,463
     2,090,726
     15,675,501
     17,766,227
     6,092,068
     (1,160,459)
     4,931,609Endesa Argentina S.A.
     Consolidated
     118,381,851
     236,958,705
     355,340,556
     143,599,544
     122,228,745
     265,828,289
     293,388,675
     (284,129,957)
     9,258,718Endesa Costanera S.A.
     Separate
     46,132,764
     139,465,744
     185,598,508
     108,896,949
     73,587,167
     182,484,116
     228,090,396
     (238,967,631)
     (10,877,235)Hidroeléctrica El Chocón S.A.
     Separate
     59,552,103
     91,442,295
     150,994,398
     35,636,058
     48,641,578
     84,277,636
     65,298,279
     (46,084,169)
     19,214,110Emgesa S.A. E.S.P.
     Separate
     256,813,794
     1,228,326,578
     1,485,140,372
     130,634,275
     424,071,893
     554,706,168
     500,829,922
     (362,272,335)
     138,557,587Generandes Perú S.A.
     Consolidated
     54,343,007
     785,935,394
     840,278,401
     71,313,577
     358,335,279
     429,648,856
     212,448,615
     (171,641,977)
     40,806,638Edegel S.A.A.
     Separate
     50,563,350
     699,489,852
     750,053,202
     55,480,341
     309,812,958
     365,293,299
     197,723,819
     (162,768,423)
     34,955,396Chinango S.A.
     Separate
     3,874,902
     103,736,922
     107,611,824
     16,093,363
     61,224,726
     77,318,089
     15,511,080
     (14,352,555)
     1,158,525Centrales Hidroeléctricas de Aysén S.A.
     Separate
     8,111,503
     86,908,393
     95,019,896
     37,110,402
     -
     37,110,402
     -
     (5,994,071)
     (5,994,071)Endesa Brasil S.A.
     Consolidated
     893,078,804
     2,406,346,709
     3,299,425,513
     577,155,133
     1,141,081,701
     1,718,236,834
     1,711,404,371
     (1,364,089,971)
     347,314,400Central Generadora Termoeléctrica Fortaleza S.A.
     Separate
     87,928,488
     182,920,900
     270,849,388
     25,278,405
     49,516,510
     74,794,915
     134,940,094
     (63,564,728)
     71,375,366Centrais Elétricas Cachoeira Dourada S.A.
     Separate
     91,279,739
     142,472,021
     233,751,760
     11,003,768
     9,298,289
     20,302,057
     88,299,914
     (37,997,130)
     50,302,784Compañía de Interconexión Energética S.A.
     Separate
     127,070,301
     351,003,039
     478,073,340
     144,249,724
     212,036,044
     356,285,768
     91,427,196
     (88,648,012)
     2,779,184Compañía Energética Do Ceará S.A.
     Separate
     191,087,737
     792,573,748
     983,661,485
     168,439,779
     307,791,206
     476,230,985
     640,026,534
     (522,045,742)
     117,980,792Ampla Energia e Serviços S.A.
     Separate
     341,853,282
     981,871,549
     1,323,724,831
     222,039,416
     616,051,298
     838,090,714
     884,182,453
     (785,368,668)
     98,813,785Ampla Investimentos e Serviços S.A.
     Separate
     844,002
     105,045,877
     105,889,879
     66,456,246
     -
     66,456,246
     18,119,070
     (8,357,451)
     9,761,619Compañía Distribuidora y Comercializadora de Energía S.A.
     Consolidated
     333,863,028
     882,909,627
     1,216,772,655
     235,651,234
     393,163,308
     628,814,542
     684,122,654
     (556,287,367)
     127,835,287Empresa Eléctrica de Cundinamarca S.A.
     Separate
     29,937,971
     76,304,505
     106,242,476
     25,954,531
     31,814,970
     57,769,501
     80,777,391
     (76,030,326)
     4,747,065Empresa Distribuidora Sur S.A.
     Separate
     93,131,605
     320,067,184
     413,198,789
     170,584,075
     54,242,098
     224,826,173
     315,723,562
     (298,830,258)
     16,893,304
    F - 134


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12-31-2008Type of Financial Statements
     Current Assets
ThCh$
     Non Current Assets
ThCh$
     Total
Assets
ThCh$
     Current Liabilities
ThCh$
     Non-Current Liabilities
ThCh$
     Total Liabilities
ThCh$
     Revenue
ThCh$
     Costs
ThCh$
     Profit (Loss)
ThCh$Chilectra S.A.
     Consolidated
     219,766,677
     1,190,953,135
     1,410,719,812
     194,443,250
     360,995,723
     555,438,973
     1,023,838,502
     (797,808,537)
     226,029,965Synapsis Soluc. y Serv. It Ltda.
     Consolidated
     28,565,230
     11,418,007
     39,983,237
     13,879,946
     3,275,178
     17,155,124
     69,803,888
     (62,890,097)
     6,913,791Inmobiliaria Manso de Velasco Ltda.
     Consolidated
     12,075,400
     44,452,954
     56,528,354
     2,357,509
     1,675,050
     4,032,559
     3,060,208
     6,986,164
     10,046,372Compañía Americana de Multiservicios de Chile Ltda.
     Consolidated
     95,931,688
     26,081,939
     122,013,627
     46,913,030
     8,234,226
     55,147,256
     166,921,744
     (167,096,034)
     (174,290)Distrilima S.A.
     Separate
     18,341
     97,461,529
     97,479,870
     390,833
     -
     390,833
     16,897,802
     (533,615)
     16,364,187Empresa de Distribución Eléctrica de Lima Norte S.A.A.
     Separate
     63,192,797
     402,568,536
     465,761,333
     80,825,300
     222,174,557
     302,999,857
     242,418,181
     (214,314,803)
     28,103,378Empresa Nacional de Electricidad S.A
     Consolidated
     1,215,852,136
     6,190,796,848
     7,406,648,984
     1,122,101,237
     2,486,135,596
     3,608,236,833
     659,408,065
     (493,623,403)
     165,784,662Endesa Eco S.A.
     Consolidated
     9,160,899
     86,918,567
     96,079,466
     94,894,579
     2,460,069
     97,354,648
     4,678,789
     (5,576,689)
     (897,900)Empresa Eléctrica Pehuenche S.A.
     Separate
     98,565,080
     262,333,664
     360,898,744
     71,944,490
     78,543,839
     150,488,329
     306,489,664
     (96,689,648)
     209,800,016Compañía Eléctrica San Isidro S.A.
     Separate
     39,398,828
     98,193,340
     137,592,168
     33,582,047
     25,707,596
     59,289,643
     182,348,450
     (136,505,591)
     45,842,859Empresa Eléctrica Pangue S.A.
     Separate
     52,174,003
     142,803,816
     194,977,819
     34,601,400
     64,770,503
     99,371,903
     120,046,420
     (65,396,606)
     54,649,814Compañía Eléctrica Tarapacá S.A.
     Separate
     14,856,797
     88,151,582
     103,008,379
     13,395,940
     9,336,786
     22,732,726
     56,011,301
     (54,300,966)
     1,710,335Inversiones Endesa Norte S.A.
     Separate
     -
     39,891,570
     39,891,570
     3,057,780
     -
     3,057,780
     6,593,176
     (310,198)
     6,282,978GasAtacama
     Separate
     140,024,772
     397,241,564
     537,266,336
     83,824,330
     229,153,904
     312,978,234
     553,663,581
     (536,513,603)
     17,149,978Sociedad Concesionaria Túnel el Melón S.A.
     Separate
     11,703,571
     23,846,107
     35,549,678
     203,148
     20,287,451
     20,490,599
     6,007,859
     (5,925,434)
     82,425Endesa Argentina S.A.
     Separate
     3,411,854
     50,160,910
     53,572,764
     58,429
     -
     58,429
     2,686,011
     105,890
     2,791,901Endesa Costanera S.A.
     Separate
     69,796,986
     186,194,725
     255,991,711
     135,670,744
     102,513,617
     238,184,361
     239,937,200
     (241,516,233)
     (1,579,033)Hidroelectrica El Chocón S.A.
     Separate
     38,632,868
     134,523,941
     173,156,809
     34,756,759
     61,851,777
     96,608,536
     44,140,714
     (36,121,439)
     8,019,275Emgesa S.A. E.S.P.
     Separate
     223,262,957
     1,436,478,635
     1,659,741,592
     282,665,428
     342,424,533
     625,089,961
     401,257,389
     (284,861,643)
     116,395,746Generandes Peru S.A.
     Separate
     686,919
     237,901,179
     238,588,098
     20,674
     -
     20,674
     13,518,242
     (1,600,845)
     11,917,397Edegel S.A.A.
     Separate
     74,222,033
     901,056,800
     975,278,833
     121,017,734
     415,637,559
     536,655,293
     205,662,615
     (174,891,194)
     30,771,421Centrales Hidroeléctricas de Aysén S.A.
     Separate
     8,981,534
     61,671,245
     70,652,779
     6,584,072
     165,087
     6,749,159
     -
     (2,860,539)
     (2,860,539)Endesa Brasil S.A.
     Consolidated
     822,934,771
     2,204,486,295
     3,027,421,066
     559,133,942
     1,120,021,761
     1,679,155,703
     392,136,320
     (353,470,071)
     38,666,249Central Generadora Termoeléctrica Fortaleza S.A.
     Separate
     62,426,834
     202,073,534
     264,500,368
     20,214,706
     94,500,696
     114,715,402
     109,682,993
     (86,275,153)
     23,407,840Centrais Elétricas Cachoeira Dourada S.A.
     Separate
     97,290,181
     134,806,467
     232,096,648
     36,286,849
     7,625,416
     43,912,265
     147,104,674
     (59,182,547)
     87,922,127Compañía de Interconexión Energética S.A.
     Separate
     80,095,988
     334,603,458
     414,699,446
     60,389,920
     255,723,786
     316,113,706
     65,628,148
     (66,769,992)
     (1,141,844)Compañía Energética Do Ceará S.A.
     Separate
     179,895,855
     577,865,504
     757,761,359
     212,637,965
     240,923,747
     453,561,712
     577,259,700
     (472,230,163)
     105,029,537Ampla Energia e Serviços S.A.
     Separate
     331,097,439
     871,748,496
     1,202,845,935
     223,252,264
     541,676,901
     764,929,165
     827,583,618
     (739,210,462)
     88,373,156Ampla Investimentos e Serviços S.A.
     Separate
     9,854,356
     113,241,652
     123,096,008
     69,990,430
     -
     69,990,430
     21,695,451
     (17,698,990)
     3,996,461Compañía Distribuidora y Comercializadora de Energía S.A.
     Separate
     365,926,908
     1,004,916,959
     1,370,843,867
     220,066,134
     496,986,662
     717,052,796
     608,301,437
     (492,443,042)
     115,858,395Empresa Distribuidora Sur S.A.
     Separate
     118,705,660
     402,342,199
     521,047,859
     (203,620,529)
     (66,097,942)
     (269,718,471)
     325,288,368
     (297,591,291)
     27,697,077
  The following Appendixes (1, 2 and 3) are part of the notes to the consolidated financial statements.   F - 135


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APPENDIX No. 1 ENERSIS GROUP COMPANIES (in alphabetical order)  This appendix is part of note 2.4 Subsidiaries and jointly-controlled entities.  Company
     % Ownership Interest at 12/31/2009:
     % Ownership Interest at 12/31/2009:
     Relation
     Company Address
     ActivityControl
     Economic
     Control
     EconomicAgrícola e Inmobiliaria Pastos Verdes Ltda.
     55.00%
     55.00%
     55.00%
     55.00%
     Subsidiary
     Santiago de Chile (Chile)
     Financial InvestmentsAguas Santiago Poniente S.A.
     78.88%
     55.00%
     78.88%
     55.00%
     Subsidiary
     Santiago de Chile (Chile)
     Sanitation ServicesAysén Transmisión S.A.
     51.00%
     30.59%
     99.51%
     30.59%
     Joint Control
     Santiago de Chile (Chile)
     Develop Electric Transmission SystemsAmpla Energía E Serviços S.A.
     91.93%
     70.22%
     91.93%
     69.88%
     Subsidiary
     Río de Janeiro (Brazil)
     Electric Energy Production, Transportation and DistributionAmpla Investimentos e Serviços S.A.
     91.93%
     70.22%
     91.93%
     69.88%
     Subsidiary
     Río de Janeiro (Brazil)
     Electric Energy Production, Transportation, Distribution and CommerceAtacama Finance Co
     50.00%
     29.99%
     50.00%
     29.99%
     Joint Control
     Grand Cayman (Cayman Islands)
     Portfolio CompanyCam Brasil Multiservicios Ltda.
     100.00%
     100.00%
     100.00%
     100.00%
     Subsidiary
     Río de Janeiro (Brazil)
     Purchase and Sale o Electric ProductsCentrais Elétricas Cachoeira Dourada S.A.
     99.61%
     54.09%
     99.61%
     53.36%
     Subsidiary
     Goiania (Brasil)
     Electric Energy Generation and MarketingCentral Eólica Canela S.A.
     75.00%
     44.99%
     75.00%
     44.99%
     Subsidiary
     Santiago de Chile (Chile)
     Promotion and Development of Renewable Energy ProjectsCentral Geradora Termeléctrica Fortaleza S.A
     100.00%
     54.30%
     100.00%
     53.57%
     Subsidiary
     Ceará (Brasil)
     Development of a Thermoelectric ProjectCentrales Hidroeléctricas de Aysén S.A.
     51.00%
     30.59%
     51.00%
     30.59%
     Joint Control
     Santiago de Chile (Chile)
     Development and Running of a Hydroelectric ProjectChilectra Inversud S.A.
     100.00%
     99.09%
     100.00%
     99.09%
     Subsidiary
     Santiago de Chile (Chile)
     Portfolio CompanyChilectra S.A.
     99.09%
     99.09%
     99.09%
     99.09%
     Subsidiary
     Santiago de Chile (Chile)
     Participate in Companies of any NatureChinango S.A.C.
     80.00%
     29.97%
     -
     -
     Subsidiary
     Lima (Perú)
     Electric Energy Generation, Marketing and DistributionCompañía Americana de Multiservicios de Argentina Ltda.
     100.00%
     100.00%
     100.00%
     100.00%
     Subsidiary
     Buenos Aires (Argentina)
     Electric Network Meters, Postal, Energy Meter CalibrationCompañía Americana de Multiservicios de Chile Ltda.
     100.00%
     100.00%
     100.00%
     100.00%
     Subsidiary
     Santiago de Chile (Chile)
     Purchase and Sale o Electric ProductsCompañía Americana de Multiservicios de Colombia Ltda.
     100.00%
     100.00%
     100.00%
     100.00%
     Subsidiary
     Bogotá (Colombia)
     Calibration and Measurement Technical ServicesCompañía Americana de Multiservicios Del Perú Ltda.
     100.00%
     100.00%
     100.00%
     100.00%
     Subsidiary
     Lima (Perú)
     Purchase, Sale and Distribution o Electric ProductsCompañía de Interconexión Energética S.A.
     100.00%
     54.30%
     100.00%
     53.57%
     Subsidiary
     Río de Janeiro (Brasil)
     Electric Energy Production, Transportation and DistributionCompañía de Transmisión del Mercosur S.A.
     99.99%
     54.30%
     100.00%
     53.56%
     Subsidiary
     Buenos Aires (Argentina)
     Electric Energy Production, Transportation and DistributionCompañía Distribuidora y Comercializadora de energía S.A.
     21.82%
     21.73%
     21.82%
     21.73%
     Subsidiary
     Bogotá (Colombia)
     Electric Energy Distribution and MarketingCompañía Eléctrica San Isidro S.A.
     100.00%
     59.98%
     100.00%
     59.98%
     Subsidiary
     Santiago de Chile (Chile)
     Complete Electric Energy CycleCompañía Eléctrica Tarapacá S.A.
     100.00%
     59.98%
     100.00%
     59.98%
     Subsidiary
     Santiago de Chile (Chile)
     Complete Electric Energy CycleCompañía Energética Do Ceará S.A.
     58.87%
     35.25%
     58.87%
     34.90%
     Subsidiary
     Ceará (Brazil)
     Complete Electric Energy CycleCompañía Peruana de Electricidad S.A.
     51.00%
     50.54%
     51.00%
     50.54%
     Subsidiary
     Lima (Peru)
     Portfolio CompanyConsorcio Ara- Ingendesa Ltda.
     50.00%
     29.99%
     50.00%
     29.99%
     Joint Control
     Santiago de Chile (Chile)
     Project Engineering ConsultingConsorcio Ingendesa Minimetal Ltda.
     50.00%
     29.99%
     50.00%
     29.99%
     Joint Control
     Santiago de Chile (Chile)
     Engineering ServicesConstrucciones y Proyectos Los Maitenes S.A.
     55.00%
     55.00%
     55.00%
     55.00%
     Subsidiary
     Santiago de Chile (Chile)
     Construction and FacilitiesDistribuidora Eléctrica de Cundinamarca S.A.
     49.00%
     10.65%
     -
     -
     Joint Control
     Bogotá (Colombia)
     Electric Energy Distribution and MarketingDistrilec Inversora S.A.
     51.49%
     50.93%
     51.49%
     50.93%
     Subsidiary
     Buenos Aires (Argentina)
     Portfolio CompanyEdegel S.A.A
     83.60%
     37.46%
     54.20%
     19.83%
     Subsidiary
     Lima (Peru)
     Electric Energy Generation, Marketing and DistributionEmgesa S.A. E.S.P.
     26.87%
     16.12%
     26.87%
     16.12%
     Subsidiary
     Bogotá (Colombia)
     Electric Energy Generation.Empresa de Distribución Eléctrica de Lima Norte S.A.A
     75.68%
     57.54%
     60.00%
     33.54%
     Subsidiary
     Lima (Peru)
     Electric Energy Distribution and MarketingEmpresa de Energía de Cundinamarca S.A.
     82.34%
     8.77%
     -
     -
     Joint Control
     Bogotá (Colombia)
     Electric Energy Distribution and MarketingEmpresa de Ingeniería Ingendesa S.A.
     100.00%
     59.98%
     100.00%
     59.98%
     Subsidiary
     Santiago de Chile (Chile)
     Engineering ServicesEmpresa Distribuidora Sur S.A.
     65.90%
     65.39%
     65.90%
     65.39%
     Subsidiary
     Buenos Aires (Argentina)
     Electric Energy Distribution and MarketingEmpresa Eléctrica de Colina Ltda.
     100.00%
     99.09%
     100.00%
     99.09%
     Subsidiary
     Santiago de Chile (Chile)
     Complete Energy Cycle and Related SuppliesEmpresa Eléctrica Pangue S.A.
     94.99%
     56.97%
     94.99%
     56.97%
     Subsidiary
     Santiago de Chile (Chile)
     Complete Electric Energy CycleEmpresa Eléctrica Pehuenche S.A.
     92.65%
     55.57%
     92.65%
     55.57%
     Subsidiary
     Santiago de Chile (Chile)
     Complete Electric Energy CycleEmpresa Nacional de Electricidad S.A
     59.98%
     59.98%
     59.98%
     59.98%
     Subsidiary
     Santiago de Chile (Chile)
     Complete Electric Energy CycleEndesa Argentina S.A.
     100.00%
     59.98%
     100.00%
     59.98%
     Subsidiary
     Buenos Aires (Argentina)
     Portfolio CompanyEndesa Brasil S.A.
     71.52%
     54.30%
     71.52%
     53.57%
     Subsidiary
     Río de Janeiro (Brazil)
     Portfolio CompanyEndesa Costanera S.A.
     69.77%
     41.85%
     69.77%
     41.84%
     Subsidiary
     Buenos Aires (Argentina)
     Electricity Generation and MarketingEndesa Eco S.A.
     100.00%
     59.98%
     100.00%
     59.98%
     Subsidiary
     Santiago de Chile (Chile)
     Renewable Energy ProjectsEndesa Inversiones Generales S.A.
     100.00%
     59.96%
     100.00%
     59.96%
     Subsidiary
     Santiago de Chile (Chile)
     Portfolio CompanyEnergex Co.
     50.00%
     29.99%
     50.00%
     29.99%
     Joint Control
     Grand Cayman (Cayman Islands)
     Portfolio CompanyEN-Brasil Comercio e Servicos S.A.
     99.99%
     54.30%
     -
     -
     Subsidiary
     Río de Janeiro (Brazil)
     Portfolio CompanyEólica Fanzenda Nova-Geracao e Comercializacao de Energía S.A.
     99.95%
     54.28%
     -
     -
     Subsidiary
     Río Grande do Norte (Brasil)
     Promotion and Development of Renewable Energy ProjectsGasAtacama S.A.
     50.00%
     29.99%
     50.00%
     29.99%
     Joint Control
     Santiago de Chile (Chile)
     Administration and Management of CompaniesGasoducto Atacama Argentina S.A.
     50.00%
     29.99%
     50.00%
     29.99%
     Joint Control
     Santiago de Chile (Chile)
     Transportation of Natural GasGasoducto Atacama Chile S.A.
     50.00%
     29.99%
     50.00%
     29.99%
     Joint Control
     Santiago de Chile (Chile)
     Transportation of Natural GasGasoducto Taltal Ltda.
     50.00%
     29.99%
     50.00%
     29.99%
     Joint Control
     Santiago de Chile (Chile)
     Transportation of Natural GasGenerandes Perú S.A.
     61.00%
     36.59%
     61.00%
     36.59%
     Subsidiary
     Lima (Peru)
     Portfolio CompanyHidroeléctrica El Chocón S.A.
     67.67%
     39.21%
     67.67%
     39.21%
     Subsidiary
     Buenos Aires (Argentina)
     Electric Energy Production and MarketingHidroinvest S.A.
     96.09%
     57.64%
     96.09%
     57.64%
     Subsidiary
     Buenos Aires (Argentina)
     Portfolio CompanyIngendesa do Brasil Ltda.
     100.00%
     59.98%
     100.00%
     59.98%
     Subsidiary
     Río de Janeiro (Brazil)
     Project Engineering ConsultingInmobiliaria Manso de Velasco Ltda.
     100.00%
     100.00%
     100.00%
     100.00%
     Subsidiary
     Santiago de Chile (Chile)
     Construction and WorksInversiones Codensa S.A.
     99.70%
     21.67%
     99.70%
     21.67%
     Subsidiary
     Bogotá (Colombia)
     Investment in Domestic Public Energy Services ActivitiesInversiones Distrilima S.A.
     79.39%
     57.54%
     68.39%
     55.90%
     Subsidiary
     Lima (Peru)
     Portfolio CompanyInversiones Endesa Norte S.A.
     100.00%
     59.98%
     100.00%
     59.98%
     Subsidiary
     Santiago de Chile (Chile)
     Investment in Energy Projects North of ChileInversiones GasAtacama Holding Ltda.
     50.00%
     29.99%
     50.00%
     29.99%
     Joint Control
     Santiago de Chile (Chile)
     Transportation of Natural GasInversora Codensa S.A.S.
     100.00%
     21.73%
     100.00%
     21.73%
     Subsidiary
     Bogotá (Colombia)
     Investment in Domestic Public Energy Services ActivitiesInvestluz S.A.
     100.00%
     61.10%
     100.00%
     59.51%
     Subsidiary
     Ceará (Brazil)
     Portfolio CompanyLuz Andes Ltda.
     100.00%
     99.09%
     100.00%
     99.09%
     Subsidiary
     Santiago de Chile (Chile)
     Transport, Distribution and Sale of Energy and FuelProgas S.A.
     50.00%
     29.99%
     50.00%
     29.99%
     Joint Control
     Santiago de Chile (Chile)
     Gas DistributionSistema Sec S.A.
     49.00%
     49.00%
     49.00%
     49.00%
     Joint Control
     Santiago de Chile (Chile)
     Supply of Signaling, Electrification and Communication SystemsSociedad Agrícola de Cameros Ltda.
     57.50%
     57.50%
     57.50%
     57.50%
     Subsidiary
     Santiago de Chile (Chile)
     Financial InvestmentsSociedad Concesionaria Túnel El Melón S.A.
     100.00%
     59.98%
     100.00%
     59.98%
     Subsidiary
     Santiago de Chile (Chile)
     Execution, Construction and Operation of the El Melon TunnelSociedad Consorcio Ingendesa-Ara Limitada
     50.00%
     29.99%
     50.00%
     29.99%
     Joint Control
     Santiago de Chile (Chile)
     Engineering ServicesSociedad Portuaria Central Cartagena S.A.
     99.85%
     16.37%
     -
     -
     Subsidiary
     Bogotá (Colombia)
     Port AdministrationSouthern Cone Power Argentina S.A.
     100.00%
     59.98%
     100.00%
     59.98%
     Subsidiary
     Buenos Aires (Argentina)
     Portfolio CompanySynapsis Argentina S.R.L.
     100.00%
     100.00%
     100.00%
     100.00%
     Subsidiary
     Buenos Aires (Argentina)
     Computer ServicesSynapsis Brasil Ltda.
     100.00%
     100.00%
     100.00%
     100.00%
     Subsidiary
     Río de Janeiro (Brazil)
     Computer ServicesSynapsis Colombia Ltda.
     100.00%
     100.00%
     100.00%
     100.00%
     Subsidiary
     Bogotá (Colombia)
     Computer ServicesSynapsis Perú S.R.I.
     100.00%
     100.00%
     100.00%
     100.00%
     Subsidiary
     Lima (Peru)
     Computer and Communication Services and ProductsSynapsis Soluciones y Servicios IT Ltda.
     100.00%
     100.00%
     100.00%
     100.00%
     Subsidiary
     Santiago de Chile (Chile)
     Supply and Market Computer Services and EquipmentTransmisora Eléctrica de Quillota Ltda.
     50.00%
     29.99%
     50.00%
     29.99%
     Joint Control
     Santiago de Chile (Chile)
     Electric Energy Transportation and DistributionTransportadora de Energía S.A.
     100.00%
     54.30%
     100.00%
     53.57%
     Subsidiary
     Buenos Aires (Argentina)
     Electric Energy Production, Transportation and Distribution
  F - 136


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APPENDIX No.2 CHANGES IN THE SCOPE OF CONSOLIDATION:  This appendix is part of note 2.4.1 Changes in the scope of consolidation.  Company
     % Ownership Interest
     % Ownership Interestat December 31, 2009
     at December 31, 2008Control
     Economic
     Consolidation Method
     Control
     Economic
     Consolidation MethodDistribuidora Eléctrica de Cundinamarca S.A.
     48.99%
     10.65%
     Proportionate IntegrationSociedad Portuaria Central Cartagena S.A.
     99.85%
     16.37%
     Global Integration
   F - 137


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APPENDIX No. 3 ENERSIS GROUP ASSOCIATED COMPANIES:  This appendix is part of note 3. g) Investments in associates accounted for using the equity method.  Company (In alphabetical order)
     % Ownership as of 12/31/2009
     % Ownership as of 12/31/2008
     Company Address
     ActivityEconomic
     EconomicElectrogas S.A.
     25.49%
     25.49%
     Santiago de Chile (Chile)
     Portfolio CompanyEndesa CEMSA S.A.
     26.99%
     26.99%
     Buenos Aires (Argentina)
     Electric Energy WholesalerEndesa Market Place S.A.
     15.00%
     15.00%
     Madrid (Spain)
     B2B (New Technologies)GNL Chile.S.A.
     33.33%
     33.33%
     Santiago de Chile (Chile)
     Promote liguified gas supply projectGNL Quintero S.A.
     20.00%
     20.00%
     Santiago de Chile (Chile)
     Development, Design, Supply of a Liquid Natural Gas Regasifying TerminalInversiones Electrogas S.A.
     42.50%
     42.50%
     Santiago de Chile (Chile)
     Portfolio CompanyKonecta Chile S.A.
     26.20%
     26.20%
     Santiago de Chile (Chile)
     ServicesSacme S.A.
     32.69%
     32.69%
     Buenos Aires (Argentina)
     Electric System Supervision and Control
   F - 138


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SCHEDULE I Rule 5-04 of the Securities and Exchange Commission requires presentation of condensed financial statements of the registrant (parent company) when restricted net asset, defined as assets not to be transferred to the parent company in the form of loans, advance or cash dividends of the subsidiary without the consent of a third party, exceed of the 25% consolidated net assets of the parent and its subsidiaries. Following are the parent company statements of financial position as of December 31, 2009 and 2008, and January 1, 2008, and the related statements of comprehensive income, changes in equity and cash flows for the years ended December 31, 2009 and 2008, in conformity with International Financial Reporting Standards, issued by the International Accounting Standards Board.  ENERSIS S.A. Separate Statements of Financial Position As of December 31, 2009, December 31, 2008, and January 1, 2008 (In thousands of Chilean pesos – ThCh$)
  ASSETS
     
     12-31-2009
     12-31-2008
     01-01-2008ThCh$
     ThCh$
     ThCh$CURRENT ASSETS
     
     55,905,791
     230,231,870
     296,051,527Current Operating Assets
     
     53,149,085
     230,231,870
     296,051,527Cash and cash equivalents
     
     27,325,320
     116,525,220
     60,202,997Trade accounts receivable and other receivables, net
     
     1,254,303
     989,775
     2,886,795Accounts receivables from related companies
     
     14,127,085
     95,088,733
     220,440,542Prepayments
     
     35,438
     391,781
     296,925Current tax receivable
     
     10,324,894
     17,166,343
     12,107,745Other assets
     
     82,045
     70,018
     116,523Non- current assets and disposal groups held for sale
     
     2,756,706
     -
     -NON-CURRENT ASSETS
     
     2,803,259,406
     2,834,794,777
     2,860,657,152Available-for-sale financial assets
     
     -
     11,529,892
     11,529,892Other financial assets
     
     24,548,711
     3,980
     25,295,681Accounts receivable from related companies
     
     170,085,874
     320,464,688
     327,695,685Investments in subsidiaries and associates companies
     
     2,563,247,088
     2,484,454,458
     2,441,774,986Intangible assets, net
     
     1,381,864
     1,454,386
     1,419,967Property, plant and equipment, net
     
     7,350,117
     7,987,120
     9,132,733Deferred tax assets
     
     36,645,752
     8,610,269
     42,862,855Hedging instrument
     
     -
     -
     388,577Prepayments
     
     -
     289,984
     556,776TOTAL ASSETS
     
     2,859,165,197
     3,065,026,647
     3,156,708,679
   F - 139


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SCHEDULE I  ENERSIS S.A. Separate Statements of Financial Position As of December 31, 2009, December 31, 2008, and January 1, 2008 (In thousands of Chilean pesos – ThCh$)
  LIABILITIES AND EQUITY
     
     12-31-2009
     12-31-2008
     01-01-2008ThCh$
     ThCh$
     ThCh$CURRENT LIABILITIES
     
     158,051,009
     288,715,065
     217,288,817Current Operating Liabilities
     
     158,051,009
     288,715,065
     217,288,817Interest-bearing loans
     
     8,823,678
     139,764,083
     8,743,521Trade accounts payable and other payables
     
     48,193,308
     48,051,125
     15,873,472Accounts payable to related companies
     
     85,896,724
     85,564,630
     185,180,920Provisions
     
     10,801,883
     7,029,486
     4,939,255Current tax payable
     
     1,651,039
     6,260,105
     327,508Other liabilities
     
     39,938
     59,384
     48,867Post-employment benefit obligations
     
     107,310
     109,978
     101,331Hedging instruments
     
     2,537,129
     1,876,274
     2,073,943NON-CURRENT LIABILITIES
     
     548,358,589
     535,318,047
     719,395,672Interest-bearing loans
     
     345,186,577
     425,991,484
     514,607,688Provisions
     
     -
     14,476,636
     -Deferred tax liabilities
     
     2,282,936
     1,176,283
     2,424,565Post-employment benefit obligations
     
     4,765,781
     3,538,933
     3,382,110Hedging instruments
     
     196,123,295
     90,134,711
     198,981,309EQUITY
     
     2,152,755,599
     2,240,993,535
     2,220,024,190Equity attributable to shareholders of the company
     
     2,152,755,599
     2,240,993,535
     2,220,024,190Issued share capital
     
     2,983,642,483
     2,983,642,483
     2,752,775,107Reserves
     
     (1,313,741,721)
     (1,202,405,090)
     (723,745,036)Retained earnings
     
     482,854,837
     459,756,142
     190,994,119TOTAL LIABILITIES AND EQUITY
     
     2,859,165,197
     3,065,026,647
     3,156,708,679
   F - 140


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SCHEDULE I  ENERSIS S.A. Separate Statements of Comprehensive Income For the years ended December 31, 2009 and 2008 (In thousands of Chilean pesos – ThCh$)
  January - DecemberSTATEMENT OF COMPREHENSIVE INCOME
     
     2009
     2008ThCh$
     ThCh$Dividends from a subsidiaries and associates
     
     204,489,046
     238,122,146Other operating income, total
     
     14,987,498
     12,857,747Total Revenues
     
     219,476,544
     250,979,893ContrinutionContribution Margin
     
     219,476,544
     250,979,893Employee expenses
     
     (14,061,411)
     (11,476,027)Depreciation and amortization
     
     (1,118,649)
     (1,399,630)Other miscellaneous operating expenses
     
     (12,595,192)
     (17,086,178)Operating Income
     
     191,701,292
     221,018,058Gain (loss) on derecognition of available-for-sale financial assets
     
     15,997,454
     -Financial expenses
     
     (25,661,743)
     (16,366,238)Foreign currency exchange differences, net
     
     (55,209,234)
     70,497,207Gain (loss) for indexed assets and liabilities
     
     12,192,704
     (43,900,465)Net Income Before Tax
     
     139,020,473
     231,248,562Income tax
     
     (33,886,710)
     18,035,962Net Income After Tax from Continuing Operations
     
     172,907,183
     213,212,600Profit (loss) from discontinued operations, net of tax
     
     -
     -Net Income
     
     172,907,183
     213,212,600-
     -Statement of Other Comprehensive IncomeNet Income
     
     172,907,183
     213,212,600Other Comprehensive IncomeCash Flow hedge
     
     (39,016,540)
     56,709,797Actuarial gain (loss) on defined benefit pension plans
     
     (974,288)
     (545,974)Income tax effect related to the components of other comprehensive income (loss)
     
     6,776,034
     (9,547,849)Total Other Comprehensive Income
     
     (33,214,794)
     46,615,974Total Comprehensive Income
     
     139,692,389
     259,828,574
   F - 141


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SCHEDULE I   ENERSIS S. A. Separate Statements of Changes in Equity For the years ended December 31, 2009 and 2008 (In thousands of Chilean pesos – ThCh$)
  Statement of Changes in Equity, Net
     Changes in Issued Capital
     Changes in reserves
     Changes in Retained Earnings
     Changes in Equity Attributable to Parent
     Changes in Minority Interest
     Changes in Equity, TotalCommon Shares
     Proposed Dividend Reserves
     Hedging Reserves
     Other ReservesShare Capital
     Share PremiumOpening Balance at 01/01/2008
     2,594,015,459
     158,759,648
     (37,842,392)
     (44,390,168)
     (641,512,476)
     190,994,119
     2,220,024,190
     -
     2,220,024,190Prior Period AdjustmentsPrior Period Errors Affecting Equity
     -
     -
     -
     -
     -
     -
     -
     -
     -Changes in Accounting Policy Affecting Equity
     -
     -
     -
     -
     -
     -
     -
     -
     -Prior Period Adjustments
     -
     -
     -
     -
     -
     -
     -
     -
     -Restated Opening Balance
     2,594,015,459
     158,759,648
     (37,842,392)
     (44,390,168)
     (641,512,476)
     190,994,119
     2,220,024,190
     -
     2,220,024,190ChangesComprehensive Income
     -
     -
     -
     47,069,132
     -
     212,759,442
     259,828,574
     -
     259,828,574Declared Cash Dividends
     -
     -
     (119,138,817)
     -
     -
     (123,841,774)
     (242,980,591)
     -
     (242,980,591)Other Increase (Decrease) in  Net Equity
     230,867,376
     -
     37,842,392
     -
     (444,432,761)
     179,844,355
     4,121,362
     -
     4,121,362Changes in Equity
     230,867,376
     -
     (81,296,425)
     47,069,132
     (444,432,761)
     268,762,023
     20,969,345
     -
     20,969,345Endings Balance at 12/31/2008
     2.824.882.835
     158,759,648
     (119,138,817)
     2,678,964
     (1,085,945,237)
     459,756,142
     2,240,993,535
     -
     2,240,993,535
  Statement of Changes in Equity, Net
     Changes in Issued Capital
     Changes in reserves
     Changes in Retained Earnings
     Changes in Equity Attributable to Parent
     Changes in Minority Interest
     Changes in Equity, TotalCommon Shares
     Proposed Dividend Reserves
     Hedging Reserves
     Other ReservesShare Capital
     Share PremiumOpening Balance at 01/01/2009
     2,824,882,835
     158,759,648
     (119,138,817)
     2,678,964
     (1,085,945,237)
     459,756,142
     2,240,993,535
     -
     2,240,993,535Prior Period AdjustmentsPrior Period Errors Affecting Equity
     -
     -
     -
     -
     -
     -
     -
     -
     -Changes in Accounting Policy Affecting Equity
     -
     -
     -
     -
     -
     -
     -
     -
     -Prior Period Adjustments
     -
     -
     -
     -
     -
     -
     -
     -
     -Restated Opening Balance
     2,824,882,835
     158,759,648
     (119,138,817)
     2,678,964
     (1,085,945,237)
     459,756,142
     2,240,993,535
     -
     2,240,993,535ChangesComprehensive Income
     -
     -
     -
     (32,406,135)
     -
     172,098,524
     139,692,389
     -
     139,692,389Declared Cash Dividends
     -
     -
     (198,069,313)
     -
     -
     (29,861,012)
     (227,930,325)
     -
     (227,930,325)Transfers to(from) Retained Earnings
     -
     -
     119,138,817
     -
     -
     (119,138,817)
     -
     -
     -Changes in Equity
     -
     -
     (78,930,496)
     (32,406,135)
     -
     23,098,695
     (88,237,936)
     -
     (88,237,936)Endings Balance at 12/31/2009
     2,824,882,835
     158,759,648
     (198,069,313)
     (29,727,171)
     (1,085,945,237)
     482,854,837
     2,152,755,599
     -
     2,152,755,599
  F - 142


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Table of Contents


SCHEDULE I   ENERSIS S.A. Separate Statements of Cash Flows For the years ended December 31, 2009 and 2008 (In thousands of Chilean pesos – ThCh$)
  Net Cash Flows provided by (used in) Operating Activities, Indirect
Method
     
     2009
     2008ThCh$
     ThCh$Cash Flows Provided by (used in) Operations, Indirect MethodOperating Cash Flows Before Changes in Working CapitalReconciliation of Net Income to Operating IncomeNet Income
     
     172,907,183
     213,212,600Adjustments to Reconcile to net Operating Income
     
     (224,906,717)
     (159,819,481)Financial expenses
     
     29,395,819
     99,214,372Financial income
     
     (15,926,780)
     (38,947,669)Dividend income
     
     (204,489,046)
     (238,122,146)Income tax
     
     (33,886,710)
     18,035,962Operating Income
     
     (51,999,534)
     53,393,119Non- Monetary Adjustments
     
     40.,330.,429
     (69,051,006)Depreciation
     
     904,318
     908,474Amortization of intangible assets
     
     214,331
     491,156Loss (gain) on sales of non-current assets not held for sale
     
     (15,997,454)
     -Other non-monetary adjustments
     
     55,209,234
     (70,450,636)Total Operating Cash Flows Before Changes in Working Capital
     
     (11,669,105)
     (15,657,887)Increase (Decrease) in Working Capital :
     
     (49,796,388)
     (794,836)Trade accounts receivable and other payables
     
     (1,420,929)
     (876,823)Other assets
     
     (6,681,990)
     11,196,632Trade accounts payable and other payables
     
     (32,444,127)
     (11,687,332)Other liabilities
     
     (9,249,342)
     572,687Net cash flows provided by (used in) other operating activities
     
     (61,465,493)
     (16,452,723)Net cash flows provided by (used in) other operating activities
     
     (15,213,356)
     18,161,775Proceeds from refunded income tax
     
     629,778
     7,470,971Other inflows (outflows) from other operating activities
     
     (15,843,134)
     10,690,804Net Cash Flows provided by (used in) operating activities
     
     (76,678,849)
     1,709,052
   F - 143


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Table of Contents


SCHEDULE I  ENERSIS S.A. Separate Statements of Cash Flows For the years ended December 31, 2009 and 2008 (In thousands of Chilean pesos – ThCh$)
  Continued  Net Cash Flows provided by (used in) Investing and Financing Activities, Indirect MethodNet Cash Flows provided by (used in) Operating Activities, IndirectMethod
     
     2009
     2008ThCh$
     ThCh$Net Cash Flows provided by (used in) Investing Activities
     
     290,880,010
     421,531,391Proceeds from sales of other financial assets
     
     27,081,403
     -Other cash flows provided by (used in) investing activities
     
     89,147,305
     233,136,374Proceeds from dividends received classified for investing purposes
     
     289,576,311
     188,653,571Purchases of property, plant and equipment
     
     (499,384)
     (258,554)Investments in subsidiaries
     
     (81,549,336)
     -Loans to related companies
     
     (4,074,609)
     -Other investment disbursements
     
     (28,801,680)
     -Net Cash Flows provided by (used in) Financing Activities
     
     (303,401,061)
     (366,918,220)Loans obtained
     
     36,500,000
     33,500,000Proceeds from loans from related companies
     
     9,363,881
     -Payments of loans
     
     (148,935,949)
     (107,794,043)Payments of loans to related companies
     
     (7,895,140)
     (145,673,288)Dividends paid to minority interests
     
     (89,894,294)
     (63,603,889)Dividend paid to shareholders of the Company
     
     (102,539,559)
     (83,347,000)Net Increase (Decrease) in Cash and Cash Equivalents
     
     (89,199,900)
     56,322,223Beginning balance of cash and cash equivalents, statement of cash flows
     
     116,525,220
     60,202,997Ending balance of Cash and Cash Equivalents, statement of cash flows
     
     27,325,320
     116,525,220
  Additional information:  1. Basis of Presentation Enersis S.A. (“the Parent”) is a holding company that conducts substantially all of its business operations through its subsidiaries. It is important to consider that for purposes of preparing separate financial statements under International Financial Reporting Standards, the Parent records its investments in subsidiaries and associates at its cost. Dividends received from a subsidiary and associate are recognized in profit or loss in the Parent’s separate financial statements when its right to receive such dividend is established. The information described bellow should be read in conjunction with the consolidated financial statements of Enersis S.A. . The basis of presentation and accounting principles used in the preparation of these separate financial statements are described in notes 2 and 3 of the financial statements except for notes 2.4.1, 2.4.2, 2.4.3, 2.5 and 3.c.1 which relates to the consolidation process.  2. Restricted Net Assets Certain assets of the Parent’s subsidiaries totaling approximately ThCh$1,798,316,054 constitute restricted net assets, as there are contractual, legal or regulatory limitations on transferring such assets outside of the countries where the respective assets are located, or because they constitute undistributed earnings of affiliates of the Parent recorded under the equity method of accounting. As of December 31, 2009 all of the restricted net assets of the Parent’s subsidiaries currently exceed 25% of the consolidated net assets of the Parent and its subsidiaries, thus requiring this Schedule I, “Condensed Financial Information of the Registrant”.  ------------------------------------------------------------------------------------------------------------------------------------------------  F - 144


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