Enel Americas Annual Report 2001

← All annual reports

FY2001 Annual Report · Enel Americas

Loading PDF…

Table of contents

Letter from the chairman of the Board

Company identification

Articles of incorporation and by-laws

Historical overview

Corporate purpose

Identification of the company

Ownership and control

Dividend policy for the year 2002

Board of directors

Organizational structure

Management of Enersis

Management of subsidiaries

Distribution of human resources

Activities

Cultural activities

Financial activities

Businesses

Corporate structure

Subsidiaries:

Generation

Endesa - Chile

Distribution

Chilectra - Chile

Río Maipo - Chile

Edesur - Argentina

Edelnor - Perú

Cerj - Brazil

Coelce - Brazil

Codensa - Colombia

Other businesses

Synapsis Soluciones y Servicios IT

CAM

CAM (Ex Diprel)

Inmobiliaria Manso de Velasco

Liability statement

Identification of other subsdiaries and related companies

Consolidated financial statements of Enersis

Individual financial statements of Enersis

Financial statements of subsidiaries

197

243

10°(cid:31)

0°(cid:31)

10°(cid:31)

80°(cid:31)

70°(cid:31)

60°(cid:31)

50°(cid:31)

40°(cid:31)

COSTA
RICA

Barranquilla

Maracaibo

Caracas

TRINIDAD
& TOBAGO

P A N A M A

Medellín

V E N E Z U E L A

Georgetown

Paramaribo

C O L O M B I A

Bogotá

Cali

Quito

GUYANA

SURINAM

FRENCH GUIANA

Cayenne

Macapá

B R A

Guayaquil

ECUADOR

Manaus

Belèm

São Luis

Fortaleza

10°(cid:31)

0°(cid:31)

Recife

Maceió

10°(cid:31)

Salvador

P E R Ú

Lima

P A C I F I C O C E A N

Arica

La Paz

B O L I V I A

Brasília

20°(cid:31)

Tropic of
Cancer

Antofagasta

P A R A G U A Y

Asunción

Belo Horizonte

São Paulo

Santos

Rio de Janeiro

A T L A N T I C O C E A N

Pôrto Alegre

CHILE

Santiago

Rosario

URUGUAY

Buenos Aires

La Plata

Montevideo

Bahia Blanca

A R G E N T I N A

Punta Arenas

90°(cid:31)

80°(cid:31)

70°(cid:31)

60°(cid:31)

50°(cid:31)

40°(cid:31)

30°(cid:31)

20°(cid:31)

500

1000

1500

2000 Miles

500

1000

1500

2000

2500

3000 Kilometers

30°(cid:31)

40°(cid:31)

50°(cid:31)

20°(cid:31)

Tropic of
Cancer

30°(cid:31)

40°(cid:31)

50°(cid:31)

Letter from the Chairman
of the Board

Dear Shareholder:

In a stunned world, the economic activity shrank

even more and forced most of the countries to

I am pleased to submit the 2001 Annual Report

concentrate on the existing problems inside their

on the management and operations of the

own frontiers.

Enersis Group for your consideration.

The negative feelings that already were around

Before starting the summary of the activity of the

our industry, particularly after the energetic crisis

Group that I am honored to preside, I deem it

of California and Brazil, were reinforced when

essential to refer to the global context in which

international giants of the energy markets started

our activity was developed.

to collapse, like Enron, AES, and some others

Towards the end of the year 2000 in late

paradigms of the industry growth in the region

which, in their own time, were considered

second millennium, the expectations were quite

as well.

optimistic, and most of the analysts thought that

2001 would set the starting of reactivation, both

In such particularly polluted environment, our

in developed and emerging economies. Shortly

Latin America watched how the signs of growth

after, though, a series of macro-unbalances in

started to weaken, even how the recession ghost

Asia, the deepening of the Middle East crisis,

started showing up, with its sequels of social and

the permanent fall in the activity in the United

political instability.

States and the dramatic slow down of the Latin

American economies made the hopes for better

On the other hand, it is worth remembering

days to become blurry.

that between the Río Grande and Cape Horn

there are 24 countries, with a different history

This worrying context turned into anguish in

and potential. This might partially explain why

the moments following the execrable attacks on

different situations of recession and instability

the New York Twin Towers and the Pentagon in

have been noticed in the region, with diverse

Washington, where thousands of innocents lost

degrees and depths. In average, though, the

their lives among unforgettable scenes of pathetic

region was once again considered a high-risk area

pain.

and the capital flows started their search for an

exit door.

In a close synthesis, this can be considered the

solutions; other areas, usually warm, have had to

social, political and economical scenario in mid of

make use of collective and individual solutions

which we have performed.

of climatization, intensive in electric consumption.

The former has made the per capita electric

Nevertheless, the instability and slow down of

energy consumption grow at higher rates than

the economic activity taught us one of the great

the variation in the product, a circumstance that

lessons of 2001: that energy in all its forms,

has contributed to the stability of industry flows.

particularly electricity, has reinforced itself as one

of the most important pillars to sustain the

This positive antecedent, however, has been

development of peoples. This is evidenced by

establishing true challenges. As a way of example,

the strict correlation between product growth and

to count with a reliable energetic park enough

increase in demand for energy, as noticed in the

to face this sustained growth on demand. In the

most diverse locations.

region, as a result from the energetic unbalances,

the process of electrical interconnection has

In fact, the more people increase their purchasing

become a real need. This, however, lies on

power, the more they need higher sophisticated

reliable and stable supplying markets. In this

goods or products that demand intense use

sense, it is worth mentioning that one of

of energy, particularly electricity.

the essential conditions for the operation and

Climate variation in the

projection of the regional interconnection is the

planet has also

reliability in supplies to customers located outside

contributed to this

the frontiers, without considering the internal

structural change as

difficulties of each country.

well. Traditionally,

humid regions have

The Enersis Group, as the main actor in the

seen a reduction in their

regional energetic area, has chosen to face this

rainfall, forcing them to

messy business environment with the caution and

look for alternative

serenity that the circumstances demand.

energetic

One of the first decisions was to strengthen the

financial situation of the company. It is worth

mentioning the execution of two syndicated loans

(one for Enersis, and the other for Endesa Chile)

for a total amount of US$1,000 million, one of

2
2

/
/

the most important transactions done in the last

Another main task for 2001 was to concentrate

years in the private sector of Latin America.

in operational improvements. A demonstration of

These credits and the higher financial flexibility

the former can be found in the better operational

that it meant for the Enersis Group are a true

result of 37%, equivalent to US$ 299 million,

demonstration of the trust that the Company

a reduction by 10% of the S&A expenses with

generates in the international capital markets.

respect to 2000; increase in labor productivity,

from 1,223 customers per employee in Dec. 2000

Another relevant financial operation done during

to 1,379 customers per employee in Dec. 2001.

2001 was the successful issuing of bonds in UF

It is worth recognizing, though, a low damage

(Unidades de Fomento), done in the Chilean

of the energy loss index, mainly related to

market, with a total placement (between Enersis

the Brazilian distribution companies, due to the

and Endesa Chile) equal to US$326 million, as

rationing applied by the authority to constrain

part of the objective of giving better coverage to

the effects of the drought suffered by that

assets and liabilities in a single currency, in order

country.

to reduce the exposition to variations in the price

of the dollar.

In the commercial environment, it is worth

mentioning the inclusion of 317,000 new

Additionally, in the field of the main financial

customers, the improvement in energy purchase,

operations, it is worth remembering the

the diversification in customers’ portfolio and the

re-purchase of Yankee bonds done both by

keeping of the quality service levels.

Enersis and its subsidiary Endesa Chile. Both

operations, registered within the framework of

Regarding investments, these were addressed

the debt restructuration policy in the Group,

preferentially to maintain and reinforce the

took advantage of the lower relevant interest

operational assets in order to keep the service

rates and represented a consolidated profit of

liability levels. The investments reached a global

approximately US$ 24 million.

amount of US$ 716 million, 72% of which

were destined to the distribution business, while

Another concrete example of the better financial

28% was destined to generation, mainly in the

situation is the growth by 24% of EBITDA, higher

continuation of the works of Central Ralco in

by US$ 337 million compared to the 2000 figure,

southern Chile.

which has increased another key indicator of

solvency, the interest coverage, from 2,1 times

It is also worth mentioning the sound investment

(Dec. 2000) to 2,7 times (Dec. 2001).

in the State of Ceará, in northern Brazil, where

Enersis and its parent company Endesa will build

Enersis employees will continue contributing their

a combined cycle power station, with a capacity

professionalism and enthusiasm to achieve the

of 310 MW, to mainly supply the needs for power

objectives we have all set upon ourselves.

and energy required by our subsidiary Coelce.

Dear Shareholders, 2001 is already past and we

At the same time, it must be remembered

shall rescue its lessons, but the entrepreneurial

that, during 2002, the second line of electric

mentality forces us to look ahead, hope for a

interconnection of the CIEN project, transporting

better future and fight to achieve it. That is

energy between Argentina and Brazil, should

our challenge, and we adhere to it with trust,

start its operations. This supposes a quantitative

determination, and bravery.

and qualitative improvement of the Argentinean

generation subsidiary companies’ flows.

You can be certain that, once again, all

the capabilities of the Enersis Group will be

Due to the previously mentioned measures,

addressed to keep the leadership in a region that,

and in spite of the unfavorable environment

instead of being considered as difficult, we prefer

described at the beginning of this annual report,

to think of it as a region plenty of opportunities.

the Enersis Group was able to strengthen its

key business fundamentals, which allow it to

Kind regards,

be alert to the best investment opportunities

that may result in the region. Of course, the

eventual investments shall be analyzed from a

very selective perspective, so that they contribute

in a certain way to create value for the investors,

a central element to the company growth policy.

Then, while some relevant actors of this sector

are leaving the region, the Enersis Group is

renewing its commitment to be the regional

energetic leader. To fulfill these expectations,

we count with a select human group, to which

I dedicate my special appreciation for their

great contribution and commitment with their

work in a difficult 2001. I trust all of the

Alfredo Llorente

Chairman

Enersis S.A.

4
4

/
/

Company identiﬁ cation

Articles of incorporation and by-laws

the capital stock of Compañía Chilena Metropolitana

de Distribución Eléctrica S.A. to the private sector

The company was originally organized as Compañía

began. This process was completed on August

Chilena Metropolitana de Distribución Eléctrica S.A.,

10, 1987. Through this process, private pension

as recorded in public deed of June 19, 1981,

funds (A.F.P.), the company’s workers, institutional

executed before Patricio Zaldívar, Notary Public in

investors and thousands of small investors became

the city of Santiago and amended by notary deed of

stockholders of the Company.

July 13 the same year.

The organizational structure was based upon

The existence of the Company was authorized and

operating activities or functions in which

its by-laws were approved pursuant to resolution
No 409-S of July 17, 1981, issued by the

attainments were evaluated on a functional basis

and profitability was limited by a tariff mechanism

Superintendence of Securities and Insurance. The

originating from the exclusive involvement of the

abstract of such authorization and its approval

Company in the business of electricity distribution.

was recorded in the Official Commerce Register of
Santiago, on page 13,099 No 7,269 of the year 1981,

In 1987, the Board of Directors proposed a division

of the different activities of the parent company.

and published in the Official Gazette on July 23,

Thus, four subsidiaries were formed that made it

1981.

possible to manage them as business units with

objectives of their own, thereby expanding the

To date, the by-laws were subsequently amended.

activities of the company to other non-regulated

The existence of the company under the current

businesses, though still related to the main scope

name of Enersis S.A. dates back to August 1, 1988.

of business.

The latest of such amendment is acknowledged

in public deed of May 26, 1999, executed before

This proposal was approved by the Extraordinary

Patricio Zaldívar. The abstract was recorded in the

Shareholders’ Meeting held on November 25, 1987,

Official Commerce Register of Santiago on page

which established its new corporate purpose.

12,533, No 10,005 and published in the Official

Gazette on June 8, 1999.

Historical overview

As a result, Compañía Chilena Metropolitana de

Distribución Eléctrica S.A. became an investment

company. On August 1, 1988, under resolution

adopted by the Shareholders’ Meeting held on April

On June 19, 1981, the Compañía Chilena de

12, 1988, the Company changed its corporate name

Electricidad S.A. was restructured into a parent

to Enersis S.A.

company and three subsidiaries, one of which was

Compañía Chilena Metropolitana de Distribución

Furthermore, to the effects of providing enhanced

Eléctrica S.A.

customer service, as of June 1, 1989, it was

approved the division of subsidiary Distribuidora

In 1985, as a result of the privatization policy

Chilectra Metropolitana S.A. into a successor

enacted by the Government of Chile, the transfer of

company that retained the corporate name, and

a new company incorporated under the name of

whatever nature and in any form or to the provision

COMPANY IDENTIFICATION

Compañía Eléctrica del Río Maipo S.A., that currently

of public utilities, or which has energy as their main

serves the electric energy distribution needs of the

input. In order to comply with its main purpose, the

rural and semi-urban areas of Chile’s Metropolitan

Company will perform the following functions:

Corporate name
ENERSIS S.A.

Type of company
Public by held limited liability company

Region.

The Extraordinary Shareholders’ Meeting held on

or liquidate companies of any nature, whose

April 27, 1994 approved changing the corporate

corporate purpose is similar or related to those

a) Promote, organize, set up, modify, dissolve

name of subsidiary Distribuidora Chilectra

of the Company.

Metropolitana S.A. to that of Chilectra S.A., effective

as of June 1, 1994.

Corporate purpose

b) Propose to its subsidiary companies investment,

financing and commercial policies as well as the

accounting practices and principles which such

companies shall abide by.

The purpose of the company is to undertake both

in Chile or abroad, the exploitation, development,

c) Supervise and coordinate the management of its

operation, distribution, transmission, transformation

subsidiary companies.

and/or sale of energy of whatever nature and in

any form, directly or through other companies,

d) Provide its subsidiary or related companies

as well as the provision of engineering advisory

with the needed financial resources to develop

services, either in Chile or abroad, in matters

their business activities, and in addition, furnish

related to such purposes. Its purpose will further

management services as well as financial,

be to manage company investments in subsidiaries

commercial, technical legal and auditing services

or related companies whose scope of business

is similar, related to or connected to energy of

and, in general, any other services such as

may appear necessary for a more adequate

performance.

In addition to its core business purpose and

acting always within the bounds of the Investment

and Financing Policy approved at the ordinary

Shareholders’ General Meeting, the company may

invest in:

1.- The acquisition, exploitation, construction, rental,

management, marketing and disposal of any

kind of real property, either directly or through

subsidiary companies.

2.- All types of financial assets, including shares,

bonds, debentures, commerce paper, and in

general all kinds of securities and equity

contributions to companies.

Río de Janeiro, Brazil

Tax register number
94,271,000 - 3

Address
Avda. Kennedy N° 5454
Vitacura, Santiago

Telephone
(56-2) 353 4400

Fax
(56-2) 378 4768

P.O. Box
1557, Santiago

Web site
www.enersis.com

E-mail
comunicacion@e.enersis.cl

Securities register number
Nº 175

External Auditors
Arthur Andersen - Langton Clarke

Subscribed and paid in capital (ThCh$)
729.328.347

Chilean stock exchange ticker symbol
ENERSIS

New York stock exchange ticker symbol
ENI

Madrid stock exchange ticker symbol
XENI

ADR’s Program custodian bank
Banco de Chile

ADR’s Program depositary bank
Citibank N.A.

Latibex custodian bank
Banco Santander

Latibex depositary bank
Santander Central Hispano
Investment S.A

National risk rating companies
Feller Rate
Fitch

International risk rating companies
Fitch
Moody’s
Standard & Poor’s

6
6

/
/

Ownership and control

Ownership structure

The capital stock of the company is divided in 9,380,000,000 shares of the same and only one series with no

par value.

At December 31, 2001, a total of 8,291,020,100 shares of common stock were subscribed and paid in, with the

following breakdown:

Shareholders

Endesa S.A.
A.F.P
Citibank N.A.
Stockbrokers, Mutual Funds and Insurance Co´s
Foreign Investment Funds
Other Shareholders
Total

Controllers identiﬁ cation

Number of
Shareholders

3
7
1
88
8
9,716
9,823

Number of
shares
5,389,163,065
1,164,868,741
744,587,100
448,850,206
83,630,103
459,920,885
8,291,020,100

65.00%
14.05%
8.98%
5.41%
1.01%
5.55%
100.00%

Pursuant to Title XV of Law No 18,045, the controller of the company, Endesa S.A. of Spain, has an ownership

interest in Enersis of 65% that derives from the controlling stake it has in the ownership of Compañía de Inversiones

Chispa Uno S.A. (21.5%) and Endesa Internacional S.A. (8.4%) plus the 35.1% direct interest in the ownership

through Elesur S.A.

List of twelve largest shareholders of the company

At December 31, 2001, Enersis was owned by 9,823 shareholders. The twelve largest were:

Name

Elesur S.A.
Compañía de Inversiones Chispa Uno S.A.
Citibank N.A. (According Circ. 1,375 S.V.S.)
Endesa Internacional S.A.
A.F.P. Provida S.A. (Pension Fund Type 1)
A.F.P. Habitat S.A. (Pension Fund Type 1)
A.F.P. Cuprum S.A. (Pension Fund Type 1)
A.F.P. Santa Maria S.A. (Pension Fund Type 1)
A.F.P. Summa Bansander S.A. (Pension Fund Type 1)
Cia. Seg. Vida Consorcio Nacional de Seguros S.A.
Banchile Corredores de Bolsa S.A.
The Chile Fund Inc. (Bea Adm. Fdos Inv.)
Subtotal: 12 shareholders
Others : 9,811 Shareholders
Total : 9,823 Shareholders

RUT

96,800,570-7
96,641,060-4
97,008,000-7
59,072,610-9
98,000,400-7
98,000,100-8
98,001,000-7
98,000,000-1
98,000,600-K
99,012,000-5
96,571,220-8
59,028,400-9

Number
of Shares
2,914,325,536
1,780,246,340
744,587,100
694,591,189
354,857,654
246,829,975
213,592,328
156,254,454
129,094,720
48,752,062
43,915,204
33,745,009
7,360,791,571
930,228,529
8,291,020,100

35.1504%
21.4720%
8.9806%
8.3776%
4.2800%
2.9771%
2.5762%
1.8846%
1.5570%
0.5880%
0.5297%
0.4070%
88.7803%
11.2197%
100.000%

Changes in ownership

During 2001, the most important changes in the ownership of Enersis were:

Name

RUT

Number of
Shares 2000
97,008,000-7 1,050,933,600
171,798,610
98,001,000-7

Number of
Shares 2001
744,587,100
213,592,328

Variation

(29.15)%
24.33%

Citibank N.A. (According Circ. 1,375 S.V.S.)
A.F.P. Cuprum S.A. (Pension Fund Type 1)
The Chile Fund Inc.
(Bea adm. Investment Fund)
The Chile Emerging Markets
(Index Common Trust Fund)
59,056,230-0
Cia. Seg. Vida Consorcio Nacional de Seguros S.A. 99,012,000-5
96,571,220-8
Banchile Corredores de Bolsa S.A.

59,028,400-9

37,427,265

33,745,009

(9.84)%

34,366,184
12,629,998
15,736,474

14,865,078
48,752,062
43,915,204

(56.75)%
286.00%
179.07%

Stock exchange trading

During 2001, Enersis´ shares transactions made by directors and principal executives of the company, were as

follows:

Shareholders

RUT

Number
of Shares
Traded

Transaction
price

Relation
with the
Company

Inmobiliaria e Inversiones
Los Robles Ltda.

78,312,910-8

4,932

$195.98

Company related with
Andrés Salas Estrades,
executive of Enersis.

Santiago Stock Exchange, Chilean Electronic Stock Exchange and Valparaiso Stock Exchange

The number of shares traded in the stock exchange where Enersis shares are traded, both in Chile, through the

Santiago Stock Exchange, the Chilean Electronic Stock Exchange, and the Valparaíso Stock Exchange, and in the

United States and Spain, through the New York Stock Exchange (NYSE), Latin American Stock Exchange of Madrid

(Latibex) correspondingly, are detailed below.

QUARTERLY STOCK EXCHANGE INFORMATION OF THE LAST THREE YEARS

Santiago Stock Exchange
1st Quarter 1999
2nd Quarter 1999
3rd Quarter 1999
4th Quarter 1999
1st Quarter 2000
2nd Quarter 2000
3rd Quarter 2000
4th Quarter 2000
1st Quarter 2001
2nd Quarter 2001
3rd Quarter 2001
4th Quarter 2001

Units
137,995,213
1,718,475,400
147,166,710
144,932,714
190,988,277
110,101,006
88,658,193
198,483,727
217,618,425
292,388,256
226,195,786
393,051,599

Amount ($)
35,192,825,361
525,233,029,516
35,449,847,785
35,221,568,865
40,078,550,323
23,513,620,910
18,383,256,232
39,102,614,613
44,437,043,299
57,663,194,013
41,936,113,910
73,344,332,507

Average Price
254.35
210.14
238.43
239.46
216.22
213.51
209.79
200.73
205.94
197.59
185.74
183.26

During 2001, 1,129 million shares were traded, equivalent to Ch$217,381 million. The share price closed at year-end

with at Ch$177.

8
8

/
/

Chile Electronic Stock Exchange
1st Quarter 1999
2nd Quarter 1999
3rd Quarter 1999
4th Quarter 1999
1st Quarter 2000
2nd Quarter 2000
3rd Quarter 2000
4th Quarter 2000
1st Quarter 2001
2nd Quarter 2001
3rd Quarter 2001
4th Quarter 2001

Units
70,762,422
86,176,190
46,885,302
47,937,017
73,157,401
61,091,600
50,955,676
72,312,976
83,608,430
158,055,600
109,886,421
169,896,292

Amount ($)
18,039,564,862
18,253,304,394
11,077,897,779
11,229,140,678
15,149,830,280
13,142,859,608
10,684,550,675
14,105,017,267
17,152,644,402
31,321,294,251
20,354,381,577
31,038,862,776

Average Price
254.93
211.81
236.28
234.08
207.17
213.97
207.78
195.78
205.77
197.13
186.42
182.94

In 2001, 521 million shares were traded, equivalent to Ch$99,867 million. The share price closed at year-end at

Ch$180.

Valparaíso Stock Exchange
1st Quarter 1999
2nd Quarter 1999
3rd Quarter 1999
4th Quarter 1999
1st Quarter 2000
2nd Quarter 2000
3rd Quarter 2000
4th Quarter 2000
1st Quarter 2001
2nd Quarter 2001
3rd Quarter 2001
4th Quarter 2001

Units
6,520,657
11,217,506
4,480,228
1,222,160
4,651,539
3,320,362
743,378
812,885
1,170,182
2,746,772
2,071,416
4,724,089

Amount ($)
1,686,163,410
2,454,206,061
1,096,735,736
301,453,662
966,141,613
694,944,396
155,761,788
164,792,985
241,026,099
532,712,377
389,093,093
856,465,194

Avarage Price
258.58
218.78
244.79
246.65
207.70
209.29
209.53
202.72
205.97
193.94
187.83
181.29

In 2001, 11 million shares were traded, equivalent to Ch$2,019 million. The share closed at year-end with a price

of $178.1

NEW YORK STOCK EXCHANGE ( NYSE)

Dividend policy for the year 2002

In the United States of America, 24 million ADR´s (1

All present members of the Board of Directors

ADR = 50 shares), equivalent to US$ 363 million were

unanimously agreed to submit to the Shareholders’

traded. The price of the ADR closed at US$ 13.3.

Meeting, scheduled for April 11, 2002, the following

LATIN AMERICAN STOCK EXCHANGE OF MADRID

STOCK EXCHANGE (LATIBEX)

Dividend Policy they expect to enforce during 2002:

In the months of May, August and November of the

year 2002, and in the month of February 2003, an

The shares of Enersis started trading in the Latin

interim dividend to be charged to the net income

American Stock Exchange (Latibex) on December

of the year 2002, amounting to 85% of the income

17, 2001. The contract unit for the company is 50

before amortization of negative goodwill from normal

shares and its stock exchange ticker symbol is XENI.

operations in the quarters ending in the months of

The Santander Central Hispano Bolsa S.A. S.V.B. will

March, June, September and December of such ﬁ scal

perform as the Company’s specialist intermediary.

year. For purposes of the above calculation, the interim

dividends for the year 2002 already distributed on

In Latibex, 91 thousands titles were traded in

such distribution date will be deducted from 85% of

December (1 title = 50 shares), equivalent to 1 million

the cumulative income before amortization of negative

euros. The price of the share closed at 15.5 euros.

goodwill.

Dividends established in pursuance of this policy will

5.- Accounting recognition of positive and negative

be applied to the income originated from normal

goodwill associated with the investments.

company operations, understanding as such the income

before amortization of negative goodwill obtained by the

The Board of Directors shall not distribute interim

Company in the period 2002, without considering those

dividends based on the income before amortization of

resulting from the following events:

negative goodwill that arise from the above events and

the Ordinary Shareholders’ Meeting shall state their

1.- Accounting effects deriving from the valuation of

view thereon when approving the final dividend.

equity contributions made to subsidiary companies.

2.- Accounting effects deriving from the recognition of

of the Company and, consequently, its fulfillment will

the premium in equity placement by subsidiaries of

be subject to the actual income before amortization of

The foregoing is the intention of the Board of Directors

their own stock.

negative goodwill as well as to the results reflected in

the projections that the Company makes from time to

3.- Proﬁ ts arising, directly or indirectly, from participation

time, or to the existence of given conditions.

in related companies organized in Chile or abroad.

As for the final dividend policy, it is the purpose of

4.- Proﬁ ts generated by subsidiary companies organized

the Board of Directors that such dividends are as a

abroad or by subsidiary companies in which the

minimum the interim dividends already distributed or

participation of the Company, either directly or

the minimum stated by the Chilean Law on Stock

indirectly, is less than 60% of the capital stock of

Companies, whichever of the two is higher.

those companies, as well as profits deriving from the

disposal of assets in such companies.

The following table shows the dividends per share paid

out over the last five years.

Dividend
Number
64
65
66
67
68
69
70
71

Dividend
Type
Interim
Interim
Interim
Interim
Definitive
Interim
Definitive
Definitive

Closing
Date
22.05.97
22.08.97
21.11.97
20.02.98
07.05.98
20.11.98
11.05.99
19.04.01

Due
Date
28.05.97
28.08.97
27.11.97
26.02.98
13.05.98
26.11.98
17.05.99
25.04.01

Ch$ per Share
($ at each year)
1.500000
2.000000
2.400000
0.800000
4.500000
1.600000
4.000000
1.806391

Accrued in
1997
1997
1997
1997
1997
1998
1998
2000

Distributable proﬁ ts (ThCh$ at dec 2001)

Sinthesis of shareholders’ comments and proposals

Net income of the period

40,926,246

Less: higher amortization,
investment value

Net income before amortization
of negative goodwill

46,069,614

(5,143,368)

Percentage distributed as a dividend
upon distributable net income before
amortization of negative goodwill

No comments were submitted to Enersis regarding

businesses carried out from January 1st to December

31st, 2001, either from senior partners or group of

shareholders that total 10% or more of the shares

issued with voting right, pursuant to the provisions of

Article 74 of Law No. 18,046 and the Articles 82 and 83

of the Regulation on Stock Companies.

1
1

0
0

/
/

Board of directors

Alfredo Llorente

Rafael Miranda

Luis Rivera

Enersis is managed by a Board of Directors made up

DIRECTORS:

by seven members who serve a three-year term and

may be reelected.

The Board of Directors elected in the Ordinary

Shareholders’ Meeting on April 2, 2001, at December

31, 2001 was composed as follows:

CHAIRMAN:

Alfredo Llorente
Tax register number: 48,062,400-9
Profession: Industrial Engineer
Escuela Técnica Superior de Ingenieros
Industriales de Madrid

VICECHAIRMAN:

Rafael Miranda
Tax register number: 48,070,966-7
Profession: Industrial Engineer
Instituto Católico de Artes e Industrias (ICAI)
de Madrid

José Fesser
Tax register number: 48,064,839-0
Profession: Lawyer
Universidad de Sevilla

Luis Rivera
Tax register number: 48,071,010-K
Profession: Road, Channels, and
Ports Engineer
Universidad Politécnica de Madrid

Ernesto Silva
Tax register number: 5,126,588-2
Profession: Commercial Engineer
Pontificia Universidad Católica de Chile

Hernán Somerville
Tax register number: 4,132,185-7
Profession: Lawyer
Universidad de Chile

Eugenio Tironi
Tax register number: 5,715,860-3
Profession: Sociologist
Escuela de Altos Estudios en Ciencias
Sociales, París, Francia

SECRETARY OF THE BOARD OF DIRECTORS:

Domingo Valdés
Tax register number: 6,973,465-0
Profession: Lawyer
Universidad de Chile

José Fesser

Ernesto Silva

Hernán Somerville

Eugenio Tironi

Remuneration of the Board of Directors

Pursuant to the provisions of article 33, Law No. 18,046 on Joint Stock Companies, the Ordinary Shareholders’ Meeting held on April 2, 2001,

agreed upon the remuneration that corresponds to the Board of Directors for the accounting period 2001.

Details on amounts paid to the Board of Directors of Enersis, and those who were Directors of this company and performed as subsidiary

directors as well, are shown below:

At December 31, 2000

Board of Directors

Director
Alfredo Llorente
Ernesto Silva
Rafael Miranda
Luis Rivera
Carlos Vicuña
Jose Fesser
Hernán Somerville
Eugenio Tironi
Enrique García
Héctor López
Leonidas Vial
Total

Enersis
ThCh$
51,369
25,684
34,246
22,830
10,556
25,684
25,684
7,565
-
-
-
203,618

Other subsidiaries
ThCh$
3,894
29,641
-
-
-
-
-
-
14,195
18,780
56,316
122,826

Total
ThCh$
55,263
55,325
34,246
22,830
10.556
25,684
25,684
7,565
14,195
18,780
56,316
326,444

Board of Directors
Enersis
ThCh$
49,323
24,601
35,183
24,006
-
24,597
24,601
24,599
-
-
-
206,910

At December 31, 2001

Board of Directors
Committe
of Enersis Other subsidiaries

ThCh$
2,340
2,332
-
-
-
-
2,332
-
-
-
-
7,004

ThCh$
-
8,539
-
-
-
-
-
-
-
-
-
8,539

Total
ThCh$
51,663
35,472
35,183
24,006
-
24,597
26,933
24,599
-
-
-
222,453

1
1

2
2

/
/

Board of Directors’ expenses

During 2001, the Board of Directors’ relevant expenses
added up to $15 million , aproximately.

committee and Domingo Valdés as the secretary of
same committee.

Activities of the committee during 2001

Committee of Directors

Pursuant to the provisions of Article 50 bis of Law
No. 19,705, Enersis has a Committee of Directors made
up of three members, with the powers and duties
provided in such article.

At December 31, 2001, the Committee of Directors of
Enersis was made up as follows:

CHAIRMAN:

Alfredo Llorente
Tax register number: 48,062,400-9

Profession: Industrial Engineer

Escuela Técnica Superior de Ingenieros

Industriales de Madrid

MEMBERS:

Ernesto Silva
Tax register number: 5,126,588-2

Profession: Commercial Engineer

Pontificia Universidad Católica de Chile

Hernán Somerville
Tax register number: 4,132,185-7

Profession: Lawyer

Universidad de Chile

SECRETARY OF THE COMMITTEE:

Domingo Valdés
Tax register number: 6,973,465-0

Profession: Lawyer

Universidad de Chile

In its first session of the period, on February 2, 2001,
the Committee of Directors examined the External
auditors’ report regarding the Balance Sheet and the
Financial Statements corresponding to the accounting
period 2000, and the examination of the External
auditors’ report on bank draft and money brokerage,
and the statement of account inspectors corresponding
to the same period.

In the aforementioned session and for the fiscal year

2001, the Committee of Directors proposed to the

Board of Directors as follows: Arthur Andersen Langton

Clarke as External auditors, Feller Rate and Fitch Chile

as domestic risk rating private companies and Fitch,

Moody’s and Standard & Poor’s as international risk

rating private companies, proposals that were accepted

by such Board.

The Committee of Directors quarterly analyzed and

approved the Individual and Consolidated Statements

of the Company; examined the antecedents of the

operations referred to by Articles 44 and 89 of

Law 18,046 on Stock Companies; issued reports on

such subject matters; and examined the remuneration

systems and compensation plans for managers and

main executive officers as well.

As a conclusion, during the fiscal year 2001, Enersis’s

Committee of Directors has properly dealt with the

issues provided in Article 50 bis of Law 18,046 on

Stock Companies.

Committee income

On January 29, 2001, the Board of Directors, in

Ordinary Meeting No. 01/2001, unanimously agreed

with attending members to conform the Committee

During 2001, the Directors’ Committee income
amounted to Ch$ 7 million approximately.

of directors to the number of members provided in

Committee expenses

article 50 bis of Law No. 19,705, consequently reducing

the members number of said Committee from four
to three. As of said date, Enersis’s Committee of

Directors was made up by the following members:
Alfredo Llorente , Hernán Somerville and Ernesto Silva,

appointing Alfredo Llorente as the chairman of such

During 2001, the Committee of Directors did not make

use of the budget for functioning expenses approved
by the Ordinary Board of Shareholders held on April

2, 2001.

Organizational structure

CORPORATE
COMMUNICATIONS OFFICER
Fernando Nadal

INSTITUTIONAL
AFFAIRS DIRECTOR
José Domínguez

CHAIRMAN
Alfredo Llorente

CHIEF EXECUTIVE OFFICER
Enrique García

CORPORATE
AUDITING OFFICER
José Raventós

CORPORATE AUDITING
DIRECTTOR
Rolf Heller

GENERAL COUNSEL
Domingo Valdés

CORPORATE BUSINESS
EXECUTIVE OFFICER
Alberto López

CHIEF
DEVELOPMENT OFFICER
Ignacio Blanco

CHIEF REGULATION OFFICER
Cristián Herrera*

ADJUNCT CHIEF
EXECUTIVE OFFICER
Juan Domínguez

CORPORATE PLANNING
AND CONTROL OFFICER
Rafael López*

CHIEF FINANCIAL OFFICER
Mauricio Balbontín

CHIEF PLANNING OFFICER
Juan Spöerer

CHIEF INVESTMENTS
AND RISK OFFICER
Ricardo Alvial

CHIEF CORPORATE
ACCOUNTING OFFICER
Fernando Isac

CHIEF PROCUREMENT
OFFICER
Francisco Núñez

CHIEF INFORMATION
SYSTEMS OFFICER
Cristóbal Sánchez

(*) These executive ofﬁ cers were not in these positions at 12/31/01,

but later on Rafael López substituted Martín Madrid, Cristián
Herrera substituted José Kindelán, Alvaro Mondaca substituted
Alfonso Brito and Víctor Badilla was promoted to a managerial
position.

(**) Gonzalo Martín left his position on January 1, 2002.

1
1

4
4

/
/

CORPORATE HUMAN
RESOURCES OFFICER
Luis de la Barra

CHIEF STAFF BUSINESS
OFFICER
Víctor Badilla *

CHIEF ORGANIZATION
OFFICER
Gonzalo Martín**

CHIEF HUMAN RESOURCES
OFFICER
Alvaro Moncada*

Management of Enersis

INSTITUTIONAL AFFAIRS DIRECTOR:

CHIEF EXECUTIVE OFFICER:
Enrique García
Tax register number: 14,704,156-K
Profession: Civil Engineer (Infrastructure)
Escuela Técnica Superior de ICCP de Madrid

ADJUNT CHIEF EXECUTIVE OFFICER:

Juan I. Domínguez
Tax register number: 6,615,791-1
Profession: Commercial Engineer
Universidad de Chile

CORPORATE BUSINESS EXECUTIVE OFFICER:

Alberto López
Tax register number: 14,672,360-8
Profession: Industrial Engineer
Universidad Politécnica de Madrid

CORPORATE PLANNING AND CONTROL EXECUTIVE
OFFICER:

Rafael López
Tax register number: 14,709,119-2
Profession: B.S. in Economic and
Business Sciences
Universidad de Málaga

CORPORATE COMMUNICATIONS OFFICER:

Fernando Nadal
Tax register number: 14,683,859-6
Profession: Journalist and Lawyer
Universidad Alcalá de Henares de Madrid

CORPORATE AUDITING OFFICER:

José Raventós
Tax register number: 14,743,221-6
Profession: B.S. in Economic and
Business Sciences
Universidad de Sevilla

CORPORATE HUMAN RESOURCES OFFICER:

Luis de La Barra
Tax register number: 7,045,333-9
Profession: Psychologist
Pontificia Universidad Católica de Chile

GENERAL COUNSEL:

Domingo Valdés
Tax register number: 6,973,465-0
Profession: Lawyer
Universidad de Chile

José Domínguez
Tax register number: 6,372,293-6
Profession: Civil Engineer
Pontificia Universidad Católica de Chile

CORPORATE AUDITING DIRECTOR:

Rolf Heller
Tax register number: 5,541,080-1
Profession: Public Accountant and Auditor
Pontificia Universidad Católica de Chile

CHIEF FINANCIAL OFFICER:

Mauricio Balbontín
Tax register number: 9,148,940-6
Profession: Commercial Engineer
Universidad de Chile

CHIEF INVESTMENT AND RISK OFFICER:

Ricardo Alvial
Tax register number: 7,330,389-3
Profession: Public Administrator
Universidad de Chile

CHIEF CORPORATE ACCOUNTING OFFICER:

Fernando Isac
Tax register number: 48,075,561-8
Profession: Economist
Universidad de Zaragoza

CHIEF PROCUREMENT OFFICER:

Francisco Núñez
Tax register number: 14,733,340-4
Profession: Civil Engineer (Infrastructure)
Universidad Politécnica de Madrid

CHIEF INFORMATION SYSTEMS OFFICER:

Cristóbal Sánchez
Tax register number: 48,072,431-3
Profession: B.S. Information Systems
Universidad Politécnica de Madrid

CHIEF DEVELOPMENT OFFICER:

Ignacio Blanco
Tax register number: 14,677,073-8
Profession: Industrial Engineer and Economist
Universidad Politécnica de Barcelona
y Universidad de Zaragoza

CHIEF REGULATION OFFICER:
Cristián Herrera
Tax register number: 10,545,763-4
Profession: Industrial Civil Engineer
Pontificia Universidad Católica de Chile

CHIEF STAFF BUSINESS OFFICER:

Víctor Badilla
Tax register number: 7,284,550-1
Profession: Psychologist B.S. in Psychology
Pontificia Universidad Católica de Chile

CHIEF ORGANIZATION OFFICER:

Gonzalo Martín
Tax register number: 14,714,812-7
Profession: B.Sc. in Chemical Sciences
Universidad Complutense de Madrid

Compensations

Years-of-service compensations paid to Enersis’s

managers in 2001 add up to Ch$65 million. This

amount corresponds to managers who disassociated

along the fiscal year 2001.

Management of subsidiaries

CHIEF EXECUTIVE OFFICER OF THE
REGIONAL GENERATION BUSINESS:

Héctor López
Tax register number: 48,062,402-5
Profession: B.S. in Law and Economic Sciences
ICADE de Madrid

CHIEF HUMAN RESOURCES OFFICER:

CHIEF EXECUTIVE OFFICER ENDESA CHILE:

Alvaro Moncada
Tax register number: 8,074,284-3
Profession: Commercial Engineer
Universidad de Concepción

CHIEF PLANNING OFFICER:

Juan Spöerer
Tax register number: 10,877,023-6
Profession: Commercial Engineer
Pontificia Universidad Católica de Chile

Remuneration of chief ofﬁ cers

The total remuneration obtained by the

aforementioned Enersis’s managers, during the year

2001, amounts to Ch$2,659 million. This amount

Héctor López
Tax register number: 48,062,402-5
Profession: B.S. in Law and Economic Sciences
ICADE de Madrid

CHIEF EXECUTIVE OFFICER OF THE
REGIONAL DISTRIBUTION BUSINESS:

Marcelo Silva
Tax register number: 5,056,359-6
Profession: Commercial Engineer
Universidad de Chile

CHIEF EXECUTIVE OFFICER CHILECTRA:

Julio Valenzuela
Tax register number: 4,469,173-6
Profession: Electric Civil Engineer
Pontificia Universidad Católica de Chile

includes the remuneration of the existing officers at

CHIEF EXECUTIVE OFFICER RÍO MAIPO:

December 31, 2001, as well as those of the officers

who disassociated along the period.

Incentive plans

Enersis has a yearly bonus plan for its executives

for their goal achievement and individual contribution

level to the company’s results. This plan includes

a definition of bonus ranges in accordance with its

executives’ hierarchical level. The bonuses that are

occasionally given to the executives consist of a given

number of monthly gross remunerations

Alejandro Gómez
Tax register number: 6,975,457-0
Profession: Civil Engineer
Universidad de Chile

CHIEF EXECUTIVE OFFICER EDESUR:

José Rovira
Tax register number: 38168242-H
Profession: Electric Industrial Engineer
Universidad Técnica Industrial de Barcelona

1
1

6
6

/
/

CHIEF EXECUTIVE OFFICER EDELNOR:

Emilio García
Tax register number: 71249480-B
Profession: Industrial Engineer
Escuela Técnica Superior de Ingenieros
Industriales de Bilbao

CHIEF EXECUTIVE OFFICER COELCE:

Celestino Izquierdo
Tax register number: 05872282-Z
Profession: Industrial Engineer
Universidad Politécnica de Madrid

CHIEF EXECUTIVE OFFICER CERJ:
Manuel Montero (*)
Tax register number: 30785023-Y
Profession: Industrial Engineer
Escuela Técnica Superior de Ingenieros
Industriales de Madrid
(*) He assumed this position on January 1,
2002, replacing Javier Villar.

CHIEF EXECUTIVE OFFICER CODENSA:

Marcelo Llévenes
Tax register number: 9,085,706-1
Profession: Commercial Engineer
Universidad de Chile

Distribution of human resources

CHIEF EXECUTIVE OFFICER SYNAPSIS SOLUCIONES
Y SERVICIOS Y IT:

Víctor Muñoz
Tax register number: 7,479,024-0
Profession: Civil Engineer
Universidad Federico Santa María de Valparaíso

CHIEF EXECUTIVE OFFICER COMPAÑÍA
AMERICANA DE MULTISERVICIOS UNO:

Pantaleón Calvo
Tax register number: 6,611,573-9
Profession: Civil Engineer
Universidad de Chile

CHIEF EXECUTIVE OFFICER COMPAÑÍA AMERICANA
DE MULTISERVICIOS (FORMER DIPREL):

Eduardo López
Tax register number: 7,706,387-0
Profession: Commercial Engineer
Universidad Católica de Valparaíso

CHIEF EXECUTIVE OFFICER INMOBILIARIA
MANSO DE VELASCO:

Andrés Salas
Tax register number: 6,002,870-2
Profession: Civil Engineer
Universidad de Chile

The distribution of human resources of Enersis and its subsidiaries and related companies, at December 31, 2001,

was as follows:

Company

Enersis
Endesa (1)
Chilectra (2)
Río Maipo
Edesur
Edelnor
Cerj
Codensa
Coelce
Synapsis (3)
Cam Uno, former Cam (4)
Cam, former Diprel (5)
Inm. Manso de Velasco
Total

Top
Executives

42
62
27
1
32
21
27
20
29
11
4
6
4
286

Professionals
and Technicians
109
617
306
24
599
276
451
359
1,109
385
139
48
7
4,429

Administrative
Staff
84
1,073
389
53
1,636
260
876
434
326
199
300
62
4
5,696

Total

235
1,752
722
78
2,267
557
1,354
813
1,464
595
443
116
15
10,411

(1) Includes: Endesa Chile - Ingendesa - Pangue - Pehuenche - Celta - San Isidro - Central Costanera - El Chocón - Edegel – Emgesa - Betania

- Cachoeira - Infraestructura 2000 - Autop. Los Libertadores - Autop. El Sol - Túnel El Melón.

(2) Includes: Empresa Eléctrica de Colina
(3) Includes: Synapsis Chile - Synapsis Argentina - Synapsis Colombia - Synapsis Brazil - Synapsis Peru
(4) Includes: Cam Chile - Cam Argentina - Cam Colombia - Cam Peru
(5) Includes: Diprel Chile - Diprel Colombia - Diprel Peru

One of the most relevant aspects in human resources

results in a higher commitment with the present and

matters carried out in 2001 is related with the inner

future Group’s company project.

re-structuring plan of Enersis’s subsidiaries, whose

main objective was to improve the efficiency of the

During the current year, a new evaluation system

processes associated to the business support areas.

for performance and incentives for all professional

Regarding the Genesis Plan, promoted by the Group’s

to the fulfillment of personal and company objectives.

top management, both standard and cost objectives

Besides, positions in the company were described and

were reached in human resources as forecasted for

evaluated according to the HAY methodology pursuant

employees of the company was established, associated

2001.

to the guidelines of the Group. These tools provided

the background for the establishment of the company’s

Another relevant fact of the year 2001 deals with the

new salary policy for the middle and professional

training plans carried out for workers (professional

levels of the company, whose foundation is excellence

and administrative), which aimed at consolidating

in performance and results, and the competitive

corporate values and the achievement of the Group’s

market.

strategic objectives, totaling 6,887 hours/man.

Within the human resources strategic plan, it is worth

program with the employees and their representatives

mentioning the training of the region’s executive

was established, which has resulted in a significant

officers in an integration and development program

increase in the quality of relations, reaching an

Regarding work relations, a permanent communication

in Spain, allowing them to share a wider and global

outstanding level to date.

vision of business as well as work on management

skills which are essential to improve the management

Summarily, the strategic Human Resources plan, based

potential of this group. The training program is

on the People Management Model, which started

the only corporate activity that gathers executive

two years ago, has continued. The establishment of

officers from different countries, cultures, education

the policies and guidelines of the Group in all the

and business lines under the same umbrella, which

companies of the Latin American region has continued

parallelly to their advancement in the Holding.

1
1

8
8

/
/

Costanera Power Station, Argentina

Saint Francis Shrine of Castro, Chile

Activities

Cultural activities

Lorenzo Moya. This year the contest has included all

the countries where the Group develops activities. An

In the last years, Enersis not only has generated,

accurate study of the works of the most representative

transported and distributed electric power but it has

artists of plastic arts of Argentina, Brazil, Colombia,

also made a great effort to daily join to the cultural

Chile and Peru was carried out. This way, 27 Latin

development of the countries were it is present, mainly

American artists participated and the winner was the

in Chile.

Chilean artist Arturo Duclós with his masterpiece “Ars

Magna Lucis et Umbrae”. The second award was

Stimulating reading and the fine arts, supporting drama

granted to the Peruvian artist Bruno Zepilli and the

performances, recovering the photographic patrimony

third award was for the Brazilian artist Carlos Vergara.

of Santiago, or increasing the architectural beauty of

churches and shrines of the country is an addition to

CHURCH AND SHRIN LIGHTING AGREEMENT

the habitual work of the Enersis Group while rising

The Enersis Group companies, jointly with Endesa-

electric networks, building huge power generation

España, have committed a total of US$ 3.7 million

stations or delivering power to customers.

in Chile, Colombia, and Peru. This amount is for the

In 2001, the Enersis Group - managed by Endesa

buildings belonging to the historical-artistic patrimony

Spain - carried out uncountable cultural activities such

of the Catholic Church in these three countries.

lighting of cathedrals, churches, temples and other

as:

In Chile, the lighting of the churches of St. Anthony

LATIN AMERICAN PAINTING CONTEST

of Padua (in Putaendo), St. Anthony (El Almendral),

“POWER AND LIFE”

the Shrine of St. Francis (Castro), the Cathedral of San

For a second consecutive year, Enersis called for artists

Bernardo, the first stage of the Cathedral of Santiago

to create. In the year 2000, the Power and Light

and the Parish of Puerto Varas have already been

Contest gathered 30 Chilean artists. The winner was

finished. Five more temples will be concluded in 2002.

2
2

0
0

/
/

Exhibition of the Latin
American Painting Contest at
the Museum of Fine Arts.

especially of Santiago. The material includes negative

film in glass plates, more than 7,300 flexible negative

films in acetate and nitrate in different sizes, and

10,000 more copies in paper. Also included are 49

corporate volumes, totaling 2,900 pages.

BOOK FAIR

For the tenth consecutive year Enersis sponsored the

International Book Fair of Santiago. This uninterrupted

support shows Enersis’ commitment with culture. On

its last edition, this Fair was visited by more than

200,000 people.

ENERGY INFORMATION CENTER

An Energy Information Center is located in Enersis’

corporate building. In this place, teaching is developed

in a didactical way to show how electricity is produced

and how it is delivered to industrial facilities and

houses. During 2001, this center was visited by 3,600

students of the Metropolitan Region.

Finally, it is worth pointing out that there are a series

of minor initiatives, as the donation of a library to

the city of Cunco, the sponsoring (together with Metro

de Santiago) of the literary contest “A Tale in A

Hundred Words”, the support of the efforts of the Real

Academia de la Lengua to include the new idioms

of America, and the production of a compact disc

called “The voices of my ancestors”, with the best Latin

American folkloric music performed by “Los Huasos

Quincheros”.

Financial activities

As of December 31, 2001 there is a 1.4

times indebtedness coefficient at a

consolidated level.

Changes in the

indebtedness of

the Company

occurred during 2001

were essentially oriented to

reschedule the existing debt to

improve its conditions.

Book Fair, Chile

CHILECTRA’S PHOTOGRAPHIC ARCHIVE

In a ceremony that took place on December, the

Enersis group opened the photograph exhibition

“Lights of Modernity” and presented a book with the

same name at the National History Museum. Both

initiatives are part of the project that aims to recover

the photographic archive of Chilectra, which

collects images of Santiago taken

between 1920 and 1930.

With these activities, not

only the photographic archive

of the company is recovered and

revalued, but it also leads to a

significant step in the construction of

the historical patrimony of the country, and

In this sense, during 2001, Enersis subscribed the

Finally, on November 30 and December 3, two series

following credits, directly and through its Agency in the

of re-adjustable bonds in Unidades de Fomento (UF)

Caiman Islands:

totaling UF 6,500,000 (US$ 150 million approximately)

January: Bank of Tokyo for US$ 50 million

were successfully placed in the local market. The due

March: Syndicated Loan for US$ 400 million

date for these bonds ranges from 8 to 21 years and

May: ABN AMRO for US$ 100 million

June: BBVA Bank for US$ 150 million

the basic rate is 5.5% over Unidades de Fomento for

the B1 series and 5.75% over Unidades de Fomento

July: Syndicated Loan for US$ 500 million

for the B2 series.

With the resources from these funding, pre-payments

of the bilateral credits were made. These were taken

within the framework defined by the so called Genesis

Project in 1999, and the purchases of Chilectra, Río

Maipo and the additional purchase of Cerj were

rescheduled, all of them in December, 2000.

As far as amendments to credit agreements, the credits

with Elesur for US$ 1,566 million and the bilateral

credits of the Genesis Project for US$ 424 million along

the year were renewed.

With the resources of the above mentioned bonds

and under quite advantageous conditions, Enersis,

through its subsidiary Enersis International, partially

repurchased part of an international bonds issuing of

Enersis Agency in Cayman Islands (Yankee Bonds) for

a US$ 100 million nominal value, which was placed

at a 7.4% annual rate and due date in 2016. Such

operation yielded a US$ 8 million profit, which was

acknowledged as out of non operating income.

2
2

/
/

Atacama Power Station, Chile

Buenos Aires, Argentina

Businesses

Historical expansion

Compañía Americana de Multiservicios Ltda.

(Former Diprel), aimed at acting as a purchase agent,

Enersis is the largest private electrical Group in Chile

an importer and exporter, and also as a merchandiser

and Latin America. Along its history, it has mainly

and materials supplier for the subsidiary companies of

focussed its business activity in the generation and

Enersis and third parties.

distribution of energy, but it has also participated in

business related to its main activity.

Enersis started its process of expansion to other

countries in the continent by participating in various

Within the above context, through its subsidiary

privatization processes, thus developing a significant

Empresa Nacional de Electricidad S.A. (Endesa

presence in the electric sectors of Argentina, Peru,

Chile), it has been materializing its investments in

Colombia, and Brazil.

the generation of electric energy in the country and

abroad.

In July of 1992, Edesur, a company that distributes

electric energy to the city of Buenos Aires, Argentina,

The electric energy distribution business has been

was adjudicated to Distrilec Inversora S.A., a company

performed jointly with its subsidiary Chilectra S.A., a

in which Enersis participates. Afterwards, in December,

company whose main aim is the distribution of electric

1995, Enersis purchased an additional 39% of that

energy in the Metropolitan Region and abroad. It is

company, becoming its controller since then.

also the main shareholder in Compañía Eléctrica del

Río Maipo S.A., which currently serves the needs for

Between July 1994 and December 1995, Enersis,

distribution and sale of electric energy in the areas

through the company Inversiones Distrilima S.A.

surrounding those served by Chilectra.

purchased the 60% of the stock capital of the Empresa

de Distribución Eléctrica de Lima Norte S.A., Edelnor.

Additionally, Enersis owns a majority stake in:

In that same year, it purchased Edechancay.

Synapsis Soluciones y Servicios IT Ltda. (Former

In 1996, Enersis entered into the Brazilian market for

Synapsis S.A.), aimed at providing services and

the first time, jointly purchasing with other partners

equipment related to computing and data processing.

and important part of the stock of the Companhia de

Eletricidade do Rio de Janeiro (Cerj) which distributes

Compañía Americana de Multiservicios Uno Ltda.

electric energy in the city of Rio de Janeiro, Brazil.

(Former CAM), whose areas of action are related to

the commercial operations and networks for public

In 1997, Enersis successfully participated through

service companies, preferably in measuring systems

a consortium in the process of capitalization and

for utilities.

subsequent control of Codensa S.A. ESP, a company

that distributes electricity in the city of Bogotá and the

Inmobiliaria Manso de Velasco Ltda., which is in

district of Cundinamarca, Colombia.

real estate development projects, and is committed

to manage, lease, purchase and sale the real estate

At the beginning of 1998, Enersis participated in

property of Enersis and its subsidiaries in Chile.

the Brazilian market once again. This time, through

2
2

4
4

/
/

a consortium, was awarded the control ownership

The attainment of this objective is sustained by an

of Companhia Energética de Ceará S.A., Coelce, a

investment strategy, focused on increasing the value

company that distributes electricity in Northern Brazil,

of the subsidiaries and related companies, and the

in the State of Ceará.

purchasing of new companies.

During 1999, Endesa España became the controlling

A key factor of this strategy involves making

stockholder of Enersis. Through a Tender Offer (OAA),

investments that significantly call for the experience,

in which it offered Ch$320 per share, the Spanish

management skills and operating capabilities of Enersis

multinational company bought 32% of Enersis, which

and its subsidiaries. Such requirement makes it

added to the 32% it had acquired in August 1997,

necessary to invest in companies in which Enersis has

increased Endesa Spain’s final stake in the ownership

a final decision on their management and operation,

of Enersis to 64%. The transaction, ended on April 7,

and the power to approve or reject its investment

1999 involved an investment of US$ 1,450 million.

projects.

On May 11, 1999, Enersis acquired an additional 35%

interest in the ownership of Endesa Chile, where it

already held a 25% of the capital stock. Consequently,

Enersis attained a 60% share in the ownership of

the generation company and became its controlling

shareholder, allowing Enersis to consolidate itself as

the largest private electricity Group in Latin America.

On the other hand, important operations were carried

out during 2000 which may be summarized as

follows: the Company’s equity increased by US$520

million. Furthermore, proceeds of US$1.4 billion were

received as a result of the sale of our subsidiaries

Transelec, Esval, Aguas Cordillera and some real estate

investments, within the strategic scope provided for in

the Genesis Project.

Moreover, important investments were made along the

year: US$364 million to increase the company’s stake

in the capital stock of Chilectra; US$150 million in

the purchasing of Edesur’s capital stock by 10%, in

Argentina, which was owned by the company workers;

US$132 million to increase the participation in the

Another development factor is its exceptional team of

professionals that actively interact with the subsidiaries,

providing them with assistance in evaluating their

investment projects and are permanently alert to new

business opportunities in their respective business

areas in the Latin American market.

The above mentioned factors enable Enersis to make

investments that contribute to the growth of profits,

with an adequate weighting of risks deriving from its

business activities.

Investments and divestments

CHILE

As envisaged in the Genesis Project, the subsidiary

Endesa Chile sold Infrastructure 2000 for

UF 2,253,000, in April 2001.

As well, also within the Genesis Project, Enersis

obtained US$23 million for the disposal of single

family land lots, industrial lots, and macrolots of the

Brazilian company Cerj; and US$23 million to increase

ENEA project.

the participation of Enersis in Río Maipo by 15%.

Growth and development

In the purchase chapter, Enersis increased its

participation in the subsidiaries Chilectra and Río

Maipo. In Chilectra, the stake increased to 98.2%,

Enersis’ main objective is to maximize the economic

with a US$3 million investment, while in Río Maipo it

value of its equity, through stable growth founded on

increased to 98.7%, with a US$0.4 million investment.

electric businesses rigorously evaluated and managed.

BRAZIL

At the same time, the feasibility of new generation

Pursuant to the strategic objective of increasing the

projects along the country in function of the demand

presence in Brazil, particularly in the generation

growth and the forecasts of the future bare prices will

sector, Enersis jointly with Endesa España started the

be analyzed.

construction of the Fortaleza Thermoelectric Power

Station in the state of Ceará. This 310 MW power

Chilectra and Río Maipo will continue with their

station and a foreseen investment of US$203 million

investments in the distribution net to keep the good

will supply the Coelce distributor as of 2004. In this

quality standards they show and cover the demand

manner, besides incrementing the participation in the

growth foreseen for the next years.

Brazilian generation market, Coelce’s electric supply is

assured, in a market with one of the highest growth

BRAZIL

indexes in Brazil.

Due to the presidential and state governors’ elections

in late 2002, it is foreseen that the privatization

Once the 0,7% belonging to minority shareholders

processes in Brazil will be postponed. Nevertheless, a

of the company was purchased on August 9, the

monitoring of opportunities will be continued. For the

99.5% of Cachoeira Dourada became controlled

definitive development of the opportunities that result

through Endesa Chile and its controlled Lajas Holding.

in Brazil, both the strategic importance of investments

This operation meant a US$2 million disbursement

and their profitability and risks will be taken into

approximately. Arrangements are in progress to obtain

account.

the cancellation certificate of the limited liability stock

company registry.

ARGENTINA

The merger of Central Buenos Aires and Central

Costanera was approved in November, 2001, to reduce

costs and improve management in these power

stations. The merger of both entities will result in a

It will also be studied the participation in

thermoelectric generation projects sponsored by the

Brazilian State within the thermoelectricity priority

program, mainly in the same areas where the

distribution concessions are located.

The development of Fortaleza’s thermoelectric project

more solid company, both in financial and commercial

will continue and the 1,000 MW second

terms, in which Central Costanera will get all the

assets, liabilities, rights and obligations of Central

Termoeléctrica de Buenos Aires.

Prospects for the year 2002

CHILE

The consolidation process and the efficiency

improvement as set forth in the Genesis Project will

continue along 2002.

Chile’s most important project will be the Ralco

hydroelectric power station, which is being developed

by the Endesa Chile subsidiary.

interconnection line between Brazil and Argentina will

most probably be put in service.

PERU

The Peruvian State has expressed its intention of

continuing with the disposal of its stakes in electric

companies. The opportunities resulting from this fact

will be analyzed.

COLOMBIA

It is expected that Codensa maintain its performance

in the areas of loss decrease and quality service

improvement, keeping customers’ orientation and

profitability as the objectives of future management.

2
2

6
6

/
/

Investment and ﬁ nancing policy of the year 2001

Enersis’ assets, a same or higher percentage as

The Ordinary Board of Shareholders, held on April 2,

2001, approved the Investment and Financing Policy as

such stipulated in the first paragraph of article 45
bis of Decree Law No 3,500.

follows:

1. INVESTMENTS

(a)

Investment areas

In order to control areas of investment and

pursuant to what is defined in the corporate

purpose of the company, actions as far as

Enersis will make investments, pursuant to the

possible will be taken into account as follows:

provisions in its by-laws, in the following areas:

(cid:127)

Propose the Shareholders’ Meetings of the

(cid:127)

Equity contributions to its public subsidiaries.

subsidiary and related companies, the

Equity contributions for investment or creation of

appointment of directors that correspond to

subsidiary or related companies, whose scope of

Enersis’ participation in the ownership of such

business is similar, related or connected to energy

companies, with appointees originating preferably

in any of its forms or nature, or the provision

from the Board of Directors of the senior

of public services that have energy as their main

management of both the Company or other

input.

subsidiary.

(cid:127)

Other investments in real property or in any other

(cid:127)

Propose the subsidiary companies the investment,

kind of financial assets, negotiable commercial

financial and commercial policies, as well as the

instruments securities and equity contributions to

accounting systems and criteria, which they are to

companies.

abide by.

(cid:127)

Supervise the management and operation of the

(b) Maximum investment limits

subsidiary and related companies.

The maximum investment limits for each

(cid:127) Maintain a permanent control of the borrowing

investment area will be as follows:

limits and the clean assets factor for accounting

purposes, in a manner such that the investments

Investments in its public subsidiaries, as needed

or equity contributions made or to be made

to enable such subsidiaries to attain their

do not involve a variation that departs from

corporate purpose and perform their function as

the parameters defining the maximum investment

concessionaires.

limits.

ii)

Investment in other subsidiary companies, such

as the total of the proportions of the fixed

2. FINANCING

assets that correspond to the participation in

(a) Maximum leverage level

each one of these other subsidiary companies

The maximum leverage level for Enersis will be

should not exceed the proportion of fixed asset

based on a ratio of total debt to equity plus

that corresponds to the participation of the public

minority interest equal to 1.75 of the consolidated

subsidiaries in the parent company.

balance sheet. Notwithstanding the above, such

iii) Other investments, such that the clean assets

ratio may increase up to 2.40 on a temporary

factor for accounting purposes of Enersis,

basis and until the total placement of the

calculated on the basis of the individual balance

capital increase approved at the Extraordinary

sheet should not represent, as a proportion of

Shareholder’ Meeting held on April 30, 1999.

(b) Authority of management to agree with

which has allowed Enersis to keep a company

creditors on restrictions to dividend

classification of “Investment Grade” beyond the

distributions

contingencies experienced by some countries of the

Restrictions to dividend distributions may be

region along last year.

agreed with creditors solely provided that they are

previously approved at a Shareholders’ Meeting

The following table details the international risk rating

(either Ordinary or Extraordinary).

assigned to the Company at December, 2001:

creditors the granting of collateral

Management has the authority to agree with

creditors on granting real and personal collateral

within the frame of the provisions in compliance

with the law and the Company’s by-laws.

(d) Essential assets for the operation of the

company

The shares of common stock that represent

Fitch

Moody´s

Debt in Local Currency
Debt in Foreing Currency

A
A-

-
Baa1

Shares
Bonds

Fitch

Feller Rate

First Class Level 1 First Class Level 2

AA-

AA+

Standard &
Poor’s
A
A-

equity contributions made by the Company to its

The corporate strategy applied by the Group to contain

subsidiaries Chilectra and Río Maipo are essential

the inherent risks to an investment company in the

assets for the operation of the company.

electric industry, it has been to manage the company’s

Risk factors

assets with both prudence and responsibility. This

policy can be observed during last year by the

strengthening of cash, decrease of debts, improvement

Enersis is an investment company whose assets are

of the quality service index, and the concentration in

properly diversified in five countries in the region,

primary activities and continuous monitoring of the

which provides it with a balanced corporate risk profile.

economic and regulatory situation in each operating

In the same manner, the financial flows of Enersis

country.

follow the same diversification with the additional

A concrete measure within the global context of

advantage that they correspond to generation,

the Group’s risk proactive handling was the creation,

distribution and other related business, which grants

during 2001, of the Enersis Group Risk Committee,

the company’s financial situation a higher stability.

aimed at identifying the most diverse risks that

could affect the company and propose on time the

The above has been duly collected by domestic and

contention measures needed. This Committee has

international risk rating companies. Indeed, such

elaborated a Group’s risk map and it is operating

companies acknowledge that one of the strengths of

under state-of-the-art techniques of Company Risk

the Group lies on its adequate investment portfolio,

Management.

2
2

8
8

/
/

Corporate structure

3
3

0
0

/
/

Generation

T
C

12,267 MW
Installed capacity
in Latin America

10°(cid:31)

0°(cid:31)

10°(cid:31)

80°(cid:31)

70°(cid:31)

60°(cid:31)

50°(cid:31)

40°(cid:31)

COSTA
RICA

Barranquilla

Maracaibo

Caracas

TRINIDAD
& TOBAGO

P A N A M A

Medellín

V E N E Z U E L A

Georgetown

Paramaribo

GUYANA

Bogotá

Cali

Quito

C O L O M B I A
Colombia
Number of power plants
10
3,055
Power (MW)
Mean annual generation (GWh) 10,106

SURINAM

Guayaquil

ECUADOR

Manaus

FRENCH GUIANA

Cayenne

Macapá

Belèm

10°(cid:31)

0°(cid:31)

São Luis

Fortaleza

Recife

Maceió

10°(cid:31)

Salvador

B R A

Lima

P E R U
Perú
Number of power plants
Power (MW)
Mean annual generation (GWh)

La Paz

8
997
4,176

B O L I V I A

P A C I F I C O C E A N

Arica

20°(cid:31)

Tropic of
Cancer

Antofagasta

CHILE

P A R A G U A Y

Asunción

Brazil
Brasília
Number of power plants
Power (MW)
Mean annual generation(GWh)

1
658
2,256

Belo Horizonte

São Paulo

Santos

Rio de Janeiro

A R G E N T I N A

Pôrto Alegre

Argentina
Number of power plants
Power (MW)
Mean annual generation (GWh)

URUGUAY

Rosario

Buenos Aires

A T L A N T I C O C E A N

4
3,622
9,948

La Plata

Montevideo

Santiago

Chile
20
Number of power plants
Bahia Blanca
Power (MW)
3,935
Mean annual generation (GWh) 15,741

Punta Arenas

90°(cid:31)

80°(cid:31)

70°(cid:31)

60°(cid:31)

50°(cid:31)

40°(cid:31)

30°(cid:31)

20°(cid:31)

500

1000

1500

2000 Miles

500

1000

1500

2000

2500

3000 Kilometers

30°(cid:31)

40°(cid:31)

50°(cid:31)

20°(cid:31)

Tropic of
Cancer

30°(cid:31)

40°(cid:31)

50°(cid:31)

Endesa Chile

Company ownership

Operational activity

Enersis, the main stockholder in Endesa Chile with

The main activities carried out by Endesa Chile

60% of the property, has channeled investment

and its subsidiaries are related to the generation

in the area of electric generation through this

and commercialization of electric energy and,

company. Additionally, the other shareholders are:

additionally, to the sales of consulting and

engineering services in all specialties.

Endesa Chile is the main electric energy generation

company in Chile and one of the country’s largest

company. In Chile it operates a total of 3,935 MW,

representing 39% of the country’s installed capacity.

Out of this figure, 73.7% is hydraulic energy, and

the rest is thermal energy. Its annual generation

added up to 15,741GWh, and its sales amounted to

18,673 GWh during the year.

Endesa Chile participates in the Central

Interconnected System (SIC), covering an area

that serves approximately 93% of the national

population, with an installed capacity of 3,753 MW,

which represents approximately 57% of the SIC.

Endesa also participates on the Northern

Electric projects

Interconnected System (SING), through its subsidiary

Celta, Gasatacama, and Nopel companies, serving

The most relevant electric projects along 2001 were:

various mining companies and sales on the spot

market. Celta’s installed capacity in this system is 182

CIEN, POWER INTERCONNECTION

MW, which represents 5% of the SING.

ARGENTINA - BRAZIL

Endesa Chile has presence in Argentina, through

This project consists in establishing an electric

Central Costanera S.A., Hidroeléctrica El Chocón S.A.,

interconnection to market a firm power of 2,000 MW

operating a total of 3,622 MW, which represents 16%

between Argentina and Brazil. It is carried out by

of the Argentinean Interconnected System’s total, an

Compañía de Interconexión Energética (CIEN), a

annual generation of 9.948 GWh and annual sales of

company related to Endesa Chile, in which Endesa

12,988 GWh.

España also participates as a partner.

In Brazil, it participates through Centrais Elétricas

It has a frequency converter station from 50 Hz to 60

Cachoeira Dourada S.A., operating a total of 658 MW,

Hz called Garabí and expansions of the substations

representing approximately 1% of the installed

Rincón de Santa María and Itá. It also considered

capacity in that country, an annual generation of

the construction of two 487-km long lines, each

2,256 GWh and annual sales of 3,743 GWh.

divided in a 1x500 kV and 134 kilometer one-circuit

long section between the substation Rincón de Santa

In Peru, the company participates through Edegel,

María in Argentina and the converter station Garabí

operating a total of 997 MW, representing 23 %

in Brazil. The other is a 525 kV and 353 km one-

of the Peruvian system, with an annual generation

circuit long section, between the converter station

of 4,176 GWh and annual sales amounting to

Garabí and the substation Itá in Brazil. The estimated

4,239 GWh.

investment in both lines of this project amounts to

US$650 million approximately.

Finally the company participates in Colombia, through

Central Hidroeléctrica de Betania S.A. E.S.P. and the

The first of these lines, with a firm power of

power generation company Emgesa, operating a total of

1,000 MW, is in service since June 2000. During

3,035 MW, representing 23% of the installed capacity

2001, the transmitted energy reached 3,810 GWh.

in Colombia, with an annual generation of 10,106 GWh

and annual sales adding up to 14,591GWh.

FINANCIAL INFORMATION (Thousand Ch$ as of December 2001)

COMPANY IDENTIFICATION

Corporate name
Empresa Nacional de Electricidad S.A

Type of company
Limited Liability Stock Company

Tax register number
91,081,000-6

Address
Santa Rosa N°76 Santiago, Chile

Telephone
(56-2) 630 9000

Fax
(56-2) 635 4720

P.O. Box
1392, Santiago

Web site
www.endesa.cl

E-mail
comunicacion@endesa.cl

Securities register number
N°114

External Auditors
Deloitte & Touche

Total number of shares
8,201,754,580

Subscribed and paid in capital (ThCh$)
1,009,510,570

Participation of Enersis
(direct and indirect)
60.0%

Corporate purpose
Generation, transport and provision of
electric energy, sale of consulting and
engineering services within the country
and abroad, and the construction and
exploitation of infrastructure works.

BOARD OF DIRECTORS
Chairman
Pablo Yrarrázaval

Vice-Chairman
Antonio Pareja

DIRECTORS
Jaime Bauzá
Jesús Burillo
José Hidalgo
Pedro Larrea
Andrés Regué
Antonio Tuset
Leonidas Vial

OFFICERS
Chief Executive Officer
Héctor López
Chief Communications Officer
Rodolfo Nieto
Legal Counsel
Carlos Martín
Chief Management and Finance Officer
Mario Valcarce
Human Resources Officer

Juan Mundaca

Planning and Control Officer

Rafael López
Energy Planning Officer
Rafael Errázuriz
Trading and Commercialization
Officer

José Venegas
Production and Transport Officer

Rafael Mateo

Generation Chile Officer

Claudio Iglesis

3
3

4
4

/
/

The second line is being built. At December 31,

At December 2001 the infrastructure works

2001, it shows an advance by 85%, it is estimated to

including roads and access bridges and the electric

be in service in the first semester of 2002.

feeding line for the works were finished. The works

for relocation of the public road, built by Endesa,

Along 2001, the main works were the construction

have a special importance since they allow access

and mounting of the towers, wiring, expansion of

to the communities of Chenqueco and the El Barco

the substations Rincón de Santa María and Itá, civil

farm. The diversion tunnel and the excavation of the

works and mounting of the two 500 kV blocks in the

dam foundations are also finished.

converter station Garabí.

RALCO

CENTRAL RALCO – SIC JOINT

This project includes the construction of a

CIEN, Power Interconnection
Argentina - Brazil

The future Central Ralco project is located at

transmission line of 2X220 kV and 140 km two-

the Alto Biobío area, about 120 km southeast

circuit line which will join the Ralco Power Station

of Los Angeles and 30 km upstream from the

and the Charrúa Substation, from which electricity

Pangue power station. This power station, whose

will be delivered to the Central Interconnected

nominal power is 570 MW, shall annually contribute

System.

an average generation of 3,100 GWh to the

Interconnected Central System (ICS).

To materialize this project, a contract for the

construction, financing, operation, maintenance

At December, 2001, the physical progress of

and transmission was bided and awarded to

the works construction was 53%, matching the

the Abengoa Chile S.A. company. This modality

modified project schedule. Endesa Chile and its

considers that Endesa Chile pays an annual toll for

contracting companies have made their greatest

20 years, a term after which the transmission line

efforts to recover the damaged works and the

will become its property. The starting on service is

fulfillment of the new work program. In mid August

foreseen for the third or fourth quarter of 2003.

2001, the new Bío Bío river diversion was finished,

an essential landmark of the project program.

Ralco Power
Plant Project, Chile

FOTO

Pangue Power Station

Other businesses

which operates on Ruta 5 Norte; la Sociedad

Among other businesses, the Ingendesa company

Concesionaria Autopista del Sol S.A. engaged in the

may be pointed out. It participated in important

design, construction, and operation of the Santiago

investment projects in Chile and Latin America,

- San Antonio highway construction, and a new 24

particularly in the areas of energy, infrastructure,

km section in the urban area Santiago-Malloco; and

mining, public works and telecommunications,

Sociedad Concesionaria Autopista Los Libertadores,

through services rendered to both companies

comprising the expansion and improvement of the

of the Group as well as to other non-related

General San Martín highway.

customers.

Additionally, Endesa Chile manages the companies

we committed the sale of Infratructure 2000 in

Sociedad Concesionaria Túnel El Melón S.A.

UF 2,253,000.

Additionally, in line with the genesis project,

3
3

6
6

/
/

Distribution

Tr
C

9.6 million customers
in ﬁ ve countries
of South America

80°(cid:31)

70°(cid:31)

60°(cid:31)

50°(cid:31)

40°(cid:31)

10°(cid:31)

0°(cid:31)

10°(cid:31)

20°(cid:31)

Tropic of
Cancer

COSTA
RICA

Barranquilla

Maracaibo

Caracas

TRINIDAD
& TOBAGO

P A N A M A

Cali

Quito

Guayaquil

ECUADOR

Medellín

V E N E Z U E L A

Georgetown

Paramaribo

Bogotá

CODENSA

C O L O M B I A

Concession area:
14,087 sq. km. in 96 munici-
palities of the Cundinamarca,
Tolima and Bogotá depart-
ments.
Physical energy sales in 2001:
8,673 GWh.
Employees:
813

GUYANA

SURINAM

FRENCH GUIANA

Cayenne

Macapá

Belèm

Manaus

P E R U

EDELNOR

Lima

B R A

Concession area:
2,440 sq. km. in 52 districts of
the northern area of Metropoli-
tan Lima, and 5 on the southern
area.
Physical sales of energy in 2001:
P A C I F I C O C E A N
3,685 GWh.
Employees:
557

La Paz

Arica

Antofagasta

CHILE

B O L I V I A

P A R A G U A Y

Asunción

São Luis

Fortaleza

COELCE

Recife

Maceió

Concession area:
146,817 sq. km. in the
184 municipalities of
the Ceará state.
Physical sales of energy
Salvador
in 2001:
5,352 GWh.
Employees:
1,464.

Brasília

Belo Horizonte

CERJ

São Paulo

Santos

Rio de Janeiro

Concession area:
31,741 sq. km in 66 municipalities of
the Río de Janeiro state.
Physical sales of energy in 2001:
6,739 GWh.
A T L A N T I C O C E A N
Employees: :
1,354

CHILECTRA

Pôrto Alegre

Concession area:
2,118 sq. km. in 33 municipalities
of the Metropolitan Region.
Physical sales of energy in 2001:
9,585 GWh.
Employees:
722

Santiago

RÍO MAIPO

Concession area:
1,500 sq. km. in 11 municipalities
of the Metropolitan Region.
Physical sales of energy in 2001:
1,245 GWh.
Employees:
78

A R G E N T I N A

Rosario

URUGUAY

Buenos Aires

EDESUR
La Plata

Montevideo

Bahia Blanca

Concession area:
3,309 sq. km. in two-thirds of
Capital Federal and twelve
partidos (counties) in the Buenos
Aires province.
Physical sales of energy in 2001:
12,909 GWh.
Employees:
2,267

Punta Arenas

90°(cid:31)

80°(cid:31)

70°(cid:31)

60°(cid:31)

50°(cid:31)

40°(cid:31)

30°(cid:31)

20°(cid:31)

500

1000

1500

2000 Miles

500

1000

1500

2000

2500

3000 Kilometers

30°(cid:31)

40°(cid:31)

50°(cid:31)

10°(cid:31)

0°(cid:31)

10°(cid:31)

20°(cid:31)

Tropic of
Cancer

30°(cid:31)

40°(cid:31)

50°(cid:31)

Chilectra

Company ownership

Besides, Enersis has appointed Chilectra as its

operator in the investments it conducts in the

Between July 3 and December 26, 2001, Enersis

distribution business area.

opened a stock purchasing power for the total

Chilectra’s shares and as a result from such

SALES AND PURCHASES OF ENERGY

operation Enersis purchased 0.2% of the shares,

At December 31, 2001, the physical energy sales

controlling 98.2% of the company shares at

reached 9,585 GWh, representing a 5.5% increase

December 31, 2001.

Operating activity

as compared to same period of 2000. Out of the

total energy invoiced during the year 2001, 29.9%

corresponds to residential sales, 28.1% to industrial

sales, 21.2% to commercial sales and 20.8% to

Chilectra is the largest electric energy distribution

other areas.

company in the country. It serves 33 boroughs

of the Metropolitan Region over an area of 2,118

sq. km. It includes 555 km of various high-tension

circuits. It also includes 51 substations and 116

power transformers with a capacity of 4,655 MVA.

During the year 2001, Chilectra purchased energy

from several generation companies in the country,

among others, Endesa Chile (33.1%), AES

Gener S.A. (35.2%), Pangue S.A. (13.1%),

Colbún S.A. (11.6%), Puyehue S.A. (1.1%), ESSA

an integral provider of residential electrical service

COMPANY IDENTIFICATION

(3.6%), and others (2.3%).

and products. Work was done in the development

TARIFF SETTING PROCESS

of products, empowering its position, reinforcing

the proactive feature that the company wishes to

The electricity rates are set every four years and

spread and deepening links with its customers,

pursuant to the electric law (DFL N°1 of 1982 issued

strengthening the various efforts done in the

by the Ministry of Mining). The next tariff review will

process of customers’orientation.

take place in the year 2004.

ENERGY LOSSES

Within this perspective, the efforts were focussed

in developing technological solutions to position

During 2001, Chilectra continued with its efforts

electric energy as the most convenient, clean, and

to control losses. The investments in new projects

safe energy in the market. Each new service and/or

related to technical measures for controlling and

product was introduced to the market through

maintaining those already existing were kept, jointly

different promotional supports.

with prevention and corrective activities carried out

on site.

Chilectra launched in early 2001 a WAP application

for Large Customers of the company. This is the first

This set of measures made it possible to keep the

time that an electric company in America (including

energy loss index under relative constant values, in

North America) and the main countries in Europe

spite of the economic situation that the country is

applies this technology, except for the Scandinavian

currently experiencing, amounting to 5.4% at the

countries, which have been the leaders of the

end of the period.

Commercial activity

impressive development of wireless applications.

This novel system allows Large Customers to

connect directly to the company’s database and

inquire about statements of account, data of

The number of customers amounted to 1,288,996

the company and the person in charge of its

at December 31, 2001, which represents a 2,1%

account. Therefore, the telephone will become

increase as compared to same period of 2000.

a communication source for product and service

quotations and also to verify the electric system

During 2001, Chilectra advanced in its positioning as

condition.

FINANCIAL INFORMATION (Thousand Ch$ as of December 2001)

Corporate name:
Chilectra S.A.

Type of company:
Limited Liability Stock Company

Tax register number:
96,524,320-8

Address:
Santa Rosa N°76, Piso 8 Santiago, Chile

Telephone:
(56-2) 675 2000

Fax:
(56-2) 675 2999

P.O. Box:
1557 Santiago

Web site:
www.chilectra.cl

E-mail:
rrpp@chilectra.cl

Securities register number:
N°321

External auditors:
Arthur Andersen – Langton Clarke

Total number of shares:
366,045,401

Subscribed and paid in capital (ThCh$):
273,902,671

Chilean Stock Exchange ticker symbol:
Chilectra

New York Stock Exchange ticker symbol
CLRAY

Participation of Enersis (direct and indirect):
98.2%

Corporate purpose:
Distribution, transmission, purchase and
sale of hydraulic, thermal, or any other
form of electric energy.

BOARD OF DIRECTORS
Chairman
Jorge Rosenblut

Vice-Chairman
José Fernández

DIRECTORS
Enrique García
(Enersis Chief Executive Officer)
Juan Domínguez
(Enersis Adjunct Chief Executive Officer)
Álvaro Quiralte
Hernán Errázuriz
Pedro Buttazzoni

OFFICERS
Regional Distribution Chief Executive Officer
Marcelo Silva
Chief Executive Officer
Julio Valenzuela
Chief Communications Officer
Guillermo Amunátegui
Distribution Officer
Rolando Hechenleitner
Commercial Officer
Juan Olavarría
Sector Regulation Officer

Guillermo Pérez del Río

Legal Counsel
Gonzalo Vial
Commercial Processes Officer
Fernando Urbina

Technical Processes Officer
José Martínez
Planning and ControlOfficer
Alfonso Prieto
Economic Planning Officer
Ana Gete-Alonso
Human Resources Officer

Carmen Urbina

4
4

0
0

/
/

Río Maipo

Company ownership

From July 3 to December 26, 2001, Enersis opened

to the market a stock purchasing power for the

total shares of Río Maipo. As a result from

such operation, Enersis purchased 0.3% of the

ENERGY SALES AND PURCHASES

At December 31, 2001, the physical sales of energy

reached 1,245 GWh, representing a 5% increase as

compared to same period last year. Out of this

total, 38.8% corresponds to residential sales, 7.2%

to the industrial sector, 43.6% to the commercial

shares, controlling 98.7% of the company shares at

sector and 10.4% to other sectors.

December 31, 2001.

Operating activity

Río Maipo is the fourth largest electric energy

distribution company in Chile. Its concession area

comprises the boroughs of San José de Maipo,

Puente Alto, La Pintana, El Bosque, San Bernardo,

Calera de Tango, Isla de Maipo, Talagante, Peñaflor,

Padre Hurtado and Curacaví, serving a population

of about 1,500,000 people, in 11 boroughs over

an area of 1,500 sq. km.. It currently owns 27 km

of high-tension lines, a substation with 10 power

transformers, with a total capacity of 81 MVA.

Additionally in 2001, Río Maipo purchased energy

to Chilectra and AES Gener. The peak demand

occurred in March and it reached 236 MW.

TARIFF SETTING PROCESS

The electricity rates, in compliance with the current

regulations (DFL N°1 of 1982 issued by the Ministry

of Mining) are set every four years. The latest Tariff

Setting Process occurred in year 2000, which ended

with the issuance of Decree No 632 of the Ministry

of Economy, Development and Reconstruction.

ENERGY LOSSES

Due to the economic crisis that affected the country

in 2001, according to the Casen survey of the

Ministry of Planning and Cooperation (Mideplan),

seven out of the eleven boroughs that compose

the concession area experienced a decrease in

their income because of an increase in the

unemployment rate. These factors contributed to a

6.4% energy loss level during the 2001 period.

Commercial activity

At December 31, 2000, the company’s customers

regulation in effect, electricity supply, the company’s

quality mainly in the following: customers’ service,

totaled 293,597, which represented an increase of

services and products.

2.4% as compared to same period last year. Out of

that figure, 96.6% are residential customers, 2.1%

Regarding its commercial offices, in 2001 Río Maipo

are commercial customers and the remaining 1.3%

implemented the Customers’ Service Management

corresponds to industrial and other customers.

(CSM) system in each of the locations where

Río Maipo aims its commercial work at achieving

facilitates management and follow-up of all

excellence in service quality and service to

commercial requirements, their execution times and

residential and industrial customers.

answers.

it provides services to the public. This system

To this effect and with the purpose of having

It is important to mention the active participation

a tool to improve customers’ service, in 2001

of the Emergency Service during the strong storm

the company carried out three service quality

that mainly affected large part of the central

measurements to set customers’ satisfaction indexes

zone of Chile in July, in which the Rio Maipo

in all contact areas. (Maipo phone, Emergency

facilities were seriously damaged. Notwithstanding

Service, Commercial and Sales Offices, Serviceletter

the above, such challenge was successfully faced

and Municipalities).

by the company’s personnel, who supported the

development of the activities aimed at normalizing

Likewise, in 2001 Río Maipo carried out 1,148

supplies from their action environment.

hours/man training aimed at improving service

FINANCIAL INFORMATION (Thousand Ch$ as of December 2001)

COMPANY IDENTIFICATION

Corporate name
Compañía Eléctrica del Río Maipo S.A.

Type of company
Limited Liability Stock Company

Tax register number
96,557,330-5

Address
Covadonga N°139,
San Bernardo, Chile

Telephone
(56-2) 540 7000

Fax
(56-2) 540 7007

P.O. Box
30, San Bernardo

E-mail
riomaipo@rmaipo.enersis.cl

Securities register number
N°345

External Auditors
Arthur Andersen – Langton Clarke

Total number of shares
360,613,552

Subscribed and paid in capital (ThCh$)
15,012,762

Chilean Stock Exchange ticker symbol:
RIO MAIPO

Participation of Enersis (direct and indirect)
98.7%

Corporate purpose
Exploite distribution and sales of electric,
hydraulic, thermal or of any other form.

BOARD OF DIRECTORS
Chairman
Alberto López
(Enersis Corporate Business Executive
Officer)

DIRECTORS
Pantaleón Calvo
Mauricio Balbontín
(Enersis Chief Financial Officer)
Julio Valenzuela
Jorge Claro
Rolando Hechenleitner
Fernando Urbina

Chief Executive Officer
Alejandro Gómez

4
4

2
2

/
/

Edesur

Company ownership

In July 1992, as a result of an international public deed,

51% of the property of Edesur was granted to Distrilec

Inversora S.A.

In December 1995, the Enersis Group increased

its direct and indirect participation in Edesur by

purchasing the 39% that had remained the property of

the Argentinean state, and so becoming the controlling

Group with the highest stock participation.

On May 31, 2000, Edesur completed the operation

of redemption of Class “C” shares of the Participant

Ownership Program, representing 10% of the corporate

capital of the distribution company. Enersis Group

because of said redemption appoints an additional

Director in Edesur’s class ”B”.

Operating activity

energy losses developed in 2000 was not changed.

COMPANY IDENTIFICATION

At year-end, the annual mobile rate was 9.9%, which

Corporate name
Empresa Distribuidora Sur S.A.

Edesur’s main purpose is the distribution and

represents a decrease by 0.4 percentage points. This

commercialization of electric energy in the southern

achievement was possible because of the development

area of Buenos Aires, comprising two thirds of the

of all of the plans and projects aimed at controlling

Federal Capital and twelve districts in the Province of

energy losses.

Buenos Aires, which represents a total concession area

of 3,309 sq. km. Chilectra has been Edesur’s exclusive

Commercial activity

operator in accordance with the bidding condition

since 1992.

The total number of customers served by Edesur

at December 31, 2001, amounted to 2,096,673. Out

SALES AND PURCHASES OF ENERGY

of this total, 86.3% are residential customers, 13.4%

The year 2001 showed a growth by 2.1% in Edesur’s

are general customers and the remaining 0.3%

energy demand, in spite of the unfavorable economic

corresponds to large customers.

context, as noticed in the GDP’s standstill.

The physical sales of energy during the period reached

affected the country, Edesur evidenced its efforts to

12,909 GWh, representing an increase by 2.5%. The

adapt itself to the needs of its customers when it

peak power was recorded during February and added

became the first public service company that accepted

Within the framework of the economic crisis that

up to 2,582 MW.

100% payment of invoices in provincial bonds, called

“Patacones”, from employees and retired people in the

TARIFF SETTING PROCESS

province of Buenos Aires.

The 2001 December mean tariff variation compared to

December 2000 experienced a decrease by 9%, as a

Likewise, within the framework of the economic

result from the variation in the wholesaler price and

decisions made that restricted the availability of

energy loss decrease.

cash for customers, the demand for alternative

mechanisms of payment was properly channeled

In 2002, after the first ten years of privatization, the

through exponential growth of payments with credit

first review of the Distribution Added Value (VAD) shall

cards, automatic credit and through Internet.

be carried out, as set forth in the concession contract,

which will result in a new tariff regime for Edesur to be

Finally, Edesur was granted the Mail Industry Award in

in effect as of September 2002.

the category Public Services that is annually delivered

by Teleperformance, a leader company in remote

ENERGY LOSSES

service and Contact Center services.

During year 2001, the estimates methodology for

FINANCIAL INFORMATION (Thousand Ch$ as of December 2001)

Type of company
Stock Company

Address
San José N°140,
Buenos Aires, Argentina

Telephone
(54-11) 4370 3700

Fax
(54-11) 4381 0708

Web site
www.edesur.com.ar

E-mail
servicio@edesur.com.ar

External auditors
Arthur Andersen - Pistrelli Díaz y
Asociados

Total number of shares
898,585,028

Subscribed and paid in capital (ThCh$)
623,352,693

Participation of Enersis (direct and indirect)
65.1%

Corporate purpose
Distribution and commercialization of
electric energy and associated operations.

BOARD OF DIRECTORS
Chairman
Rafael Fernández

Vice-Chairman
José Hidalgo

DIRECTORS
Alberto López
(Enersis Corporate Business Executive
Officer)
Marcelo Silva
Pablo Ferrero
Juan Cassagne
Rafael Arias
Jorge Volpe
Alfredo Mac Laughlin

DEPUTY DIRECTORS
Domingo Valdés
(Enersis General Counsel)
Alan Arntsen
Horacio Babino
Pedro Aramburu
Jorge Casagrande
Manuel Benites
Pablo Casado
Mariano Grondona
Pablo Lepiane

OFFICERS
Chief Executive Officer
José Rovira
Management and Finance Officer
Juan Verbistky

Human Resources Officer
Héctor Ruíz

Commercial Officer
Sandro Rollan
Service Officer
Daniel Giovanelli

Distribution Officer

Daniel Colombo

Planning and Control Officer

Juan Garade

Legal Affairs Officer
Alvaro Herrero

4
4

/
/

Edelnor

Company ownership

At December 31, 2001, almost all of the Edelnor

investors were domestic investors.

Operating activity

Edelnor is the concession holding company of

the public electricity service for the north part of

Metropolitan Lima and the Constitutional Province

of Callao, as well as for the provinces of Huaura,

Huaral, Barranca and Oyón. It serves 52 districts

on an exclusive basis and shares another 5 districts

with the distribution company for the south part.

The concession area awarded to Edelnor extends

over an area of 2,440 sq.km., 1,838 sq.km. of which

correspond to the northern part of Lima and Callao.

SALES AND PURCHASES OF ENERGY

ENERGY LOSSES

The physical sales of energy in the period reached

One of the actions made in this concept, was the

3,685 GWh, which represents an increase by 2.8%

development of a mechanism to calculate energy

as compared to 2000. Out of the total energy sold,

losses in an automatic way in each substation.

37.8% corresponds to residential sales, 28.7% to

industrial sales, 16.7% to commercial sales and

The energy losses indicator decreased from 9.9% to

16.8% to sales to other sectors. In the year 2001, the

8.9% this year due to the fact that accurate massive

peak demand amounted to 665 MW.

inspections were made under the concept of critical

During the year 2001, Edelnor, purchased energy

from five generation companies; Electroperú

Commercial activity

(51.5%), Edegel (28.4%), Eepsa (8.7%) Egenor

feeders.

(8.5%) and Cahua (2.8%). The remaining 0.1%

In 2001, Edelnor’s customers amounted to 867,251,

corresponds to self-generation of the isolated

which represented an increase by 1,8% compared

systems, which supply the rural areas of the Norte

to 2000. During the fiscal year, commercial activities

Chico zone.

TARIFF SETTING PROCESS

were transferred to the Synapsis and CAM Peru

management. This transfer included transferring

about 260 people, out of which 63 were part of

The distribution tariffs remain in force for four year

Edelnor’s payment roll.

periods and may be adjusted during this period by

means of updating formulas set by the Comisión de

Tarifas Eléctricas – CTE (Electric Tariff Commission

–ETC)The last tariff setting for distribution entered

into force on November 1, 1997 and concluded on

October 31, 2001.

Later on, the Tariff Regulation Adjunct Management

(TRAM) selected Edelnor as a model company to

carry out the study of Distribution Added Value

(DAV) in the Typical Sector 1, corresponding to the

Metropolitan Lima area. The results of the studies

for establishing the DAV, showed that their effect on

the tariff in force represents a decrease by 2.7% due

to the efficiency achieved.

In addition, eleven new free customers entered

with a total contracted power of 18 MW, which

represented an annual invoicing of US$2,987

million. Such contracts last for a 5 to 15 year term.

Likewise, an aggressive commercial collection

management plan was developed. The relation with

clients was in some cases direct, in others focussed,

according to the aging of their debts.

FINANCIAL INFORMATION (Thousand Ch$ as of December 2001)

COMPANY IDENTIFICATION

Corporate name
Empresa de Distribución Eléctrica
de Lima Norte S.A.A.

Type of company
Limited Liability Stock Company

Address
Jr. Teniente César López Nº201, Urb.
Maranga, San Miguel, Lima, Perú

Telephone
(51-1) 561 2001

Fax
(51-1) 561 0451

Web site
www.edelnor.com.pe

E-mail
enlinea@edelnor.com.pe

External auditors
Medina, Zaldívar y Asociados - Arthur
Andersen

Total number of shares
1,131,891,016

Subscribed and paid in capital (ThCh$)
226,782,528

Participation of Enersis (direct and indirect)
32.7%

Corporate purpose
Engage in activities pertaining to the
delivery of distribution, transmission, and
generation of electric energy services.

BOARD OF DIRECTORS
Chairman
Reynaldo Llosa

Vice- Chairman
José Hidalgo

DIRECTORS
Emilio García
Alberto López
(Enersis Corporate Business Executive
Officer)
Ricardo Giesecke
José Esclava
César Gutiérrez

DEPUTY DIRECTORS
Fernando Font Marie
Antonio Sabater
Fernando Urbina
Marciano Izquierdo
Ricardo Trovarelli
Juan Cayo
Ernesto Gonzales

OFFICERS
Chief Executive Officer
Emilio Garcia
Technical Officer
José Martinez
Commercialization Officer
Enrique Demarini
Communication Officer
Carlos Lozada

Planning and Control Officer
Francisco de Campos

Legal Counsel
Luis Salem
Management and Finance
Officer
Agustín Moliner
Human Resources Officer
Carlos Ureta

4
4

6
6

/
/

Cerj

Company ownership

Operating activity

The ownership structure of Companhia de

Cerj distributes electric energy in most of the

Eletricidade do Rio de Janeiro, Cerj, is detailed

State of Rio Janeiro, Brazil, serving a population

below:

of 4.1 million inhabitants, comprising 66 municipal

districts distributed over an area of 31,741 sq. km.

SALES AND PURCHASES OF ENERGY

Physical energy sales in the period amounted

to 6,739 GWh. Out of the total energy sold in

the year 2001, 33.0% corresponded to residential

sales, 31.0% to the industrial sector, 18.0% to

the commercial sector and 18.0% to other sectors.

In addition, peak demand for the year totaled

1,303 MW.

During the year 2001, Cerj, bought electric energy

mainly from the generating companies Furnas

(71.0%), Itaipu (27.0%) and the remainder was self-

generated.

TARIFF SETTING PROCESS

Commercial activity

Cerj’s distribution tariffs are adjusted as set forth

in concession agreement entered into in November

The total number of Cerj’s customers during the

1996. In December of each year, ANEEL (National

year 2001 amounted to 1,691,230 representing a 7.0%

Electric Energy Agency) reviews management and

increase with respect to 2000. Out of this total,

non-management costs, in addition to the variation

89.4% is residential customers, and the remainder

of the IGP-M index for the period, determining the

10.6% distributed in industrial customers, commercial

adjustment value to be applied. The last adjustment,

customers, and others.

applied on December, 2001.

Cerj’s tariffs will be reviewed by ANEEL in

primarily focused in developing projects to guide

December 2003, based upon the cost structure

clients in respect the rationing of energy and quality

and efficiency achieved procedure that is conducted

of service.

The commercial activity of Cerj during 2001, was

every four years.

ENERGY LOSSES

In this respect, to attend the resolution of the Energy

Crisis Committee, Cerj made several modifications in

Cerj has been implementing loss control investment

the billing systems, for the definitions of savings goals

projects to reduce this index. Nevertheless, during

for each client, new calculation of rates for energy.

this period, the energy losses accumulated in

the 12-month period interrupted its decreasing

Also, Cerj gave a 800 number for a much centralized

tendency, reaching a 22.7% annual index.

attention to clients, for commercial and emergency

calls within all the concession area.

It must be noted that, among the causes

for this unfavorable evolution, as of the year

Finally, it is worth mentioning that all agencies that

2000, the methodology by which this index was

were not in the commercial system, were connected

calculated was changed by disregarding energy

to the main computer grid. Also two attention centers

from Consumption Not Recorded (CNR), in

were reshaped. We developed a new project to control

the energy invoiced, and by incorporating energy

the past due clients, because of this the un paid debt

estimates on meters for carrying out the periodical

did not increase.

energy balance.

FINANCIAL INFORMATION (Thousand Ch$ as of December 2001)

COMPANY IDENTIFICATION

Corporate name
CERJ-Companhia de Eletricidade
do Rio de Janeiro

Type of company
Stock Company

Address
Praça Leoni Ramos,
N01 – São Domingos,
Niterói, Río de Janeiro, Brasil

Telephone
(55-21) 2613 7000

Fax
(55-21) 2613 7153

Web site
www.cerj.com.br

E-mail
cerj@cerj.com.br

External auditors
Arthur Andersen S/C

Total number of shares
1,704,025,408,820

Subscribed and paid in capital (ThCh$)
156,896,132

Participation of Enersis
(direct and indirect)
58.2%

Corporate purpose
Generation, transmission, distribution
and commercialization of electric energy.

BOARD OF DIRECTORS
Chairman
Eduardo Bernini

Vice - Chairman
Emilio López

DIRECTORS
Juan Madrigal
Antonio Gomes de Costa
Enrique García
(Enersis Chief Executive Officer)
Ignacio Blanco
(Enersis Chief Development Officer)
Fernando Nadal
(Enersis Corporate Communication
Director)
Luis Barcelos
José Martínez

DEPUTY DIRECTORS
Francisco Arias
Luis Goncalves
Fernando das Neves

OFFICERS
Chief Executive Officer
Javier Villar
Coordination and Organization Director
Javier Arias
Regulation and Market Director
José Moreno
Administrative and Financial Director

Julio Moratalla

Technical Director

Fernando Neves
Human Resources

Director
Claudio Mendes
Commercial Director

Mario de Carvalho

4
4

8
8

/
/

Coelce

Company ownership

Since April, 1998, Coelce has been operated by the

consortium Distriluz Energía Eléctrica S.A., made up

of Endesa España, Enersis, Chilectra and Cerj. In

September of same year, the group increased its stake

in the company by 6% through the purchase of the

shares of investments clubs, formed by the workers

when the company was privatized.

In September 1999, Distriluz Energía Eléctrica S.A.

was dissolved and a new controlling company,

Investluz S.A., was created, taking over the former

company.

Operating activity

Coelce’s main aim is the distribution and

commercialization of electric energy in the state of

Ceará, which represents a total concession area of

146,817 sq. km in 184 municipalities.

Sales and purchases of energy

Customer Projects, implementation of inspections out

COMPANY IDENTIFICATION

Energy sales within the period amounted to 5,352

energy losses accumulated in the 12 month period

of normal hours and other specific measures, the

GWh, representing a decrease by 9.2% compared to

reached a13% index.

same period 2000, given the electric energy rationing

that started in June 2001. Out of the total energy sold

COMMERCIAL ACTIVITY

in the year 2001, 32.2% corresponded to residential

The total number of Coelce’s customers during 2001

sales, 30.1% to the industrial sector, 18.0% to the

amounted to 1,916,522 representing a 6.7% increase

commercial sector, and 19.7% to other sectors. Peak

with respect to December 2000.

demand for the year added up to 1,065 MW in January,

which represents a decrease by 4.1% compared to

Along the year, Coelce increased its customer’s service

2000.

offices to 43, added to 17 offices, 145 Points of Service

-88% of them computerized with off-line system- and

During the year 2001, Coelce bought almost all

five mobile centers, to make the company be closer

the energy from the generating company Compañía

to customers.

Eléctrica de Sao Francisco, Chesf (99.0%)

TARIFF SETTING PROCESS

On the other hand, and due to the energy-rationing

plan imposed by the Brazilian government, an

Coelce’s distribution tariffs are regulated by the Aneel

energy consumer simulator was implemented in

Concession Contract dated 01/98 and are adjusted

the company’s website, to offer the customer

every April for the review of non-management cost

an opportunity to go on a virtual visit into a

increases. The last adjustment, applied on April 22,

house equipped with various appliances and their

2001, included a 15.0% increase plus. There, the

corresponding average energy consumption.

company coordinated the date adjustment with Chesf.

Due to the rationing, started in June 2001, the

On April 22, 2003, Aneel will review Coelce’s costs in

company received 171,476 request forms regarding

order to carry out the first tariff review, which will be

the energy consumption goal and sent 166,819 letters

subsequently applied every four years.

to the customers, out of which 90,098 processes

ENERGY LOSSES

were admitted (54%) and 76,721 rejected (46%). The

payment of invoices was eased by the increase in

Coelce has been implementing loss control investment

payment centers, which ranged from 681 (in January

projects in order to reduce this index. During the year

2001) to 705 (in December 2001), showing an increase

2001, through the Standardization Project and Large

by 4.1%.

FINANCIAL INFORMATION (Thousand Ch$ as of December 2001)

Corporate name
Companhia Energética do Ceará

Type of company
Limited Liability Stock Company

Address
Av. Barão de Studart N°2917, Aldeota,
Barrio Dionísio Torres, Fortaleza, Ceará,
Brazil CEP 60.127-900

Telephone
(55-85) 216 1100

Fax
(55-85) 216 1410

Web site
www.coelce.com.br

E-mail
investor@coelce.com.br

External auditors
Arthur Andersen

Total number of shares
155,710,600,088

Subscribed and paid in capital (ThCH$)
245,083,722

Participation of Enersis (direct and indirect)
26.6%

Corporate purpose
Explore the distribution and sales of
electric, thermal and hydraulic energy or
in any other form.

BOARD OF DIRECTORS
Chairman
Manuel Montero

Directors
Mauricio Balbontín
(Enersis Chief Financial Officer)
Ignacio Blanco
(Enersis Chief Development Officer)
Antonio Cunha
Laércio do Amaral
Emilio López
José Martínez
Jorge Frota
Manuel das Neves
Fernando Nadal
(Enersis Chief Corporate Communication
Officer)

DEPUTY DIRECTORS
Antonio Vianna
Rogerio Themudo
Antonio Pires
Antonio Gouveira
Isabel Pinto
Francisco Arias
Luis GonÇalves
Priscila Sartori
Juárez Ferreira

OFFICERS
Chief Executive Officer
Celestino Izquierdo
Institutional Project Officer
José Nunes

Commercial Officer
Josep Pujols
Management and Human Resources
Officer
José Barreto
Administrative and Financial Officer

Antonio Alves

Planning and Control Officer
Juan Harrison
Distribution Officer
José Távora

5
5

0
0

/
/

Codensa

Company ownership

On September 15, 1997, Empresa de Energía de

Bogotá S.A. E.S.P., capitalized 48.5% of its ownership,

which was acquired by the consortium Luz de Bogotá,

made up of the companies Enersis, Chilectra and

Endesa Desarrollo. Subsequently, on October 23,

Codensa S.A. E.S.P. was organized.

Operating activity

Codensa renders energy commercialization services

in a 14,087 sq. km. area, including Bogotá and the

Cundinamarca department.

SALES AND PURCHASES OF ENERGY

Physical energy sales during the period amounted to

8,673 GWh. Out of the total energy sold in the year

2001, 83.0% of it was sold on the regulated market,

11.7% on the non-regulated market, and 4.4% to

public lightning.

The energy purchases were 6,895 GWh. A 96.9% was

Commercial activity

purchased to service the regulated market and 3.0% to

service the non-regulated market.

At year-end 2001, Codensa rendered energy

TARIFF SETTING PROCESS

commercialization services to 1,850,489 customers.

With respect to 2000, it constituted an increase by

The service rendering unit cost grew by 4.4% with

2.7% of customers served by Codensa.

respect to last year, that is to say, 3.3% lower than

inflation, ending in December in $165.6/KWh. This

In March, all non-regulated customers were transferred

behavior was basically due to the cost decrease in

from Codensa to Emgesa, totaling 256 customers with

purchases of energy and to the change in methodology

an average monthly consumption of 66 GWh.

for the payment of restrictions (a higher cost of

required energy under the operating restrictions of the

The loss analysis per geographical segmentation was

transmission net) in the Energy Wholesale Market.

carried out, noticing that more than 70% of the

Additionally, the updating method of the Unit Cost

Based upon this result the loss control actions were

losses were located out of the urban area of Bogota.

was modified in September. Before, a change in the

reoriented.

UC was applied when it presented a +/- 3% variation,

but now it is applied when the variation in any of its

“Codensa Hogar” was launched and started on. Its aim

components is higher than 3%.

was to improve customers’ faithfulness, offering at the

The new period will begin in 2003.

offered are the life battery, virtual shopping, home

same time basic services for our users. The products

Energy losses

service and appliance´s funding.

To start with the Agreement of the Endesa Group

At year-end 2001, the company recorded a 11.8% index

and the Colombian Episcopate for church lighting, the

for energy losses, higher than the 10.4% reported

Primate Cathedral of Bogota lighting was inaugurated.

for the year 2000; nevertheless, the re-calculation of

the previous year loss, resulting from the impact of

the overestimation of energy in meters, amounted to

11.7%, with a 0.15% index increase, showing a loss

stabilization path.

FINANCIAL INFORMATION (Thousand Ch$ as of December 2001)

COMPANY IDENTIFICATION

Corporate name
Codensa S.A. E.S.P.

Type of company
Domicile Public Utility Service Company

Address
Carrera 13ª A N° 93-66
Bogotá, Colombia

Telephone
(571) 601 6060

Fax
(571) 601 5917

Web site
www.codensa.com.co

E-mail
servicio@codensa.com.co

External auditors
Arthur Andersen y Cía Limitada

Total number of shares
187,193,274

Subscribed and paid in capital (ThCh$)
1,006,941,300

Participation of Enersis (direct and indirect)
22.9%

Corporate purpose
Distribution and sales of electric energy
and performance of similar kind,
complementary, and related activities.

BOARD OF DIRECTORS
Chairman
Andrés Regué

DIRECTORS
Francisco García
Fernando Urbina
José Martinez
José Vargas
Israel Fainboim
Rafael Villarreal

DEPUTY DIRECTORS
Marcelo Llévenes
Lucía Piedrahíta
José Inostroza
Roberto Ospina
Henry Navarro
Silvia Escobar
Carmenza Saldías

OFFICERS
Chief Executive Officer
Marcelo Llévenes
Regulation Officer
Felipe Acosta
Secretary General
Alvaro Camacho
Communication Officer
Emilia Sarracino
Distribution Officer
José Inostroza
Commercial Officer
Rogelio Toro

Chief Financial Officer
Lucia Piedrahíta

Human Resources Officer
Alvaro Bolaños

Planning and Control Officer

Roberto Ospina

5
5

2
2

/
/

Others
businesses

T
C

Coverage is extended
in Latin America

80°(cid:31)

70°(cid:31)

60°(cid:31)

50°(cid:31)

40°(cid:31)

COSTA
RICA

Barranquilla

Maracaibo

Caracas

TRINIDAD
& TOBAGO

V E N E Z U E L A

Georgetown

Paramaribo

GUYANA

SURINAM

FRENCH GUIANA

Cayenne

10°(cid:31)

0°(cid:31)

10°(cid:31)

P A N A M A

Panama
CAM (Former-Diprel)

Medellín

Cali

Quito

Bogotá

C O L O M B I A
Colombia
Synapsis
CAM
CAM (Former-Diprel)

Guayaquil

ECUADOR

Manaus

Lima

P E R U

Perú
Synapsis
CAM

P A C I F I C O C E A N

Arica

La Paz

B O L I V I A

10°(cid:31)

0°(cid:31)

Macapá

Belèm

São Luis

Fortaleza

B R A

Recife

Maceió

10°(cid:31)

Brazil
Synapsis
CAM

Brasília

Salvador

20°(cid:31)

Tropic of
Cancer

Antofagasta

CHILE

P A R A G U A Y

Asunción

Belo Horizonte

São Paulo

Santos

Rio de Janeiro

A T L A N T I C O C E A N

Pôrto Alegre

30°(cid:31)

40°(cid:31)

50°(cid:31)

A R G E N T I N A

Rosario

URUGUAY

Buenos Aires

Montevideo

La Plata
Argentina
Synapsis
CAM
CAM (Former-Diprel)

Bahia Blanca

Santiago

Chile
Synapsis
CAM
CAM (Former Diprel)
Inmobiliaria
Manso de Velasco

Punta Arenas

90°(cid:31)

80°(cid:31)

70°(cid:31)

60°(cid:31)

50°(cid:31)

40°(cid:31)

30°(cid:31)

20°(cid:31)

500

1000

1500

2000 Miles

500

1000

1500

2000

2500

3000 Kilometers

20°(cid:31)

Tropic of
Cancer

30°(cid:31)

40°(cid:31)

50°(cid:31)

Synapsis Soluciones y Servicios IT

Company ownership

Synapsis is 100% property of Enersis. This

During 2001 the guidelines given by the Genesis

Project of the Enersis Group continued, same

as new contracts achieved with inner and outer

is the Group’s professional service company in

customers among which it is worth pointing

information technologies.

Operating activity

out the outsourcing of information service,

telecommunications and control systems, in Brazil;

the establishment of the SIE2000A financing system

in the companies of the Enersis Group in Brazil,

Its strength lies in its thirteen year experience

Colombia, and Peru; and the Service Contracts from

providing integral solutions addressed to satisfy

Call Center to Smartcom Chile, Edelnor Peru, and

customers’ needs, based upon the contribution

Coelce in Brazil.

to information systems, telecommunications and

telecontrol.

During the fiscal year, the corporate project

tasks were continued, including the Intranet of

Synapsis’s services are addressed to large

the Enersis Group, the Convergence Project CDP,

companies and institutions in various economic

the corporate backbone, and the new Synergi@

sectors, both in the domestic and the international

Commercial 4i system established in Chilectra and

market, covering practically any need from a

Río Maipo. It is worth mentioning also the starting

technological point of view.

on of the Human Resources Project for the Enersis

Group (based upon Meta4) aimed at making the

companies’ remuneration process homologue.

In Brazil, the establishment of the Technical Systems

in Coelce continued and the Unification Project of

the Commercial Systems Coelce/Cerj project ended.

In Edesur, Argentina, the company was awarded the

Establishment Project of the Distribution Technical

System (SDE) and the inspection project in its two

phases.

In Chile, Synapsis was awarded the Folder Control

Project of the Instituto de Normalización Previsonal-

System (Meta4) in the companies Aguas Cordillera

INP (Social Security Standardization Institute) and

and Los Dominicos.

also developed its Web site. The latter included

an important application that allows the return

The Elecktra Noreste Company of Panama, hired

and payment of the social security contributions

Synapsis services for the renewal and updating

of more than 500,000 employers, via Internet. It

of its Commercial Management Systems. The

also continued with the services of other contracts

Commercial Management System establishment

that Synapsis entered with such Government´s

project successfully ended after a seven-month

institution.

period.

In Aguas Andina, the potable water and sewage

In Peru, besides the award of the Call Center

system company of Santiago de Chile, a Unified

Services to Edelnor, it was awarded the Control

Commercial System was established in a very short

Center services, SCADA, the Matucana Central and

time, whose project included new functionality to

the Remote Terminal Units of Hydraulic and Thermal

the Synergi@ solution that operated such company.

Plants, and the outsourcing of Net Management,

Agua Cordillera’s database was also incorporated to

Microinformation Systems Support and Applications

this system. Another project that was developed in

at the Edegel company.

2001 was the establishment of the Remuneration

FINANCIAL INFORMATION (Thousand Ch$ as of December 2001)

COMPANY IDENTIFICATION

Corporate name
Synapsis Soluciones y Servicios IT Ltda.

Type of company
Limited Liability Stock Company

Tax register number
96.529.420-1

Address
Catedral N° 1284, Piso 10
Santiago, Chile

Telephone
(56–2) 632 1240

Fax
(56–2) 696 5999

Web site
www.synapsis.cl

E-mail
synapsis@synapsis.enersis.cl

External auditors
Arthur Andersen - Langton Clarke

Subscribed and paid in capital (ThCh$)
3,943,580

Participation of Enersis (direct and indirect)
100%

Corporate purpose
Supply and sell services and equipment
related to computers and data processing
for public utility companies and others,
both domestic and foreign.

AGENTS
Cristóbal Sánchez
(Enersis Chief Information Systems Officer)
Francisco Núñez
(Enersis Chief Procurement Officer)

OFFICERS
Chief Executive Officer
Víctor Muñoz
Adjunct Chief Executive Officer
Manuel Marín
Management and H. Resources Executive
Officer
Rodrigo Morelli
Generation and Distribution Systems
Executive Officer
Roberto Carvajal
Internal Management Executive Officer
Claudio Escudero
Control Systems Executive Officer
Juan Urbina
Projects and Quality Executive Officer
Gustavo Pardo
Synapsis Chile Executive Officer
María Letelier
Commercial Systems and Telephoning
Executive Officer
Luis Campos

New Business Executive Officer
Manuel de Andrés
Infrastructure Executive Officer
Guillermo Toro

5
5

6
6

/
/

CAM

Corporate name change

in the international environment, its subsidiaries of

Argentina, Colombia, Peru and the newly subsidiary

The Compañía Americana de Multiservicios

created in Brazil, have made it possible for Cam

Uno Ltda. (CAM) is 100% owned by Enersis,

to consolidate its presence in the area of integral

and continues the engineering and electric service

service associated to measurement for electric

activity that was previously performed by

distribution companies.

Inmobiliaria Manso de Velasco.

The year 2001 represented for CAM the

As a relevant fact it must be informed that in the

consolidation of the new electronic technology

Extraordinary Shareholders’ Meeting held on August

in measurement. This year, Codensa of Colombia

23, 2001, it was agreed to change the Compañía

was supplied with the first 100,000 monophasic

Americana de Multiservicios S.A. into a limited

electronic meters which guarantee higher accuracy

liability stock company, changing its corporate name

and exactitude and 20,000 units were sold

into Compañía Americana de Multiservicios Uno

to Chilectra for the first time. Auditing for

Limitada.

Operating activity

measurement quality certification to Edelnor,

Codensa and Cerj continued.

On the other hand, great advances in the

CAM has been consolidating its presence in the

development of measurement concentrators for

market with works for different utility service

buildings were carried out and the

companies that have positioned it in a top level

commercialization of the first 2,000 electronic

in the domestic environment. On the other hand,

meters for residential hour multi-tariff for Chilectra

was started. Likewise, 90% of large customers

of this company with remote measurement was

achieved, a technology also applied in Codensa and

Edelnor.

During this fiscal year, CAM also consolidated its

participation in the areas of telecommunications,

infrastructure and integral services to utilities.

In this environment, the company continued

with the net maintenance and operation service,

electricity projects and urbanization constructions,

construction contractors management, loss and

dullness control, cut and reconnection services,

technical and commercial inspections, measurement

equipment readings, invoice and bill delivery, and

associated to the measurement laboratory. In

the commercialization of non-traditional products,

Argentina, it is worth mentioning the ISO 9002 and

among others. These services were rendered both

ISO 14001 Quality Certification granted after the

for the Group’s companies and others.

auditing made by a certification body upon the

Quality Management Systems implemented in the

Finally, in the regional market, the subsidiary CAM

distribution companies Edenor and Edesur.

Brazil started its operations with main office in

Río de Janeiro and a branch in Fortaleza. CAM

It is noticed that 2001 was the year of Safety

Colombia consolidated its operation and special

for CAM, and after six operation months without

mention deserves its free customer management

accidents it was granted an award. This achievement

in remote measurement, concentrated in the

was possible once the commitments undertaken by

generation company Emgesa. The subsidiary in Peru

all the members of the company were fulfilled,

became in charge of the measurement systems

aimed at carrying out work in a safe environment

integral management associated to Edelnor’s large

and with a 100% attendance to risk prevention

customers, and continues rendering services

training by the personnel

FINANCIAL INFORMATION (Thousand Ch$ as of December 2001)

COMPANY IDENTIFICATION

Corporate name
Compañía Americana de Multiservicios
Uno Ltda.

Type of company
Limited Liability Stock Company

Tax register number
96,530,650-1

Address
Tarapacá N°934, Santiago, Chile

Telephone
(56–2) 632 5000

Fax
(56–2) 639 7608

E-mail
camsa@cam.enersis.cl

External auditors
Arthur Andersen - Langton Clarke

Subscribed and paid in capital (ThCh$)
1,031,693

Participation of Enersis (direct and indirect)
100%

Corporate purpose
Perform professional and technical
services for the management of
warehouses, control execution, measure
and gauge, start-up and maintenance
of systems, machinery and apparatus,
maintenance of distribution and
transmission networks.

AGENT
Francisco Núñez
(Enersis Chief Procurement Officer)
Cristobal Sánchez
(Enersis Chief Information Systems Officer)

OFFICERS
Chief Executive Officer
Pantaleón Calvo
Networks Executive Officer
Andreas Gebhardt
Engineering Services Executive Officer
Jorge Salinas
Public Lighting and Nets Maintenance
Executive Officer
Omar Aramayo

5
5

8
8

/
/

CAM (Former Diprel)

Corporate name change

It is worth mentioning that the business developed

with some of the most strategic suppliers for our

As a relevant fact it must be informed that in the

activity, such as the agreements on alliances to

Extraordinary Shareholders’ Meeting held on August

board new market niches.

23, 2001, it was agreed to change the Distribuidora

de Productos Eléctricos S.A. into a limited liability

We might also highlight the participation in the

stock company, changing its corporate name into

main massive projects of public lighting, both

Compañía Americana de Multiservicios Limitada,

through Chilectra as well as directly in municipalities

and in addition, it was agreed to enhance its

outside their area of concession, as it happened in

corporate purpose.

Operating activity

the city of Copiapó, in the III Region of the country.

Regarding new businesses, the sale of non-

traditional products, such as air conditioning

During 2001, Diprel experienced an increase by 77%

systems, heat pumps, heat accumulators, electric

in its results in comparison with the previous year,

thermos and induction boilers, artifacts and

essentially explained by an aggressive commercial

systems that promote and increase the electrical

plan addressed to the non-regulated customer

consumption, has been successful both in the

market, with an income increase by 96%.

Metropolitan Region as in the rest of the country.

In the international field and with non-related

customers, important businesses were agreed in

Argentina, with electric distributors from the north

of the country, as well as in Panama and Colombia.

Regarding Human Resources, a process of collective

negotiation was carried out with the workers’

union for term 2002-2005. This meant an increase

in economic and social benefits of the current

collective contract, in a framework of austerity,

participation, and commitment with the objectives

set by the Genesis Project.

On the other hand, the merging process between

Diprel and Compañía Americana de

Multiservicios S.A. started last October, which aims

to offer integral solutions to third customers. The

necessity, which implied the decrease of 16% of

structural redesign of both companies became a

the workers’ roll. They received the socio-economic

support specified in the retirement plan set forth by

Enersis for the companies of the Group.

FINANCIAL INFORMATION (Thousand Ch$ as of December 2001)

COMPANY IDENTIFICATION

Corporate name
Compañía Americana
de Multiservicios Ltda.

Type of company
Limited Liability Stock Company

Tax register number
96,543.670-7

Address
Bulnes N°1238, Santiago, Chile

Telephone
(56-2) 688 4502

Fax
(56-2) 681 2219

Web site
www.diprel.com

E-mail
info@diprel.enersis.cl

External auditors
Arthur Andersen -Langton Clarke

Subscribed and paid in capital (ThCh$)
1,540,344

Participation of Enersis (direct and indirect)
100%

Corporate purpose
Purchase, sales, imports and distribution
of products related with electricity.

AGENT
Francisco Núñez
(Enersis Chief Procurement Officer)
Cristobal Sánchez
Chief Information Systems Officer

OFFICERS
Chief Executive Officer
Eduardo López
Commercial Executive Officer
José Peña
Corporate Contracts Executive Officer
Antonio Barreda
Logistics Executive Officer
Raúl Puentes
Diprel Peru Chief Executive Officer
Mario Albornoz

6
6

0
0

/
/

Inmobiliaria Manso de Velasco

Real estate projects

highway under concession Costanera Norte, whose

road has been planned from western Santiago, close

The year 2001 was marked by important events

to ENEA.

happening abroad (terrorist strikes and Argentine

crisis), deepening the economic crisis already affecting

It is currently in its Phase I, corresponding to

the country and also its depressed real estate sector.

the concept of Industrial and Business Park,

Notwithstanding this fact, it is worth mentioning that

notwithstanding the sales of other areas for housing

the results of Inmobiliaria Manso de Velasco during

and commercial purpose. The project has innovative

2001 amounted to $5,433 million, which was achieved

facilities, and green areas were implemented according

mainly through two important projects, namely, ENEA

to the master plan, which offer better equipment and

and Santuario del Valle.

service areas to the lots and users.

ENEA

In the 2001 fiscal year balance, ENEA obtained

The project corresponds to a real estate development

important advancements in commercial terms and

in a 1,000 ha. area , strategically located in western

in the development of its urbanization works. ENEA

Santiago, borough of Pudahuel, in the vicinity of the

sold more than 30 ha.. of land, with an associated

International Airport of the Chilean capital city. The

income higher than $6,012 million. This exceptional

remarkable project road relationship and connectivity

result, considering the depressed real estate market

has been complemented by future works in the vial

and the low sales observed in similar projects of the

link of Av. Américo Vespucio, Av. San Pablo and the

competition, was reached by creating specific projects

out of the industrial environment, both inside and

2001. The accumulated area of macrolots sold until this

COMPANY IDENTIFICATION

outside the urbanized areas.

date reaches 162,6% ha., amount which represents a

These initiatives were evaluated and offered to various

addressed to development by third parties.

investors and, finally, a hotel, a service station, housing

lots and a graveyard joined the project.

Regarding residential single-family lots, accumulated

93% of the land whose commercialization has been

sales amounted to 487 lots, a figure that represents

Inserted in the project, it is the partnership Aguas

88% of the total available lots in the project.

Santiago Poniente, which renders the sanitary services

associated to the real estate development of the ENEA

TAPIHUE

project. Due to important sales achieved by the

project, the company started sanitary infrastructure

Tapihue project includes properties corresponding to

works, which will serve more than 1,400 customers in

lands associated to the farms Tapihue , Amancay (lot

the short term.

B) and La Petaca. Such properties, as a whole, involve

an area of 7,302 ha. in the borough of Til-Til, province

Aguas Santiago Poniente is therefore in a phase of

of Chacabuco, Metropolitan region, and are classified

increasing its economic value, as it is certain that these

as CUDA (Conditioned Urban Development Area), per

clients associated to the ENEA development will need

the Santiago Metropolitan Urban Development Plan.

the services of the company.

SANTUARIO DEL VALLE

Property lease

During 2001, the Santuario del Valle project devoted to

In its real estate business, Manso de Velasco manages

the sale of single-family residential lots and macrolots,

a total of 43,473 m2 built corresponding to buildings,

with reported sales for $7,651 million.

stores and offices, which generated accumulated

income amounting to $1,926 million during the year

Considering the depressed real estate market that

2001.

affected the period, especially in the sale of single-

family sites addressed to the high segment of

It is worth pointing out that during the year 2001

the population, it was possible to create and sell

period, the property disinvestment process continued,

condominium projects for the housing development of

resulting from the restructuring and new strategic

third parties, whose lands were also addressed to high

definition of Enersis. The sales of important properties

income segments. Its demand, although diminished,

was achieved, yielding US$1,439 million.

kept it in reasonable levels. The sales of land for

this kind of project represented 79% of total sales of

FINANCIAL INFORMATION (Thousand Ch$ as of December 2001)

Corporate name
Inmobiliaria Manso de Velasco Ltda.

Type of company
Limited Liability Stock Company

Tax register number
96,909,280-8

Address
Avda. Kennedy N°5454, Piso 5
Vitacura, Santiago

Telephone
(56–2) 378 4700

Fax
(56–2) 378 4702

E-mail
rch@mvelasco.enersis.cl

External auditors
Arthur Andersen - Langton Clarke

Subscribed and paid in capital (ThCh$)
5,848,651

Participation of Enersis (direct and indirect)
100%

Corporate purpose
Purchase, sell, parcel, subdivide, market
and commercially operate at any title, of
all types of real property, either on its
own behalf or on behalf of others.

AGENT
Alberto López
(Enersis Chief Business Executive Officer)

OFFICERS
Chief Executive Officer
Andrés Salas
Legal Counselor
Alfonso Salgado
Real Estate Development Executive Officer
Gustavo Cardemil
Project ENEA Executive Officer
Bernardo Küpfer

MANSO DE VELASCO

6
6

2
2

/
/

Liability statement

The undersigned Directors of Enersis and its Chairman who have put their hand and executed this statement herein

are liable under oath of the truth of all the information delivered in the current Annual Report, under the provisions

of the general regulation No. 30 of the Superintendence of Securities and Insurance.

CHAIRMAN:
Alfredo Llorente
Profession: Industrial Engineer
Tax registry number: 48,062,400-9

VICECHAIRMAN:
Rafael Miranda
Profession: Industrial Engineer
Tax registry number: 48,070,966-7

DIRECTOR:
José Fesser
Profession: Lawyer
Tax registry number: 48,064,839-0

DIRECTOR:
Luis Rivera
Profession: Roads, Channels and Ports Engineer
Tax registry number: 48,071,010-K

DIRECTOR:
Ernesto Silva
Profession: Commercial Engineer
Tax registry number: 5,126,588-2

DIRECTOR:
Hernán Somerville
Profession: Lawyer
Tax registry number: 4,132,185-7

DIRECTOR:
Eugenio Tironi
Profession: Sociologist
Tax registry number: 5,715,860-3

CHIEF EXECUTIVE OFFICER:
Enrique García
Profession: Civil Engineer (Infrastructure)
Tax registry number: 14,704,156-K

Identiﬁ cation of other subsidiaries
and related companies

Distrilec Inversora S.A.

Enersis de Argentina S.A.

Enersis Energía de Colombia S.A. E.S.P.

Corporate name
Distrilec Inversora S.A.

Type of company
Stock Company

Address
San José Nº 140 (1076)
Buenos Aires - Argentina

Telephone
(54-11) 4370 3700

Fax
(54-11) 4381 0708

Corporate name
Enersis de Argentina S.A.

Type of company
Foreign Stock Company

Address
Suipacha N 1111 Piso 18,
Buenos Aires, Argentina

Telephone
(54-1) 315 9959

Fax
(54-1) 311 2317

External auditors
Arthur Andersen/Pistrelli Díaz y Asoc.

External auditors
Arthur Andersen/Pistrelli Díaz y Asociados

Subscribed and paid in capital (ThCh$)
332,309,610

Subscribed and paid in capital (ThCh$)
77,937

Participation of Enersis (direct and indirect)
51.5%

Participation of Enersis (direct and indirect)
100%

(in liquidation)

Corporate name
Enersis Energía de Colombia S.A. E.S.P.

Type of company
Foreign Stock Company

Address
Carrera 13A Nº 93-66, Piso 2, Bogotá, Colombia

Telephone
(57-1) 601 5790

Fax
(57-1) 601 5799

External auditors
Arthur Andersen

Subscribed and paid in capital (ThCh$)
102,147

Participation of Enersis (direct and indirect)
100%

Corporate purpose
Participate on its own behalf or associated with
third parties in the cooperation for sales of
stock packages of Edesur and Edenor.

Corporate purpose
Mainly financial, able to carry out all types of
financial and investment activities.

Corporate purpose
Purchase of electric energy and its sale to final
users, either regulated or non-regulated.

BOARD OF DIRECTORS
Chairman
José Hidalgo
Vice-Chairman
Rafael Fernández
Directors
Marcelo Silva
Alberto López
(Enersis Corp. Business Director)
Alan Arntsen
Mariano Grondona
Horacio Babino
Luis Sas
Jorge Casagrande
Daniel Maggi

Deputy Directors
Domingo Valdés
(Enersis Legal Counsel)
Luis Barry
Pablo Casado
Pedro Aramburu
Manuel Benites
Antonello Tramonti
Jorge Barros
Pablo Ferrero
Carlos Álvarez
Nicolás Carusoni

LIQUIDATORS
Main liquidator
Alvaro Pérez

Deputy liquidator
Fernando Foix

BOARD OF DIRECTORS
Chairman
Enrique García
(Enersis Chief Executive Officer)

Vice-chairman
Juan Domínguez
(Enersis Adjunct Chief Executive Officer)

Directors
Domingo Valdés
(Enersis Legal Councel)
Mariano Grondona
Alan Arntsen
Betina Di Croce
María Justo

Deputy Directors
Martín Madrid
(Enersis Corp. Chief Planning Officer)
Fernando Nadal
(Enersis Corp.Communication Officer)
Manuel Benites
Alberto López
(Enersis Corp. Business Director)

6
6

4
4

/
/

Enersis International

Empresa Eléctrica de Panamá S.A.

Interocean Developments Inc.

Corporate name
Enersis International

Type of company
Foreign Stock Company

Address
P.O. BOX 309,
Ugland House, South Church St,
Grand Cayman, Cayman Islands

Telephone
(345) 949 8066

Fax
(345) 949 8080

External auditors
Arthur Andersen

Corporate name
Empresa Eléctrica de Panamá S.A.

Corporate name
Interocean Developments Inc.

Type of company
Foreign Stock Company

Type of company
Foreign Limited Company

Address
Av. Samuel Lewis and Calle Nº 53,
Edificio Omega, Mezzanine, Panamá,
República de Panamá

Address
Av. Samuel Lewis and Calle Nº53, Edificio
Omega, Mezzanine, Panamá, República de
Panamá

Telephone
(507) 263 5333

Fax
(507) 263 6983

External auditors
Arthur Andersen

Telephone
(507) 263 5333

Fax
(507) 263 6983

External auditors
Arthur Andersen

Subscribed and paid in capital (ThCh$)
192,744,152

Subscribed and paid in capital (ThCh$)
135,410,504

Subscribed and paid in capital (ThCh$)
127,281,537

Participation of Enersis (direct and indirect)1
100%

Participation of Enersis (direct and indirect)
100%

Corporate purpose
Any legal activity related with energy or fuel.

BOARD OF DIRECTORS
Chairman
Juan Domínguez
(Enersis Adjunct Chief Executive Officer)

Vice-Chairman and Secretary
José Palomo

Directors
Carlos Arrieta
Leopoldo López
Máximo de la Peña
(Enersis Tax Counselor)

Secretary
José Palomo

Directors
Carlos Arrieta
Máximo de la Peña
(Enersis Tax Counselor)

Secretary
José Palomo

Directors
Carlos Arrieta
Máximo de la Peña
(Enersis Tax Counselor)

Investluz S.A.

Corporate name
Investluz S.A.

Type of company
Foreign Stock Company

Inversiones Distrilima S.A.

Luz de Bogotá S.A.

Corporate name
Inversiones Distrilima S.A.

Type of company
Foreign Stock Company

Corporate name
Luz de Bogotá S.A.

Type of company
Stock Company

Address
Av. Barao de Studart N°2917, Dionísio Torres
Fortaleza, Ceará, Brazil

Address
Tnte. César López Rojas Nº 201, Urbanización
Maranga, San Miguel, Lima, Perú

Address
Carrera 13 A Nº 93-66, Piso 6,
Bogotá, Colombia

Telephone
(5585) 216 1123

Fax
(5585) 216 1423

External auditors
Arthur Andersen

Telephone
(51-1) 561 1604

Fax
(51-1) 452 3007

External auditors
Arthur Andersen

Telephone
(571) 601 5402

Fax
(571) 601 5905

External auditors
Arthur Andersen

Subscribed and paid in capital (ThCh$)
560,512,266

Subscribed and paid in capital (ThCh$)
121,467,134

Subscribed and paid in capital (ThCh$) 1
200,905,942

Participation of Enersis (direct and indirect)
47%

Participation of Enersis (direct and indirect)
54.5%

Participation of Enersis (direct and indirect)
44.7%

Corporate purpose
Participation in the capital of Coelce and in
other partnerships in Brazil and abroad as a
partner.

Corporate purpose
Carrying out investments in other partnerships
especially in those related with distribution and
generation of electric energy.

Corporate purpose
Any legal activity related with energy or fuel or
with public utility services.

REPRESENTATIVES
Chairman
Manuel Montero

BOARD OF DIRECTORS
Chairman
Andrés Regué

Directors
Francisco García
Fernando Urbina
José Martinez

Deputy Directors
Marcelo Llévenes
Lucía Piedrahíta
José Inostroza
Roberto Ospina

BOARD OF DIRECTORS
Chairman
José Kindelán
(Enersis Chief Regulation Officer)

Directors
José Hidalgo
Alberto López
(Enersis Corp. Business Director)
Fernando Urbina
Emilio García
José Chueca
Reynaldo Llosa

Deputy Directors
José Álvarez-García
Narciso López de Cervantes
Marciano Izquierdo
Walter Piazza
Fernando Font
Antonio Sabater

6
6

/
/

6
6

8
8

/
/

Enersis S.A. and Subsidiaries
Audited Consolidated Financial Statements

For the years then ended December 31, 2000 and 2001

INDEX TO THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS

Accounts Inspector’s Report

Report of Independent Accountants

Consolidated Balance Sheets as of December 31, 2000 and 2001

Consolidated Statements of Income for the years ended December 31, 2000 and 2001

Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 2000 and 2001

Consolidated Statements of Cash Flows for the years ended December 31, 2000 and 2001

Notes to the Consolidated Financial Statements

Enersis S.A. and Subsidiaries Relevant Facts

Consolidated Management Analysis

180

186

Application of Constant Chilean Pesos

The consolidated ﬁ nancial statements included herein have been restated for general price-level changes and expressed

in constant Chilean pesos of December 31, 2001 purchasing power.

Accounts Inspector’s Report

Pursuant to the provisions in law No. 18,046 on Limited Liability Stock Companies and in compliance with the mandate
granted by the Ordinary Shareholders’ Meeting held on April 02, 2001, we have examined the Consolidated Financial
Statements of Enersis S.A. for period between January 1 and December 31, 2001.

Our assignment was focused on verifying, on a selecyive basis, the coincidence of the ﬁ gures presented in the Financial
Statements with the ofﬁ cial records of the Company and its subsidiaries and to such and end we compared the ﬁ gures
presented in the ledger with the grouping and classiﬁ caton worksheets. To subsequently ascertain if these amounts
which are the balances of accounts of the same nature match with those included in the Financial Statements, a revision
which entailed no objections.

Marcela Araya
Accounts Inspector

Marco Acevedo
Accounts Inspector

Santiago, February 26, 2002

Report of Independent Accountants

(Translation of a report originally issued in Spanish – See Note 2 to the consolidated ﬁ nancial statements)

To the Shareholders of Enersis S.A.:

We have audited the accompanying consolidated balance sheets of Enersis S.A. and Subsidiaries (the “Company”) as of
December 31, 2000 and 2001, and the related consolidated statements of income, shareholders’ equity and cash ﬂ ows for
the years then ended. These ﬁ nancial statements are the responsibility of the Company’s management. Our responsibility
is to express an opinion on these ﬁ nancial statements based on our audits. We did not audit the ﬁ nancial statements of
the subsidiary Endesa – Chile S.A., which statements reﬂ ect total assets and total revenues of 30 percent and 18 percent
in 2000, and 30 percent and 23 percent in 2001, respectively, of the related consolidated totals. Those statements were
audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts
included for those entities, is based solely on the report of the other auditors.

We conducted our audits in accordance with generally accepted auditing standards in Chile. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the ﬁ nancial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in
the ﬁ nancial statements. An audit also includes assessing the accounting principles used and signiﬁ cant estimates made
by management, as well as evaluating the overall ﬁ nancial statement presentation. We believe that our audits and the
report of other auditors provide a reasonable basis for our opinion.

In our opinion, based on our audits and the report of other auditors, the ﬁ nancial statements referred to above present
fairly, in all material respects, the ﬁ nancial position of Enersis S.A. and Subsidiaries as of December 31, 2000 and 2001, and
the results of its operations and its cash ﬂ ows for the years then ended in conformity with generally accepted accounting
principles in Chile.

As described in Notes 5 and 33 to these ﬁ nancial statements, the Company’s subsidiaries in Brazil (Companhia de
Electricidad do Rio de Janeiro and Companhia Energética do Ceará) have recognized in operating revenues ThCh$
94,486,197 related to regulated assets, in accordance with the regulations for such entities in Brazil. Similarly, amounts
corresponding to unregulated energy contracted by generators and which will be transferred to the distribution companies
is still pending from the Brazilian regulators and therefore has not been recorded in these ﬁ nancial statements.

As described in Notes 23 and 33 to these ﬁ nancial statements, the Company has valued investments in Argentina in
accordance with Technical Bulletin Nº 64 issued by the Chilean Association of Accountants. On a consolidated basis, these
investments reﬂ ect total assets of 14 percent, total revenues of 27 percent, and total operating income of 21 percent,
of the related consolidated totals. Due to the unstable political and economic situation in Argentina and considering
the effects of the Public Emergency Law, the Company’s subsidiaries and equity method investments, are exposed to
conditions which could affect the valuation of their assets, liabilities and equity and generate uncertainty as to their ability
to pay obligations and continue operations. These ﬁ nancial statements have been prepared assuming that the Company’s
Argentine subsidiaries and equity method investments will continue as a going concern and do not reﬂ ect the effects or
eventual adjustments that may result from the resolution of these uncertainties.

Cristián Bastián E.

Santiago (Chile)
February 26, 2002

ARTHUR ANDERSEN – LANGTON CLARKE

7
7

0
0

/
/

Audited Consolidated Balance Sheets

Translation of ﬁ nancial statements originally issued in Spanish – See Note 2

(Restated for general price-level changes and expressed in thousands of constant Chilean pesos as of December 31, 2001 and thousands of US dollars)

Assets

Current assets:
Cash
Time deposits
Marketable securities
Accounts receivable, net
Notes receivable, net
Other accounts receivable, net
Amounts due from related companies
Inventories
Income taxes recoverable
Deferred income taxes
Prepaid expenses
Other current assets

2000
ThCh$

As of December 31,
2001
ThCh$

2001
ThUS$

27,255,582
77,376,402
11,952,705
474,887,215
9,507,985
60,224,647
19,499,217
73,136,451
69,488,255
29,669,579
9,466,878
134,183,417

36,552,229
172,925,470
197,157
534,222,322
11,668,161
63,966,838
17,494,736
75,169,004
55,835,050
23,458,350
13,564,628
123,535,175

55,823
264,093
301
815,867
17,820
97,691
26,718
114,799
85,272
35,826
20,716
188,663

Total current assets

996,648,333

1,128,589,120

1,723,589

Property, plant and equipment, net

8,684,284,279

9,344,708,408

14,271,306

Other assets:
Investments in related companies
Investments in other companies
Long-term receivables
Goodwill, net
Negative goodwill, net
Amounts due from related companies
Intangibles
Accumulated amortization
Other assets

Total other assets

Total assets

153,335,178
131,266,459
46,112,705
1,303,289,960
(195,797,288)
143,935,368
58,365,570
(14,433,888)
105,958,142

162,570,882
145,204,851
98,935,497
1,277,127,438
(172,624,494)
165,696,885
69,608,816
(24,415,601)
192,752,871

248,279
221,758
1,950,439
(263,633)
151,095
253,053
106,307
(37,288)
294,374

1,732,032,206

1,914,857,145

2,924,384

11,412,964,818

12,388,154,673

18,919,279

The accompanying notes are an integral part of these consolidated ﬁ nancial statements.

Liabilities and Shareholders’ equity

Current liabilities:
Short-term debt due to banks
and ﬁ nancial institutions
Current portion of long-term debt due to banks
and ﬁ nancial institutions
Promissory notes
Current portion of bonds payable
Current portion of long-term notes payable
Dividends payable
Accounts payable
Short-term notes payable
Miscellaneous payables
Amounts payable to related companies
Accrued expenses
Withholdings
Income taxes payable
Deferred income

2000
ThCh$

As of December 31,
2001
ThCh$

2001
ThUS$

476,274,742

292,242,781

446,315

210,166,385
16,635,381
90,659,808
29,285,626
5,741,741
248,240,493
14,270,216
30,856,634
32,044,865
71,421,590
65,579,479
115,542,094
10,674,974

408,657,469
53,039,076
61,017,788
31,215,082
6,804,807
251,412,913
44,105,893
46,219,728
30,214,222
77,592,552
52,386,012
75,032,060
10,985,014

624,105
81,002
93,187
47,672
10,392
383,960
67,359
70,587
46,143
118,500
80,004
114,590
16,776

Total current liabilities

1,583,569,157

1,591,556,680

2,430,637

Long-term liabilities:
Due to banks and ﬁ nancial institutions
Bonds payable
Long-term notes payables
Accounts payable
Amounts payable to related companies
Accrued expenses
Deferred income taxes
Other long-term liabilities

1,643,588,297
1,925,426,454
228,486,812
28,126,666
1,050,737,624
122,772,387
19,990,376
53,485,493

1,896,800,333
2,225,321,561
227,152,092
33,734,901
972,531,222
227,562,076
35,009,674
44,376,320

2,896,807
3,398,527
346,908
51,520
1,485,257
347,534
53,467
67,773

Total long-term liabilities

5,072,614,109

5,662,488,179

8,647,793

Minority interest

3,622,062,715

3,954,923,425

6,039,988

Committments and contingencies
Shareholders’ equity:
Paid-in capital, no par value
Additional paid-in capital – share premium
Other reserves
Retained earnings
Net income for the year

729,328,347
32,398,114
7,491,989
272,625,237
92,875,150

729,328,347
32,398,114
26,384,539
350,149,143
40,926,246

1,113,835
49,479
40,295
534,750
62,503

Total shareholders’ equity

1,134,718,837

1,179,186,389

1,800,862

Total liabilities and shareholders’ equity

11,412,964,818

12,388,154,673

18,919,279

The accompanying notes are an integral part of these consolidated ﬁ nancial statements.

7
7

2
2

/
/

Audited Consolidated Statements of Income

Translation of ﬁ nancial statements originally issued in Spanish – See Note 2

(Restated for general price-level changes and expressed in thousands of constant Chilean pesos as of December 31, 2001 and thousands of US dollars)

Operating income:
Sales
Cost of sales
Gross proﬁ t
Administrative and selling expenses

Years ended December 31,
2001
ThCh$

2001
ThUS$

2000
ThCh$

2,676,744,755
(1,839,839,861)
836,904,894
(300,254,777)

2,970,272,584
(1,966,322,400)
1,003,950,184
(271,383,420)

4,536,222
(3,002,982)
1,533,240
(414,459)

Operating income

536,650,117

732,566,764

1,118,781

Non-operating income and expense:
Interest income
Equity participation in income of related companies
Other non-operating income
Equity participation in losses of related companies
Amortization of goodwill
Interest expense
Other non-operating expenses
Price-level restatement, net
Foreign currency translation, net

72,001,799
4,414,996
450,001,303
(4,340,479)
(69,625,055)
(485,479,435)
(115,427,232)
(14,807,760)
(1,215,264)

54,944,497
3,523,584
190,906,981
(13,910,766)
(77,988,545)
(436,089,073)
(177,032,205)
2,111,724
(29,962,583)

83,912
5,381
291,555
(21,245)
(119,105)
(665,998)
(270,365)
3,225
(45,759)

Non-operating expense, net

(164,477,127)

(483,496,386)

(738,399)

Income before income taxes, minority interest
and amortization of negative goodwill
Less: Income taxes
Income before minority interest and amortization
of negative goodwill
Minority interest
Income before amortization of negative goodwill
Amortization of negative goodwill

372,172,990
(142,061,655)

249,070,378
(132,706,349)

380,382
(202,670)

230,111,335
(178,640,998)
51,470,337
41,404,813

116,364,029
(121,507,397)
(5,143,368)
46,069,614

177,712
(185,567)
(7,855)
70,358

Net income for the year

92,875,150

40,926,246

62,503

The accompanying notes are an integral part of these consolidated ﬁ nancial statements.

Audited Consolidated Statements
of Changes in Shareholders’ Equity

Translation of ﬁ nancial statements originally issued in Spanish – See Note 2

(Expressed in thousands of historical Chilean pesos, except as stated)

Additional

Net income

Number

Paid-in

paid-in

Other

Retained

(loss) for

of shares

capital

(in thousands)

ThCh$

capital

ThCh$

reserves

earnings

the year

ThCh$

Total

ThCh$

6,800,000

398,624,586

24,184,786

23,295,280

330,716,485

(78,158,729) 698,662,408

As of January 1, 2000

Transfer of prior year

loss to retained earnings

Price-level restatement of capital

Changes in equity of afﬁ liates

Cumulative translation adjustment

(78,158,729)

78,158,729

22,015,443

1,203,739

1,094,879

11,870,214

(18,382,462)

1,259,024

36,184,275

(18,382,462)

1,259,024

292,794,395

90,082,590

Issuance of shares

1,491,020

286,758,950

6,035,445

Net income for the year

As of December 31, 2000

8,291,020

707,398,979

31,423,970

7,266,721

264,427,970

90,082,590 1,100,600,230

As of December 31, 2000 (1)

8,291,020

729,328,347

32,398,114

7,491,989

272,625,237

92,875,150 1,134,718,837

As of January 1, 2001

8,291,020

707,398,979

31,423,970

7,266,721

264,427,970

90,082,590 1,100,600,230

Transfer of prior year income

to retained earnings

Dividends

Price-level restatement of capital

Cumulative translation adjustment

Net income for the year

(14,976,824)

90,082,590

(90,082,590)

21,929,368

974,144

225,268

10,615,407

18,892,550

(14,976,824)

33,744,187

18,892,550

40,926,246

As of December 31, 2001

8,291,020

729,328,347

32,398,114 26,384,539

350,149,143

40,926,246 1,179,186,389

(1) Restated in thousands of constant Chilean pesos as of December 31, 2001.

7
7

4
4

/
/

Audited Statement of Consolidated Cash Flows

Translation of ﬁ nancial statements originally issued in Spanish – See Note 2

(Restated for general price-level changes and expressed in thousands of constant Chilean pesos as of December 31, 2001, and thousands of US dollars)

Years ended December 31,
2001
ThCh$

2001
ThUS$

2000
ThCh$

Cash ﬂ ows from operating activities:
Net income for the year
Gain (losses) from sales of assets:
Gain on sales of property, plant and equipment
Gain on sale of investments

92,875,150

40,926,246

62,503

(61,064,928)
(202,046,395)

(5,567,418)
-

(8,503)
-

Charges (credits) to income which do not represent cash ﬂ ows:
Depreciation
Amortization of intangibles
Write-offs and accrued expenses
Equity participation in income of related companies
Equity participation in losses of related companies
Amortization of goodwill
Amortization of negative goodwill
Price-level restatement, net
Foreign currency translation, net
Other credits to income which do not represent cash ﬂ ows
Other charges to income which do not represent cash ﬂ ows

388,953,861
33,080,473
91,397,809
(4,414,996)
4,340,479
69,625,055
(41,404,813)
14,807,760
1,215,264
(48,132,142)
110,037,719

413,612,079
8,678,208
80,871,961
(3,523,584)
13,910,766
77,988,545
(46,069,614)
(2,111,724)
29,962,583
(106,474,373)
82,984,300

631,671
13,253
123,508
(5,381)
21,245
119,105
(70,358)
(3,225)
45,759
(162,608)
126,734

Changes in assets which affect cash ﬂ ows:
Decrease (increase) in trade receivables
Decrease in inventory
Decrease (increase) in other assets

(106,207,841)
22,432,568
(51,806,718)

116,467,244
1,176,106
23,717,139

177,870
1,796
36,221

Changes in liabilities which affect cash ﬂ ows:
Decrease in accounts payable associated with operating results
Increase in interest payable
Increase (decrease) in income tax payable
Decrease in other accounts payable associated with
non-operating results
Net decrease in value added tax and other similar taxes payable
Income attributable to minority interest

(2,662,939)
97,040,399
11,139,307

(73,222,347)
(1,622,900)
178,640,998

(60,374,730)
14,669,615
(52,498,394)

7,961,412
(114,201,522)
121,507,397

(92,205)
22,404
(80,176)

12,159
(174,409)
185,567

Net cash ﬂ ows provided by operating activities

523,000,823

643,612,242

982,930

Cash ﬂ ows from ﬁ nancing activities:
Issuance of shares
Proceeds from the issuance of debt
Proceeds from bond issuances
Other sources of ﬁ nancing
Dividends paid
Payment of debt
Payment of bonds
Payment of loans obtained from related companies
Payment of bond issuance costs
Payment of other loans from related companies
Other disbursements for ﬁ nancing

Years ended December 31,
2001
ThCh$

2001
ThUS$

2000
ThCh$

305,169,385
1,553,604,420
51,007,966
43,556,446
(145,933,415)
(2,061,623,319)
(204,237,868)
(81,388,242)
-
(71,874,189)
(178,854,087)

-
1,880,485,153
272,208,589
29,450,901
(140,259,670)
(1,815,594,628)
(154,631,146)
(97,961,304)
(967,133)
-
(32,356,128)

-
2,871,890
415,719
44,978
(214,206)
(2,772,789)
(236,154)
(149,607)
(1,477)
-
(49,415)

Net cash used in ﬁ nancing activities

(790,572,903)

(59,625,366)

(91,061)

Cash ﬂ ows from investing activities:
Proceeds from sales of property, plant and equipment
Sale of investment in related companies
Proceeds from loans obtained from related parties
Other loans received from related companies
Other receipts from investments
Additions to property, plant and equipment
Long-term investments
Investment in ﬁ nancial instruments
Other loans granted to related companies
Other investment disbursements

136,145,406
503,776,350
3,743,364
15,879
208,465,508
(333,018,938)
(313,721,205)
(1,844,601)
-
(32,089,850)

19,142,442
-
5,365,011
-
13,277,523
(331,605,569)
(12,504,600)
-
(226,811)
(182,418,471)

29,234
-
8,193
-
20,278
(506,430)
(19,097)
-
(346)
(278,591)

Net cash provided by (used) in investing activities

171,471,913

(488,970,475)

(746,759)

Positive (negative) net cash ﬂ ow for the year
Effect of price-level restatement on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents beginning of year

(96,100,167)
3,995,572
(92,104,595)
208,644,113

95,016,401
(72,811)
94,943,590
116,539,518

145,110
(111)
144,999
177,980

Cash and cash equivalents end of year

116,539,518

211,483,108

322,979

7
7

6
6

/
/

Notes to the Audited Consolidated
Financial Statements

Translation of ﬁ nancial statements originally issued in Spanish – See Note 2

(Restated for general price-level changes and expressed in thousands of constant Chilean pesos as of December 31, 2001, except as stated)

Note 1

Description of Business:

Enersis S.A. (the “Company”) is registered in the Securities Register under No. 0175 and is regulated by the Chilean

Superintendency of Securities and Insurance (the “SVS”). The Company issued publicly registered American Depositary Receipts

in 1993 and 1996. Enersis S.A. is a reporting company under the United States Securities and Exchange Act of 1934.

The Company’s subsidiaries, Chilectra S.A., Compañía Eléctrica del Río Maipo S.A. (Río Maipo S.A.), Empresa Nacional de

Electricidad S.A. (Endesa S.A.) and Aguas Cordillera S.A. are registered in the Securities Register under No.’s 0321, 0345, 0114,

and 0369 respectively.

Note 2

Summary of Signiﬁ cant Accounting Policies:

(a) General:

The consolidated ﬁ nancial statements of the Company have been prepared in accordance with generally accepted

accounting principles in Chile and the regulations established by the SVS (collectively “Chilean GAAP”), and the speciﬁ c

corporate regulations of Law No. 18.046, related to the formation, registration and liquidation of Chilean corporations,

among others. Certain amounts in the prior years’ ﬁ nancial statements have been reclassiﬁ ed to conform to the current

year’s presentation.

The preparation of ﬁ nancial statements in conformity with Chilean GAAP, requires management to make estimates and

assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities as of

the date of the ﬁ nancial statements, and the reported amounts of revenues and expenses during the reporting period.

Actual results could differ from those estimates.

The accompanying ﬁ nancial statements reﬂ ect the consolidated results of operations of Enersis S.A. and its subsidiaries.

All signiﬁ cant intercompany transactions have been eliminated in consolidation. Investments in companies in the

development stage are accounted for using the equity method, except that income or losses are included directly in

equity instead of being reﬂ ected in the Company’s consolidated statement of income. The Company consolidates the

ﬁ nancial statements of companies in which it controls over 50% of the voting shares, which are the following:

Company name

Chilectra S.A.
Compañía Eléctrica del Río Maipo S.A.
Synapsis Soluciones y Servicios IT Ltda.
Inmobiliaria Manso de Velasco Ltda.
Cía. Americana de Multiservicios Ltda.
Endesa Chile S.A. (1)
Enersis de Argentina S.A.
Enersis International Ltd.
Inversiones Distrilima S.A.
Empresa Distribuidora Sur S.A. (Edesur)
Empresa Eléctrica de Panamá S.A.
Enersis Investment S.A.
Interocean Developments Inc.
Luz de Bogotá S.A. (2)
Cerj (2)
Investluz (2)
Cía. Americana de Multiservicios Uno Ltda.
Electric investment
Enersis Energia de Colombia S.A.

Percentage participation as of December 31,

2000
Total

97.97
98.40
99.99
100.00
100.00
59.98
100.00
100.00
53.93
64.29
99.61
100.00
100.00
44.21
57.38
46.50
100.00
100.00
100.00

Direct

98.24
98.74
99.99
99.99
99.93
59.98
99.99
100.00
14.79
16.02
81.00
-
100.00
25.71
8.00
-
99.99
-
100.00

2001
Indirect

-
-
0.01
0.00
0.07
-
0.00
-
39.75
49.07
18.67
-
-
18.95
50.16
47.02
0.01
-
-

Total

98.24
98.74
99.99
100.00
100.00
59.98
100.00
100.00
54.54
65.09
99.67
-
100.00
44.66
58.16
47.02
100.00
-
100.00

(1) Includes certain majority owned companies not presented herein.

(2) The Company obtained shareholder agreements dated June 25, 1999, from Endesa International, the majority shareholder of

these companies, giving the Company the right to elect a majority of the Board of Directors. The Superintendency of Securities
and Insurance were notiﬁ ed on June 28, 1999.

(b) Periods covered:

These ﬁ nancial statements reﬂ ect the Company’s ﬁ nancial positions as of December 31, 2000 and 2001, and the results

of its operations, the changes in its shareholders’ equity and its cash ﬂ ows for the years ended December 31, 2000

and 2001.

The cumulative inﬂ ation rate in Chile as measured by the Chilean Consumer Price Index (“CPI”) for the three-year period

ended December 31, 2001 was approximately 10.66%.

Chilean GAAP requires that the ﬁ nancial statements be restated to reﬂ ect the full effects of loss in the purchasing power

of the Chilean peso on the ﬁ nancial position and results of operations of reporting entities. The method described

below is based on a model that enables calculation of net inﬂ ation gains or losses caused by monetary assets and

liabilities exposed to changes in the purchasing power of local currency. The model prescribes that the historical cost

of all non-monetary accounts be restated for general price-level changes between the date of origin of each item and

the year-end.

The ﬁ nancial statements of the Company have been price-level restated in order to reﬂ ect the effects of the changes

in the purchasing power of the Chilean currency during each year. All non-monetary assets and liabilities, all equity

accounts and income statement accounts have been restated to reﬂ ect the changes in the CPI from the date they were

acquired or incurred to year-end (see also Note 24).

7
7

8
8

/
/

The purchasing power gain or loss included in net income reﬂ ects the effects of Chilean inﬂ ation on the monetary assets

and liabilities held by the Company.

The restatements were calculated using the ofﬁ cial consumer price index of the National Institute of Statistics and based

on the “prior month rule,” in which the inﬂ ation adjustments are based on the CPI at the close of the month preceding

the close of the respective period or transaction. This index is considered by the business community, the accounting

profession and the Chilean government to be the index that most closely complies with the technical requirement to

reﬂ ect the variation in the general level of prices in Chile, and consequently it is widely used for ﬁ nancial reporting

purposes.

The values of the Chilean consumer price indices used to reﬂ ect the effects of the changes in the purchasing power of

the Chilean peso (“price-level restatement”) are as follows:

November 30, 2000
November 30, 2001

Index

106.82
110.10

Change over
Previous
November 30,

4.7%
3.1%

By way of comparison, the actual values of the Chilean consumer price indices as of the balance sheet dates are

as follows:

December 31, 2000
December 31, 2001

Index

106.94
109.76

Change over
previous
December 31,

4.5%
2.6%

The above-mentioned price-level restatements do not purport to represent appraisal or replacement values and are only

intended to restate all non-monetary ﬁ nancial statement components in terms of local currency of a single purchasing

power and to include in net income or loss for each year the gain or loss in purchasing power arising from the holding

of monetary assets and liabilities exposed to the effects of inﬂ ation.

Index-linked assets and liabilities

Assets and liabilities that are denominated in index-linked units of account are stated at the year-end values of the

respective units of account. The principal index-linked unit used in Chile is the Unidad de Fomento (“UF”), which is

adjusted daily to reﬂ ect the changes in Chile’s CPI. Certain of the Company’s investments are linked to the UF. As the

Company’s indexed liabilities exceed its indexed assets, the increase in the index results in a net loss on indexation.

Values for the UF are as follows (historical Chilean pesos per UF):

December 31, 2000
December 31, 2001

Ch$

15,769.92
16,262.66

Comparative ﬁ nancial statements

For comparative purposes, the historical December 31, 2000 and 2001 consolidated ﬁ nancial statements and their

accompanying notes have been presented in constant Chilean pesos as of December 31, 2001. Amounts previously

presented in constant Chilean pesos as of each balance sheet date have been adjusted by the percentage changes in

the CPI to December 31, 2001, as follows:

Period

2000

Change in Index

3.1% (1)

(1) Equivalent to the amounts for 2000 multiplied by the change in the CPI for 2001.

This updating does not change the prior periods’ statements or information in any way except to update the amounts

to constant Chilean pesos of similar purchasing power.

Convenience translation to U.S. dollars

The ﬁ nancial statements are stated in Chilean pesos. The translations of Chilean pesos into US dollars are included

solely for the convenience of the reader, using the observed exchange rate reported by the Chilean Central Bank as of

December 31, 2001 of Ch$ 654.79 to US$ 1.00. The convenience translations should not be construed as representations

that the Chilean peso amounts have been, could have been, or could in the future be, converted into US dollars at this

or any other rate of exchange.

(d) Assets and liabilities in foreign currencies:

Assets and liabilities denominated in foreign currencies are detailed in Note 31. These amounts have been stated at the

observed exchange rates reported by the Central Bank of Chile as of each year-end as follows:

8
8

0
0

/
/

Currency

Symbol used

United States dollar (Observed)
British pound sterling
Colombian peso
New Peruvian sol
Brazilian real
Italian lira (2)
Japanese yen
Euro
French Franc (2)
Pool Unit (IBRD)(1)
Unidad de Fomento (UF)
Unit of Account (IBD)(1)
Argentine peso (3)

US$
£
$ Col
Soles
Rs
Lira
¥
_
FFr
UP
UF
UC
$ Arg

2000
Ch$

573.65
856.58
0.26
162.69
294.33
0.28
5.01
538.84
82.15
7,230,629.88
15,769.92
850.92
573.65

2001
Ch$

654.79
948.01
0.29
190.29
282.97
0.30
4.99
578.18
88.36
7,742,160.26
16,262.66
929.26
654.79

(1) Units of measurement used by the International Bank for Reconstruction and Development (IBRD) and Interamerican Development
Bank (IDB) to express the weighted-average of multicurrency loan obligations granted using ﬁ xed currency ratios to the US
dollar, at a determined date.

(2) Beginning on January 1, 2002, these currencies will be expressed in the Euro.
(3) During the years ended December 31, 2000 and 2001, the Argentine peso has been pegged to the US dollar at a rate of 1 Argentine
peso to 1 US dollar. In early December 2001, restrictions were put in place that prohibited cash withdrawals above a certain
amount and foreign money transfers, with certain limited exceptions. While the legal exchange rate remained at 1 peso to 1 US
dollar, ﬁ nancial institutions were allowed to conduct only limited activity due to these controls, and currency exchange activity
was effectively halted except for personal transactions in small amounts. In January 2002, the Argentine government announced
its intent to create a dual currency system with a “ofﬁ cial” ﬁ xed exchange rate of 1.4 pesos to 1 US dollar for import, and export
transactions and a “free” ﬂ oating exchange rate for other transactions. On January 11, 2002, the exchange rate market holiday
ended and closing new “free” ﬂ oating exchange rates ranged from 1.6 to 1.7 pesos to 1 US dollar. In accordance with SVS Circular
No. 81 the conversion of Argentine subsidiary ﬁ nancial statements reﬂ ect the conversion of 1.7 pesos to 1 US dollar.

(e) Time deposits and Marketable securities

Time deposits are presented at cost plus accrued interest and UF indexation adjustments, as applicable. Marketable

securities consist of short-term highly liquid Chilean Government debt securities valued at cost plus accrued interest,

which approximates market value.

(f) Allowance for doubtful accounts:

Accounts receivable is classiﬁ ed as current or long-term, depending on their collections terms. Current and long-term

trade accounts receivable, notes receivable and other receivables are presented net of allowances for doubtful accounts

(see Note 5). Write-offs of uncollectible accounts amounted to ThCh$ 10,291,653 and ThCh$ 6,155,429 for the years

ended December 31, 2000 and 2001, respectively.

(g)

Inventories:

Inventory of materials in transit and operation and maintenance materials, are valued at the lower of price-level restated

cost or net realizable value. The cost of real estate projects under development, included in inventory, include the cost

of land, demolition, urbanizing, payments to contractors and other direct costs.

The costs and revenues of construction in progress are accounted for under the completed contract method in accordance

with Technical Bulletin No. 39 of the Chilean Association of Accountants and are included in current assets as their

completion is expected in the short-term.

(h) Property, plant and equipment:

Property, plant and equipment were previously valued at net replacement cost as determined by the former Superintendcy

of Electric and Gas Services (SEG) adjusted for price-level restatement in accordance with D.F.L. No. 4 of 1959 until

1980.

Property, plant and equipment are currently shown at contributed amounts or cost, as appropriate, plus price-level

restatement. The interest cost on debt directly obtained in the construction projects is capitalized during the period

of construction.

In 1986, an increase based upon a technical appraisal of property, plant and equipment was recorded in the manner

authorized by the SVS in Circulars No.’s 550 and 566 dated October 15 and December 16, 1985, respectively, and

Communication No. 4790, dated December 11, 1985.

Property, plant and equipment received in leasing which qualify as capital leases, are accounted as acquisitions, recording

the total of the lease obligation and interest on an accrual basis.

(i) Depreciation

Depreciation expense is calculated on the revalued balances using the straight-line method over the estimated useful lives

of the assets. Depreciation expense was ThCh$ 388,953,861 and ThCh$ 413,612,079 as of December 31, 2000 and 2001,

respectively. Depreciation expense of ThCh$ 375,916,142 and ThCh$ 401,771,524 were included in Costs of sales and

ThCh$ 13,037,719 and ThCh$ 11,840,555 were included in Administrative and selling expenses, respectively.

(j)

Power installations ﬁ nanced by third parties:

As established by D.F.L. 1 of the Ministry of Mines dated September 13, 1982, power installations ﬁ nanced by third parties

are treated as reimbursable contributions. As such, the installations constructed using this mechanism form part of the

Company’s plant and equipment.

Such installations made prior to D.F.L. 1 are deducted from Plant and equipment and their depreciation is charged to

Power installations ﬁ nanced by third parties.

(k)

Investments in related companies:

Investments in related companies are included in “Other assets” using the equity method. This valuation method

recognizes in income the Company’s equity in the net income or loss of each investee on the accrual basis (Note 11).

Investments in foreign afﬁ liates are recorded in accordance with Technical Bulletin No.64 of the Chilean Association

of Accountants.

(l)

Intangibles, other than goodwill:

Intangibles, other than goodwill, correspond mainly to easements, parent company contributions, and rights for the use

of telephone lines and are amortized over 20 to 40 years in accordance with Technical Bulletin No.55 of the Chilean

Association of Accountants.

8
8

2
2

/
/

(m) Severance indemnity:

The severance indemnity that the Company is obliged to pay to its employees under collective bargaining agreements is

stated at the present value of the beneﬁ t under the vested cost method, discounted at 9.5% and assuming an average

employment span which varies based upon years of service with the Company.

(n) Revenue recognition:

Energy supplied and unbilled at each year-end is valued at the selling price using the current rates and has been included

in revenue from operations. The unbilled amount is presented in current assets as trade receivables and the corresponding

cost is included in cost of operations. The Company also recognizes revenues for amounts received from highway tolls

for motorized vehicles.

(o)

Income tax and deferred income taxes:

The Company records income taxes in accordance with Technical Bulletin No. 60 of the Chilean Association of Accountants,

and with circular No. 1466 issued on January 27, 2000 by the SVS, recognizing, using the liability method, the deferred tax

effects of temporary differences between the ﬁ nancial and tax values of assets and liabilities. As a transitional provision,

a contra asset or liability has been recorded offsetting the effects of the deferred tax assets and liabilities not recorded

prior to January 1, 2000. Such contra asset or liability must be amortized to income over the estimated average reversal

periods corresponding to the underlying temporary differences to which the deferred tax asset or liability relates calculated

using the tax rates to be in effect at the time of reversal. For the years ended

December 31, 2000 and 2001, the Company recorded current tax expense according to the tax laws and regulations

within each country of ThCh$ 155,527,993 and ThCh$ 124,813,922, respectively.

(p) Accrued vacation expense:

In accordance with Technical Bulletin No.47 issued by the Chilean Association of Accountants, employee vacation expenses

are recorded on the accrual basis.

(q) Reverse repurchase agreements:

Reverse repurchase agreements are included in “Other current assets” and are stated at cost plus interest and indexation

accrued at year-end, in conformity with the related contracts.

(r) Statements of cash ﬂ ows:

The Consolidated Statements of Cash Flows have been prepared in accordance with the indirect method.

Investments considered as cash equivalents, as indicated in point 6.2 of Technical Bulletin No. 50 issued by the Chilean

Association of Accountants, include time deposits, investments in ﬁ xed income securities classiﬁ ed as marketable securities,

repurchase agreements classiﬁ ed as other current assets, and other balances classiﬁ ed as other accounts receivable with

maturities less than 90 days.

For classiﬁ cation purposes, cash ﬂ ows from operations include collections from clients and payments to suppliers, payroll

and taxes.

(s) Financial derivative contracts:

As of December 31, 2000 and 2001 the Company has forward contracts, currency swaps, and interest swaps and colars

with various ﬁ nancial institutions, which are recorded according to Technical Bulletin No. 57 of the Chilean Association

of Accountants.

(t) Goodwill and negative goodwill:

Goodwill and negative goodwill are determined according to Circular No. 368 of the SVS. Amortization is determined

using the straight-line method, considering the nature and characteristic of each investment, foreseeable life of the

business and investment return, and does not exceed 20 years.

(u) Pension and post-retirement beneftis:

Pension and post-retirement beneﬁ ts are recorded in accordance with the respective Collective Bargaining Contracts of

the employees based on the actuarially determined projected beneﬁ t obligation.

(v) Bonds:

Bonds payable are recorded at the face value of the bonds. The difference between the face value and the placement

value, equal to the premium or discount, is deferred and amortized over the term of the bonds.

(w) Reclassiﬁ cations:

Certain amounts in the prior years’ ﬁ nancial statements have been reclassiﬁ ed in order to conform to the current year’s

method of presentation.

(x)

Investments in other companies

The invesments in other companies is presented at acquisition cost adjusted for pricel-level restatement.

(y) Research and development costs

Costs incurred in research and development by the Company are either general in nature (water-level studies, hydroelectric

research, seismic-activity surveys) which are expensed as incurred, or studies related to speciﬁ c construction projects

Note 3

which are capitalized.

Change in Accounting Principles:

There where no changes in accounting principles during the current year that would effect the comparison with the prior year’s

ﬁ nancial statements.

8
8

4
4

/
/

Note 4

Time deposits:

Time deposits as of each year-end are as follows:

Financial Institution

ABN Amro Bank
Banco Alfa
Banco Bilbao Vizcaya
Banco Boston
Banco Boston
Banco CCF Brasil
Banco CCF-Comodities
Banco Chile New York
Banco Chile New York
Banco Colpatria
Banco Crédito del Perú
Banco de Bogotá
Banco de Chile
Banco de Credito del Perú
Banco de Credito del Perú
Banco do Estado do Ceara
Banco Galicia
Banco Ganadero
Banco Interbank
Banco Itau
Banco Liberal
Banco Nationale de Paris
Banco Rio de la Plata
Banco Santander
Banco Santander CDB
Banco Santender Do Brasil
Banco Sudameris
Banco Tequendama
Banco Union Colombiano
Banco Wiese Sudameris
Bank of America
Bonos de Solidaridad
Bradesco
Caja Ahorro en Dólares
Caja Ahorro en Pesos
Chase Manhattan Bank
Citibank New York
Citiliquid Reserves - NY
Colcorp S.A.
Corﬁ valle
Corporacion las villas
Remunerada
Fiduciaria Banco Colpatria
Fiduciaria Banco de Bogotá
Fiduciaria Cancolombia
Fiduciaria Cititrust
Fiduciaria de Crédito
Fiduciaria de Santander
Fiduciaria Lloyds Bank
Fiducolombia
Fiducrédito
Fiduganadero
Fiduoccidente
HSBC - Bamerindus
Megabanco
Time Deposit

Total

Annual
Rate
%

Scheduled
Maturity

As of December 31,

2000
ThCh$

2001
ThCh$

-
-
1.80
1.10
1.40
1.38
0.00
2.15
1.25
12.30
1.50
12.00
0.02
2.25
1.50
14.92
0.00
13.92
3.00
0.00
1.38
1.67
12.80
1.39
11.75
19.00
12.00
12.30
12.30
3.25
1.55
10.00
13.11
0.00
0.00
0.00
0.69
0.00
12.20
12.00
12.50
3.25
11.32
12.24
11.43
10.53
11.15
10.91
10.94
13.15
0.00
11.70
12.03
1.41
2.00
1.21

-
-
Feb 28, 2002
Jan 2, 2002
Jan 31, 2002
Jan 31, 2002
-
Jan 2, 2002
Jan 2, 2002
Feb 1, 2002
Jan 2, 2002
Feb 28, 2002
Jan 2, 2002
Jan 2, 2002
Jan 2, 2002
Jan 2, 2002
-
Jan 2, 2002
Jan 2, 2002
-
Jan 31, 2002
Jan 3, 2002
Jan 2, 2002
Jan 31, 2002
Feb 2, 2002
Feb 18, 2002
Feb 1, 2002
Feb 2, 2002
Jan 2, 2002
Jan 3, 2002
Jan 2, 2002
Jan 2, 2002
Jan 2, 2002
-
-
-
Jan 3, 2002
-
Jan 1, 2002
Jan 1, 2002
Mar 1, 2002
Jan 2, 2002
Jan 2, 2002
Jan 2, 2002
Jan 2, 2002
Jan 2, 2002
Jan 2, 2002
Jan 2, 2002
Jan 2, 2002
Jan 2, 2002
-
Jan 2, 2002
Jan 2, 2002
Jan 31, 2002
Jan 31, 2002
Jan 2, 2002

2,066,798
617,317
2,465,685
3,197,684
1,793,070
-
684,866
-
-
3,992,979
20,694
355,671
-
-
-
985,937
2,258,091
16,631,081
-
2,905
318,099
-
6,518,480
470,601
-
-
5,810,411
703,082
-
148,369
-
-
1,357,408
773
4,894
670,685
15,692,170
3,337,446
-
2,948,422
-

-
443
451
1,044
865
83,026
-
592
92,250
131
4,082
4,139,900
-
-

-
-
28,032,671
492,066
791,845
788,954
-
482,965
2,759,402
8,402,145
1,114,899
431,810
477,436
285,524
311,090
4,815,225
-
10,795
380,250
-
468,221
12,668,715
9,546
773,530
1,027,375
883,434
3,689,513
2,851,334
2,641,692
161,606
17,042,269
655
663,467
-
-
-
52,847,915
-
1,625,167
9,526,560
3,378,917
2,669,232
18,882
6,109,593
1,390,090
40,629
288,840
22,854
50,813
121,473
-
752,007
4,922

41,064
1,008,377

77,376,402

172,925,470

Note 5

Accounts, notes and other receivables:

Current accounts, notes and other receivables and related allowances for doubtful accounts as of each December 31,

are as follows:

Account

Under 90
days
ThCh$

2000
91 days
to 1 year
ThCh$

Allowance
ThCh$

Total
ThCh$

Under 90
days
ThCh$

2001
91 days
to 1 year
ThCh$

Allowance
ThCh$

Total
ThCh$

As of December 31,

Accounts receivable
Notes receivable
Other receivables

530,315,529 60,736,066
5,023,314
10,699,093

5,329,546
50,315,604

(116,164,380)
(844,875)
(790,050)

474,887,215
9,507,985
60,224,647

559,676,985
6,112,015
41,498,773

16,801,935
6,545,612
30,519,962

(42,256,598) 534,222,322
11,668,161
63,966,838

(989,466)
(8,051,897)

Total

585,960,679

76,458,473

(117,799,305) 544,619,847 607,287,773 53,867,509

(51,297,961) 609,857,321

Long-term other receivables as of December 31, 2000 and 2001 are ThCh$ 46,112,705 and ThCh$ 98,935,497,

respectively.

Current and long-term accounts receivables per country as of each December 31, are as follows:

Country

Chile
Peru
Argentina
Colombia
Brasil (1)

Total

2000

2001

ThCh$

129,174,389
36,431,631
112,182,759
127,007,176
185,936,597

21.87
6.17
18.99
21.50
31.48

175,332,739
38,977,828
72,931,374
123,402,281
298,148,596

24.74
5.50
10.29
17.41
42.06

590,732,552

100.00

708,792,818

100.00

(1) In accordance with Decree Law No. 14 and Resolution No. 91 of the Council for Managing the Electric Energy Crisis (CGCEE), both
dated December 21, 2001, and based on Resolution No. 31 of the National Agency of Electric Energy (ANEEL) dated January 24,
2002, the Company’s distribution subsidiaries in Brasil have recongized as of December 31, 2001, a regulated asset, which will be
recovered through extraordinary tarrifs in order to recover losses experienced during the period of energy rationing from June 1,
2001 to December 31, 2001.

The regulated asset recorded by the Company’s distribution subsidiaries (Cerj and Coelce) was ThCh$ 94,486,000 as of December
31, 2001, and is recorded as revenue during 2001. This revenue represents lost revenues resulting from the Program of Emergency
Reduction of Electric Energy Consumption (Program of Rationing). This regulated asset will be recovered through the increase of
energy prices, over a period estimated to be three years. This amount is to be conﬁ rmed by ANEEL.

In order to record this asset as revenue, the Company’s subsidiaries and other companies in the Energy Sector must agree to forfeit
any future claim related to the events and regulations derived from the Program of Rationing and increases through the extraordinary
tarrif.

8
8

6
6

/
/

Note 6

Transactions with Related Companies:

Balances of accounts receivable and payable classiﬁ ed according to the nature of the transaction are as follows as of December

31, 2000 and 2001:

a. Notes and accounts receivable:

Company Name

Aguas Santiago Poniente S.A.
Atacama Finance Co.
Central Geradora Term. de Fortaleza
Cía. Interconexión Energética S.A.
Com. de Energía del Mercosur
Consorcio B & R Ingendesa Ltda.
Consorcio Energetico Punta Cana-Macao
Distrilec Inversora S.A.
Edenor S.A.
Electrogas S.A.
Elesur S.A.
Empresa Eléctrica de Bogotá S.A.
Empresa Eléctrica Piura S.A.
Endesa España
Endesa Internacional S.A.
Etevensa
Gasoducto Atacama y Cía Ltda.
Gasoducto Tal Tal Ltda.
Gesa S.A.
Inversiones Electrica Quillota S.A.
Nopel S.A.
Sacme
Smartcom S.A.
Soc. de Inv. Chispa Uno S.A.
Transmisora Eléctrica de Quillota Ltda.
Unelco S.A.

As of December 31,

Short-term

Long-term

2000
ThCh$

2001
ThCh$

2000
ThCh$

2001
ThCh$

1,973,046
5,227,247
-
8,147,965
-
78,234
968
-
977,306
1,550
27,411
27,750
34,069
-
757,232
42,568
458
715,868
242,699
-
171,851
240,044
545,160
1,535
196,560
89,696

2,423,833
4,172,183
11,051
2,917,350
3,271,536
-
939
6,612
181,667
-
19,785
130,076
97,262
353,985
2,318,129
185,033
-
304,679
-
1,000
47,790
169,949
870,156
806
10,915
-

-
142,507,800
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,427,568
-

-
164,268,594
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,428,291
-

Total

19,499,217

17,494,736

143,935,368 165,696,885

b. Notes and accounts payable:

Company Name

Aguas Santiago Poniente S.A.
Com. de Energía del Mercosur
Compañía Transmisión del Mercosur S.A.
Consorcio B & R Ingendesa Ltda.
Edenor S.A.
Electrogas S.A.
Elesur S.A.
Empresa Eléctrica de Bogotá S.A.
Empresa Eléctrica Piura S.A.
Endesa Internacional S.A.
Etevensa
Gasoducto Cuenca Noreste Ltda.
Gasoducto Tal Tal Ltda.
Mundivia S.A.
Nopel S.A.
Sacme
Smartcom S.A.
Transmisora Eléctrica de Quillota Ltda.

As of December 31,

Short-term

Long-term

2000
ThCh$

2001
ThCh$

2000
ThCh$

2001
ThCh$

-
-
-
18,054
69,755
195,971
11,711,657
14,053,669
1,193,192
483,429
957,044
262,991
-
45,064
2,721,840
273,645
18,602
39,952

8
6,966,606
329,359
-
-
-
16,785,722
3,523,412
699,585
332,678
1,084,373
-
207,378
74
-
180,391
63,336
41,300

-
-
-
-
-
-
1,033,330,967
-
-
17,406,657
-
-
-
-
-
-
-
-

-
-
-
-
-
-
956,291,278
-
-
16,239,944
-
-
-
-
-
-
-
-

Total

32,044,865

30,214,222

1,050,737,624 972,531,222

8
8

/
/

Effects in income (expense) for each year-ended December 31 are as follows:

Company

Atacama Finance Co.

Com. de Energía del Mercosur

Com. Transmisión del Mercosur S.A.
Cía. Interconexión Energética S.A.

Inv. Eléctr.Transquillota S.A.

Nopel Ltda.
Empresa Eléctrica Piura S.A.

Gasoducto Tal tal Ltda.
Elesur S.A.

Etevensa

Exchange difference
Electrogas S.A.
Edenor S.A.

Smartcom S.A.
Aguas Santiago Poniente S.A.

Endesa Internacional S.A.

Sacme
Gasoducto Atacama y Cía Ltda.
Mundivía S.A.
Soc. de Inv. Chispa Uno S.A.

Nature of
Transaction

Interest
Monetary correction
Exchange difference
Sale of energy
Purchase of energy
Purchase of energy
Sale of energy
Services
Interest
Services
Services
Sale of energy
Purchase of energy
Services
Exchange difference
Services
Interest
Services
Monetary correction
Exchange difference
Sale of energy
Services
-
Services
Sale of energy
Services
Services
Interest
Services
Services
Interest
Services
Services
Services
Services

Income (expense)

2000
ThCh$

2001
ThCh$

10,701,400
4,913,981
3,679,900
-
-
-
38,540,741
457,702
128,481
(461,597)
(1,582,825)
2,400,156
-
(1,176,074)

-
611,474
(71,361,781)
8,656
(50,290,063)

-
(10,294,455)
(44,830)
(547)
(2,251,599)
37,597,406
2,756,147
823,896
-
-
(8,145)
(2,925,860)
(749,657)
121,323
-
17,270

9,763,386
4,442,082
16,537,140
22,146,226
(14,900,189)
(3,869,809)
45,475,475
877,070
130,492
-
315,897
911,023
(9,596,258)
1,177,815
(785)
-
(50,012,000)
19,882
(29,657,462)
(731,275 )
2,974,089
3,152,840

(2,378,285 )
-
4,305,339
3,974,420
203,326
28,930
235,839
(2,129,579)
(799,542)
-
59,376
6,390

Total

(36,964,353)

3,052,220

The transfer of short-term funds between related companies, which are not for collection or payment of services, is

on the basis of a current cash account, at a variable interest rate based on market conditions. The resulting accounts

receivable and accounts payable are essentially on 30 day terms, with automatic rollover for the same period and

settlement in line with cash ﬂ ows.

The most signiﬁ cant transactions are as follows:

Company

Elesur S.A.

Endesa Internacional
Transmisora Eléctrica de Quillota Ltda.
Atacama Finance Co.

Type

Due Date

Note payable
Note payable
Note payable
Note payable
Note receivable
Note receivable

May 2003
May 2003
Aug 2003
Nov 2003
2006 (total)
2016 (total)

Interest
Currency

UF
UF
UF
Reales
UF
US$

Capital

35,827,780
22,873,999
101,103
57,550,000
87,846
250,872,179

Rates

4.66%
5.38%
5.38%
14.00%
9.00%
4.59%

Note 7

Inventories:

Inventories include the following items and are presented net of a provision for obsolescence amounting to ThCh$ 6,448,500

and ThCh$ 3,985,169 as of December 31, 2000 and 2001, respectively:

Real estate under development
Materials in transit
Operation and maintenance materials
Other

As of December 31,

2000
ThCh$

31,261,062
2,757,448
30,373,445
8,744,496

2001
ThCh$

26,468,905
485,401
40,722,575
7,492,123

Total

73,136,451

75,169,004

Note 8

Deferred income taxes:

Income taxes recoverable (payable) as of each year-end are as follows:

Income tax payable
Income tax recoverable

Net

As of December 31,

2000
M$

2001
M$

(115,542,094)
69,488,255

(75,032,060)
55,835,050

(46,053,839)

(19,197,010)

9
9

0
0

/
/

The Company incurred taxable losses in the amount of ThCh$ 110,436,055 and ThCh$ 87,130,898 for the years ended

December 31, 2000 and 2001, respectively.

The balance of taxed retained earnings and the related tax credits are as follows:

Year

2000
2001

Retained Deﬁ cit
ThCh$

-
(17,630,654)

Credit
ThCh$

-
-

The net effect of timing differences, amortization of complementary accounts, changes in valuation allowance, and other

charges or credits generated a net credit to income of ThCh$ 13,466,338 and a net charge of ThCh$ 7,892,427 during

the years ended December 31, 2000 and 2001, respectively

In accordance with BT No. 60 and 69 of the Chilean Association of Accountants, and Circular No. 1,466 of the SVS, the

Company and its subsidiaries have recorded consolidated deferred income taxes as of December 31, 2000 and 2001

as follows:.

As of December 31, 2000

As of December 31, 2001

Asset

Liability

Asset

Liability

Short-term

Long-term

Short-term

Long-term

Short-term

Long-term

Short-term

Long-term

ThCh$

Depreciation

Severance indemnities

Allowance for doubtful accounts

28,470,379

7,247,866

Actuarial deﬁ cit (companies in Brazil)

Intangibles

Deferred income

Deferred charges

563,725

571,788

3,070,129

6,883,666

292,975,488

6,019,042

113,225

360,880,877

1,756,225

297,431

187,066

- 25,302,734

10,103,789

7,269,312

2,503,693

1,942,208

218,529

2,864,105

13,898

1,771,789

718,919

633,433

795,102

4,182,262

1,866,600

14,103,501

Obsolescence of raw materials

1,069,495

283,093

623,068

327,037

Finance costs

Derivative contracts

Vacation accrual

Tax losses

Contingencies

Leasing receivables

Hid. El Chocón investments

Metered energy

Salaries for construction-in- progress

Reserves utilized

Residual value

Imputed interest on construction

Cost of studies

Other events

3,259,679

196,662

564,072

2,241,772

1,585,058

16,563,317

70,907,551

2,694

971,830

1,377,759

3,898,560

77,125,508

6,631,376

26,503,369

1,619,068

7,217,566

4,199,633

33,281,255

137,319

- 6,620,972

6,314,140

3,020,289

6,470,837

4,482,547

4,506,077

5,673,299

4,693,305

1,867,467

2,163,547

885,436

5,271,785

1,411,194

3,418,966

1,870,388

7,361,514

497,368

111,450

5,233,893

3,251,844

7,014,763

4,689,434

4,539,456

2,620,122

Complementary accounts, net

(7,851,744)

(61,954,731)

(8,625)

(258,838,763)

(12,906,460)

(44,829,924)

(17,584)

(283,955,007)

Valuation allowance

(54,784)

(1,138,679)

(3,225,561)

Total

48,844,289

54,532,145

19,174,710

74,522,521

32,194,844

95,053,538

8,736,494

130,063,212

Income tax expense for the years ended December 31, 2000 and 2001 is as follows:

Tax expense
Income tax provision

Deferred taxes
Adjustment for tax expense prior year
Deferred taxes
Beneﬁ ts for tax losses
Amortization of complementary accounts
Change in valuation allowance
Other charges or credits

As of December 31,

2000
ThCh$

2001
ThCh$

155,527,760

123,520,780

233
26,202,873
(27,236,631)
(21,772,292)
1,157,819
8,181,893

1,293,142
18,341,175
(10,793,195)
(2,409,719)
1,528,476
1,225,690

Total

142,061,655

132,706,349

Note 9

Other current assets:

Other current assets as of each year-end are as follows:

Forward contracts and swaps (1)
Guarantees and indemnities
Deferred expenses
Post-retirement beneﬁ ts
Deposits for commitments and guarantees
Investment projects
Reverse repurchase agreements (2)
Other

As of December 31,

2000
ThCh$

115,920,897
1,043,875
6,465,146
859,863
2,946,013
2,960,545
-
3,987,078

2001
ThCh$

107,509,356
1,733,084
3,024,796
858,456
4,815,945
2,957,200
1,853,782
782,556

Total

134,183,417

123,535,175

(1) See detail in Note 28.
(2) The details of reverse repurchase agreements as of December 31, 2001 are as follows:

9
9

2
2

/
/

Issuer

Bank of Boston
ABN Amro Bank
Banco Scotiabank
Banco Central
Banco Central

Total

Purchase
Date

Maturity
Date

Dec 2001
Dec 2001
Dec 2001
Dec 2001
Dec 2001

Jan 2002
Jan 2002
Jan 2002
Jan 2002
Jan 2002

Market Value as of

Purchase
Date
ThCh$
8,295
660,581
154,480
43,101
986,837

December 31,
2001

ThCh$
8,296
660,701
154,508
43,123
987,154

1,853,294

1,853,782

Note 10

Property, plant and equipment:

The composition of property, plant and equipment as of each year-end is as follows:

Land

Buildings and infrastructure
Distribution and transmission lines and public lighting
Less: third party contributions
Sub-total

As of December 31,

2000
ThCh$

2001
ThCh$

135,520,049

152,826,632

5,681,038,075
3,987,368,931
(45,197,449)
9,623,209,557

6,121,635,261
4,565,625,336
(54,108,614)
10,633,151,983

Machinery and equipment

1,631,034,099

1,770,039,183

Work in progress
Construction materials
Leased assets (1)
Furniture and ﬁ xtures, tools, and computing equipment
Vehicles
Equipment in transit
Other assets
Sub-total

313,389,846
51,756,288
2,246,761
13,495,554
10,582,720
7,818,583
14,122,432
413,412,184

307,796,507
62,021,434
2,478,402
80,522,684
15,141,402
7,954,982
13,532,624
489,448,035

Technical appraisal

602,049,118

660,687,154

Total property, plant and equipment

12,405,225,007

13,706,152,987

Less: accumulated depreciation

(3,720,940,728)

(4,361,444,579)

Total property, plant and equipment, net

8,684,284,279

9,344,708,408

(1) Leased assets consist primarily of a leasing contract from July 1, 2000 to December 31, 2001, in the amount of US$ 250,000 a month,

with a purchase option during January 2002.

Note11

Investment in related companies:

Investments as of each year-end are as follows:

Related Companies

Number
of Shares

Percentage
Owned
%

Related
Equity
ThCh$

Carrying Value

Equity in net earnings (losses)

2000
ThCh$

2001
ThCh$

2000
ThCh$

2001
ThCh$

Cía. de Interconexión Energética S.A.
Nopel Ltda.
Gasoducto Cuenca Noroeste Ltda.
Gasoducto Atacama Ltda.
Inversiones Eléctricas Quillota S.A.
Inversiones Electrogas S.A.
Com. de Energía del Mercosur S.A.
Transquillota Ltda.
Atacama Finance Co.
Endesa Market Place
Sacme
Consorcio Ing. B y R Ingendesa Ltda.
Electrogas S.A.
Distrilec Inversora S.A.
Consorcio Ingendesa – Minmetal Ltda.
Central Geradora Termelectrica Fortaleza S.A.
Ingendesa do Brasil Limitada

128,270,527
-
-
-
608,676
425
6,305,400
-
3,150,000
210
12,000
-
85
4,416,141
-
20,246,908
-

45.00
50.00
50.00
50.00
50.00
42.50
45.00
50.00
50.00
15.00
50.00
-
00.02
51.50
50.00
48.82
100.00

109,315,645
70,487,168
54,174,024
45,043,484
14,761,592
13,792,501
10,097,650
4,639,559
4,961,934
3,898,873
81,196
-
9,313,363
21,282
45,869
10,712,307
48,154

49,542,022
34,918,355
28,575,990
17,445,367
7,687,935
5,828,237
4,061,417
2,255,228
2,134,962
810,580
68,772
4,370
1,943
-
-
-
-

49,192,040
35,243,584
27,087,012
22,521,741
7,380,796
5,861,813
4,543,943
2,319,780
2,480,967
584,831
40,599
-
1,979
10,960
22,935
5,229,748
48,154

(1,517,689)
(2,519,643)
279,161
2,867,235
597,987
291,491
190,578
93,851
88,164
(303,147)
2,914
3,452
163
-
-
-
-

(5,657,136)
(3,340,813)
(4,550,161)
3,207,553
(28,926)
33,098
47,449
85,282
117,300
(326,609)
(7,121)
-
36
10,959
21,907
-
-

Total

153,335,178 162,570,882

74,517

(10,387,182)

Income and (losses) recognized by Enersis S.A. according to the participation in the related companies as of December

31, 2001, amounted to ThCh$ 4,414,996 and ThCh$ 3,523,584, and (ThCh$ 4,340,479) and (ThCh$ 13,910,766), in 2000

and 2001, respectively.

In accordance with Technical Bulletin No. 64 of the Chilean Association of Accountants for the years ended December

31, 2000 and 2001, the company has recorded foreign exchange gains and losses on liabilities related to net investments

in foreign countries that are denominated in the same currency as the functional currency of those foreign investments.

Such gains and losses are included in the cumulative translation adjustment account in shareholders’ equity, and in

this way, act as a hedge of the exchange risk affecting the investments. As of December 31, 2001 the corresponding

amounts are as follows:

Company

Country of Origin

Central Hidroeléctrica Betania
Cachoeira Dourada
Edegel S.A.
Cía, Interconexión Energética S.A.
Atacama Finance Co.
Hidroeléctrica El Chocón S.A.
Com, de Energía del Mercosur S.A.
Central Costanera S.A.
Edesur S.A.
Edelnor S.A.
Cía, do Electricidade do Río do Janeiro
Codensa S.A.
Coelce

Colombia
Brasil
Perú
Brasil
Islas Caymán
Argentina
Argentina
Argentina
Argentina
Perú
Brasil
Colombia
Brasil

Investment
ThCh$

505,455,998
471,739,965
203,771,911
49,192,040
2,480,967
233,231,560
4,511,219
91,317,516
452,788,607
104,336,669
405,722,190
287,219,528
135,421,280

Reporting
Currency

US$
US$
US$
US$
US$
US$
US$
US$
US$
US$
US$
US$
US$

Liability
ThCh$

304,116,982
557,582,569
221,862,388
57,017,606
3,646,107
118,843,799
4,119,537
68,369,818
371,447,581
33,495,123
387,370,348
319,535,193
100,161,314

Total

2,947,189,450

2,547,568,365

9
9

4
4

/
/

The investments made by Enersis S.A. and it afﬁ liates during the year ended December 31, 2001, amounted to

ThCh$12,504,600, which are detailed as follows:

Acquisitions

Central Termoeléctrica Fortaleza S.A.
Chilectra S.A.
Compañía Eléctrica del Río Maipo S.A.
Cachoeira Dourada S.A.
Cerj
Other

As of December 31,

2000
ThCh$

5,739,102
4,837,695
483,628
1,444,175
-
-

2001
ThCh$

-
215,784,091
13,621,454

77,920,070
6,395,590

Total

12,504,600

313,721,205

Note 12

Investments in other companies:

Investments in other companies at December 31, 2000 and 2001 are as follows:

Company

Club de la Banca y Comercio
Club Empresarial
Edegas
Empresa Eléctrica de Aysen S.A
Inmobiliaria España S.A.
Inverandes S.A.
Cooperativa Eléctrica de Chillán
CDEC-SIC Ltda.
Empresa Eléctrica de Bogotá S.A.
Autopista del Río Maipo S.A.
Financiera Eléctrica Nacional
Saelpa
Teleceara
Supra CCVM Lltda.
Banco Destak
Menescal Produções Artisticas
Soproco
Coger

Total

Number
of shares

Percentage
owned
%

As of December 31,

2000
ThCh$

2001
ThCh$

2
1
1
2,516,231
1
1,011,899
-
-
6,409,132
-
-
-
-
-
-
-
-
-

-
-
-
-
-
-
-
-
5.50
-
-
-
-
-
-
-
-
-

5,914
2,366
1,819
1,920,450
95
3,288
12,529
148,567
129,049,898
66
-
1,077
767
39,416
63,820
8,676
4,687
3,024

2,497
6,144
2,540
1,920,418
95
3,321
12,531
148,641
142,874,547
4,686
120,393
1,006
716
36,802
59,588
8,101
-
2,825

131,266,459

145,204,851

Note 13

Goodwill

In accordance with current standards, recognition has been given to the excess of purchase price of the proportional

equity in the net assets acquired (goodwill) in the purchase of shares as of December 31, 2000 and 2001, as follows:

Company

Amortization
ThCh$

Net Balance
ThCh$

Amortization
ThCh$

Net Balance
ThCh$

As of December 31,

2000

2001

Central Costanera S.A.
Chilectra S.A.
Cía. de Electricidade do Río de Janeiro
C. Hidroeléctrica Cachoeira Dourada
Coelce
Codensa
Distrilec Inversora S.A.
Edegel S.A.
Edesur S.A.
Emgesa S.A.
Empresa Eléctrica de Colina S.A.
Endesa (Chile)
Gasoducto Atacama y Cía Ltda.
Hidroeléctrica El Chocón S.A.
Hidroinvest S.A.
Inversiones Distrilima S.A.
Investluz S.A.
Lajas Inversora S.A.
Luz de Bogotá S.A.
Cía. Eléctrica del Río Maipo S.A.

(1,434,198)
(1,009,716)
(5,965,463)
(3,578,330)
(10,673,844)
(1,471,550)
(579,368)
(33,235)
(560,868)
(1,330,008)
(179,794)
(41,707,068)
(4,633)
(492,731)
(68,133)
(1,235)
(54,631)
(92,494)
(353,159)
(34,597)

21,202,462
111,564,970
95,983,132
60,831,607
186,792,263
24,771,336
10,161,201
567,772
8,366,290
22,388,470
2,831,752
731,610,790
84,172
5,806,052
1,203,677
17,285
956,043
1,572,397
5,944,818
10,633,471

(1,587,837)
(5,998,849)
(6,604,509)
(3,961,656)
(11,817,271)
(1,629,118)
(641,435)
(36,796)
(620,951)
(1,472,484)
(179,794)
(41,707,069)
(4,633)
(545,515)
(75,431)
(1,367)
(60,483)
(102,402)
(390,989)
(549,956)

21,885,925
109,150,041
99,660,748
63,386,494
194,984,978
25,796,107
10,608,278
591,799
8,641,573
23,314,335
2,651,958
689,903,722
79,541
5,882,504
1,257,188
17,768
997,974
1,638,437
6,190,662
10,487,406

Total

(69,625,055)

1,303,289,960

(77,988,545)

1,277,127,438

9
9

6
6

/
/

Following current standards, recognition has been given to the excess of the equity in the net assets purchased over the

purchase price (negative goodwill) in the purchase of shares as of December 31, 2000 and 2001 as follows:

Company

As of December 31,

2000

2001

Amortization
ThCh$

Net Balance
ThCh$

Amortization
ThCh$

Net Balance
ThCh$

Synapsis Soluciones y Servicios IT Ltda.
Edelnor S.A.
Central Hidroeléctrica Betania S.A.
Cía. Eléctrica Cachoeira Dourada
Edegel S.A.
Empresa de Energía de Bogotá S.A.
Cía. de Electricidade do Río de Janeiro
Coelce

14,868
1,023,974
29,691,397
1,721,820
8,315,520
209,708
-
427,526

167,282
4,265,826
78,749,377
30,131,832
68,863,741
3,565,052
2,073,715
7,980,463

14,870
1,133,666
32,782,251
1,938,603
9,379,933
232,174
114,794
473,323

152,411
3,589,135
54,403,096
33,361,175
66,860,786
3,714,781
2,181,068
8,362,042

Total

41,404,813

195,797,288

46,069,614

172,624,494

Note 14

Other assets:

Other assets as of each year-end are as follows:

Bond discount
Forward contracts and swaps (1)
Deferred expenses
Loan costs
Concession rights
Post-retirement beneﬁ ts
Deposits
Others

Total

(1) See detail in Note 28.

As of December 31,

2000
ThCh$

11,819,650
-
42,679,447
14,074,843
934,997
4,565,030
18,567,769
13,316,406

2001
ThCh$

23,554,931
7,826,657
47,480,297
17,124,937
5,885,140
46,035,301
18,111,793
26,733,815

105,958,142

192,752,871

Note 15

Due to banks and ﬁ nancial institutions:

Short-term debt due to banks and ﬁ nancial institutions:

Financial Institution

American Express
Atlantic Security
Banco Alfa
Banco Bandeirantes
Banco Bansur
Banco Barings
Banco Bayernische Landes
Banco Brasiletros
Banco BBVA Bhif
Banco BBVA Argentaria
Banco Beal
Banco Bice
Banco Bradesco
Banco Colombia
Banco Continental-Perú
Banco Crédito - Chile
Banco Crédito -Perú
Banco Deutsche
Banco de Chile
Banco Estado
Banco do Brasil
Banco Francés
Banco Ganadero
Banco HBSC
Banco Interamericano Des.
Banco Itaú
Banco Lloyd’s
Banco Nationale de Paris
Banco Nazionale del Lavoro
Banco Real
Banco Río
Banco Safra
Banco Santander
Banco Santiago
Scotiabank
Banco Wiese Perú
Bank Boston
Bank of América
Bank of Tokio
Bndes
Caixa General de Depósito
Chase Manhattan Bank
Citibank
Interbank
Unibanco
Santander Overseas Bank
Standard Chartered

Foreign Currency

US$

2000
ThCh$

2001
ThCh$

Other foreign currencies
2001
ThCh$

2000
ThCh$

Local Currency

Ch$

Total

2000
ThCh$

2001
ThCh$

2000
ThCh$

2001
ThCh$

2000
ThCh$

2001
ThCh$

29,696,906
18,965,581
-
-
-
-
2,529,569
-
-
-
520,986
19,845
-
-
37,707
23,535,568
-
-
221,738
-
254,249
12,216,016
-
12,842,359
-
-
-
5,405,967
12,226,086
-
7,471,414
4,423,599
7,198,846
1,539,519
-
-
21,488,352
12,554,142
13,368,588
-
-
-
6,754,453
25
-
-
6,124,388

-
-
-
-
-
6,570,818
3,786
-
11,349,564
18,819,302
-
-
11,582,199
-
5,914,464
6,067
-
3,408,065
-
-
-
-
-
-
-
14,435,270
12,354,392
5,292,569
25,241
3,189,990
15,313,969
4,486,709
1,461,690
1,366,383
-
35,478
22,216,619
17,513,640
125,795
-
-
561
22,264,421
-
5,018,583
9,825,138
-

-
-
-
2,584,490
3,059,181
-
-
-
1,708,088
14,996,964
-
-
7,650,992
5,940,031
3,402,433
9,070,340
-
-
-
-
-
-
8,449,069
-
-
-
-
-
-
5,180,866
365,498
-
14,945,883
-
-
-
11,643,500
-
-
5,336,715
-
-
872
-
-
-
4,873,744

-
-
-
-
-
9,687,512
-
-
-
2,857,889
-
-
-
-
-
315,762
-
-
-
-
-
-
-
-
-
6,449,924
-
-
-
14,612,464
-
4,273,096
-
20,122,780
-
-
-
-
- 15,299,768
-
-
-
-
-
8,085,958
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
22,085
-
-
-
8,195,398
-
-
-
-
-
22,596
-
12,466,197
-
-
-
-
-
-
-
2,857,937
-
-
-
7,396,952
-
169
-
-
-
-
-
-

-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-

-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
252
40,992,650
-
-
-
-
-
-
-
-
-
-
-
-
91
8,232,356
-
-
-
-
-
13,527,124
-
15,383,403
-
-
-
-
-
-
-
-
-
4,620,368
-
-
-
-
-
-
-
-
-
-
-
-
-
-
20,636,218
-
50,121,671 2,295,006
-
8,185,707
-
-
-
-
-
-
-
670,908
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-

-
29,696,906
-
18,965,581
9,687,512
-
-
2,584,490
2,857,889
3,059,181
6,570,818
-
3,786
2,529,569
315,762
-
11,349,816
42,700,738
18,819,302
14,996,964
-
520,986
-
19,845
18,032,123
7,650,992
5,940,031
-
3,440,140 20,526,928
40,838,264
4,279,254
-
20,122,780
-
3,408,065
13,748,862
-
30,683,171
-
254,249
-
12,216,016
-
8,449,069
8,085,958
12,842,359
-
4,620,368
-
-
14,435,270
-
12,354,392
5,405,967
5,292,569
12,226,086
25,241
3,189,990
5,180,866
7,836,912 15,336,054
4,486,709
4,423,599
9,657,088
42,780,947
3,661,389
51,661,190
-
8,185,707
58,074
-
33,131,852 34,682,816
12,554,142 17,513,640
125,795
14,039,496
5,336,715
-
2,857,937
-
561
-
6,755,325 29,661,373
169
5,018,583
9,825,138
-

25
-
-
10,998,132

162,370,405 2,295,349 476,274,742 292,242,781

162,282,268 2,295,349 462,269,098 223,184,833

7.58%

9.03%

10.99%

9
9

8
8

/
/

Total

199,395,903

192,580,713

99,208,666

97,366,719 15,299,768

Total principal

187,899,403

156,362,585

99,208,666

64,526,899 12,878,761

Weighted average annual interest rate

7.55%

10.98%

12.06%

11.28%

6.00%

Percentage of debt in foreign currency:
Percentage of debt in local currency:
Total

As of December 31,
2001
2000
%
%
99.21
62.70
0.79
37.30
100.00
100.00

To develop investment plans the Company obtained ﬁ nancing from banks and ﬁ nancial institutions through the issuance of debt in local and foreign markets

which have ﬁ nancial and non-ﬁ nancial covenants.

Financial Institution

ABN Amro Bank
Argentaria Bank
Banco Bayernische Landes
Banco Beal
Banco BBVA Bhif
Banco Bndes
Banco Continental
Banco de Chile
Banco Estado
Banco do Brasil
Banco Ganadero
Banco Hermes
Banco Medio Crédito
Banco Nacional Desarrollo Soc.
Banco Rio
Banco Santander
Banco Santiago
Banco San Paolo
Scotiabank
Banesto
Bank Boston
Bank of América
Bank of Tokyo Mitsubishi
Banque Nationale París
Bco. do Estado de Ceará
Bco. do Nordeste do Brasil
BIRF
BNP España
Chase Manhattan Bank
Citibank N.A.
Dresner B. Luxemburg
Electrobras - Brasil
Eximbank
Export Develop. Corp.
HSBC Bank
Kreditankstal Fur Weideraubau
Midland Bank
Santander Central Hispano
Santander Inv. Bank
Skandinaviska Enskildabnken
Societe Generale
Unibanco

Current portion of long-term debt due to banks and ﬁ nancial institutions:

Foreign Currency

US$

2000
ThCh$

2001
ThCh$

Other foreign currencies
2000
ThCh$

2001
ThCh$

Local Currency

Ch$

Total

2000
ThCh$

2001
ThCh$

2000
ThCh$

2001
ThCh$

2000
ThCh$

2001
ThCh$

2,039,670
3,985,490
-
-
-
-
-
-
1,474,145
137,777
-
2,662,900
3,643,820
-
-
5,791,350
-
41,810,633
813,498
2,951,183
5,836,549
1,043,419
6,362,038
4,328,005
-
-
-
3,463,866
720,504
14,229,307
1,231,899
-
3,882,984
1,542,244
-
425,418
929,492
9,331,489
3,825,336
1,996,294
3,852,736
-

4,506,025
-
20,712,107
15,033,081
569,287
-
-
-
1,605,919
142,977
-
6,386,167
4,091,783
-
-
2,890,978
-
65,542,037
543,502
4,167,953
-
67,497,008
54,449,296
4,365,319
-
-
-
-
56,060,016
21,972,641
225,973
-
-
1,536,967
20,961
391,490
4,937,486
-
4,915,551
2,164,185
1,690,246
-

-
13,482
-
-
-
647,271
7,619,386
-
-
1,065,169
5,737,086
-
-
-
-
3,295,340
-
-
-
-
4,748,645
-
871,338
-
12,547
187,364
1,010,772
-
-
-
-
3,209,178
-
-
-
-
-
-
-
-
-
73,865

-
-
-
-
-
-
-
-
-
889,597
-
-
-
632,429
1,841
2,115,286
-
-
-
-
-
-
866,018
-
6,665
179,761
1,035,409
-
-
-
-
2,882,866
-
-
-
-
-
-
-
-
-
70,904

-
-
-
-
-
-
-
26,230,239
902,419
-
-
-
-
-
-
129,332
26,100,906
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-

-
-
-
-
-
-
-
17,225,680
19,106,377
-
-
-
-
-
-
17,225,681
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-

-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-

647,271
7,619,386

2,039,670 4,506,025
-
3,998,972
- 20,712,107
- 15,033,081
- 569,287
-
-
26,230,239 17,225,680
2,376,564 20,712,296
1,032,574
1,202,946
-
5,737,086
6,386,167
2,662,900
4,091,783
3,643,820
- 632,429
1,841
-
9,216,022 22,231,945
-
26,100,906
41,810,633 65,542,037
543,502
813,498
4,167,953
2,951,183
10,585,194
-
1,043,419 67,497,008
7,233,376 55,315,314
4,365,319
4,328,005
6,665
12,547
187,364
179,761
1,010,772 1,035,409
-
3,463,866
720,504 56,060,016
14,229,307 21,972,641
1,231,899
225,973
3,209,178 2,882,866
-
3,882,984
1,536,967
1,542,244
- 20,961
425,418
391,490
929,492 4,937,486
-
9,331,489
4,915,551
3,825,336
2,164,185
1,996,294
3,852,736 1,690,246
70,904

73,865

210,166,385 408,657,469

200,426,448 361,107,060

8.35%

5.62%

Total

128,312,046 346,418,955

28,491,443

8,680,776 53,362,896 53,557,738

Total principal

123,716,201 298,870,387

27,351,785

8,678,935 49,358,462 53,557,738

Weighted average annual interest rate

7.33%

6.03%

12.73%

8.60%

8.50%

7.50%

Percentage of debt in foreign currency:
Percentage of debt in local currency:
Total

As of December 31,
2001
2000
%
%
74.61
86.89
13.11
25.39
100.00
100.00

Note 16

Long-term portion of debt due to banks and ﬁ nancial institutions :

Financial Institution

Currency

As of December
31, 2000
Long-term
portion
ThCh$

After 1 year
but within 2
years
ThCh$

After 2 years
but within 3
years
ThCh$

After 3 years
but within 5
years
ThCh$

As of December 31, 2001
After 5 years
but within 10
years
ThCh$

After 10
years
ThCh$

Total long
term portion
ThCh$

Annual
interest rate
%

ABN Amro Bank

Banco Bayernische Landes
Banco BBVA
Banco Beal
Banco de Chile
Banco del Estado

Banco do Brasil

Banco Hermes
Banco Medio Crédito
Banco Nacional Desarrollo Soc.
Banco Nacional del Lavoro
Banco Rio Argentaria

Banco Santander

Banco Santander Central His.

Scotiabank
Banesto
Bank Boston
Bank of America

Bank of Tokyo Mitsubishi

Banque Nationale París
Bco. do Estado de Ceará
Bco. do Nordeste do Brasil
BIRF
BNDES

Bnp España
Chase Manhattan Bank

Citibank N.A.

Dresner B. Luxemburg
Electrobas - Brasil

Export Develop. Corp.
HBSC Bank
Kreditankstal Fur Weideraubau
Lloyd’s Bank

Midland Bank

Santander Investment Bank
Skandinaviska Enskildabnken
Societe Generale
Unibanco

US$
US$
US$
US$
US$
UF
UF
US$
Rs
US$
US$
US$
Rs
US$
US$
$ Arg
US$
US$
US$
US$
UF
US$
US$
US$
US$
US$
US$
US$
US$
US$
US$
Lira
Libra
Yen
US$
Rs
Rs
U.P.
Rs
Rs
US$
US$
US$
US$
US$
US$
US$
US$
US$
Rs
US$
US$
US$
US$
US$
US$
US$
US$
US$
US$
Rs

5,024,236
-
16,268,960
-
11,839,684
17,100,627
25,097,071
2,172,150
9,953,915
3,913,537
5,731,848
34,566,502
-
-
4,140,032
21,613
130,115,293
-
-
-
17,100,626
247,810,490
118,403,934
615,707
35,223,808
2,676,777
82,150,064
41,400,321
17,513,206
-
22,699,164
365,377
1,345,021
1,572,630
60,269,249
118,852
395,832
2,869,506
14,685,008
3,207,090
50,271,817
2,362,022
64,001,767
34,303,123
41,400,321
65,057,647
119,100,019
173,792,631
14,785,829
5,535,877
7,845,484
-
2,426,507
-
-
74,520,577
8,871,497
12,479,239
10,751,213
19,460,364
254,233

317,756
65,479,000
2,024,396
31,593,618
-
-
2,193,231
834,673
1,728,870
122,368
-
4,028,268
1,236,944
3,206,897
-
-
-
7,114,429
-
344,042
-
-
93,798,668
20,078
3,986,725
13,832,374
26,780,910
-
14,354,629
7,901,616
6,481,120
94,926
360,957
379,814
3,822,130
53,756
112,106
983,441
-
-
-
35,977
-
-
-
35,253,894
-
75,366,329
-
508,754
1,152,158
9,821,850
358,192
6,547,900
-
-
-
5,696,673
2,164,186
1,674,218
140,080

317,756
-
-
363,408,450
-
-
19,774,400
4,195
864,393
88,472
-
4,028,268
618,472
-
-
-
-
-
7,504,151
344,043
-
-
261,916,000
-
3,986,725
-
-
-
-
-
6,282,699
94,926
360,957
379,814
2,988,733
53,756
56,053
1,013,242
9,166,621
-
-
35,977
-
5,238,320
-
-
-
-
-
-
950,810
-
358,192
-
982,185
12,160,385
-
3,339,429
2,164,186
1,255,663
35,020

635,512
-
-
-
-
-
34,371,115
-
1,728,786
562,890
-
4,028,268
618,472
-
-
-
-
-
-
-
-
127,029,260
-
-
7,973,450
-
-
-
-
-
6,084,276
94,926
360,957
379,814
19,407,954
53,756
46,711
-
-
-
-
-
36,013,450
-
51,447,785
-
351,622,230
-
-
-
1,901,620
-
716,384
-
-
-
-
-
4,328,267
-
-

635,517
-
-
-
-
-
-
-
4,321,965
1,244,733
-
4,028,268
-
-
-
-
-
-
-
-
-
-
-
-
15,946,901
-
-
-
-
-
-
-
-
-
37,518,001
-
-
-
-
-
-
-
16,369,750
-
-
-
-
-
-
-
3,327,836
-
895,480
-
-
-
-
-
-
-
-

-
-
-
-
-
-
-
-
1,080,490
2,217,780
-
18,127,483
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-

1,906,541
65,479,000
2,024,396
395,002,068
-
-
56,338,746
838,868
9,724,504
4,236,243
-
34,240,555
2,473,888
3,206,897
-
-
-
7,114,429
7,504,151
688,085
-
127,029,260
355,714,668
20,078
31,893,801
13,832,374
26,780,910
-
14,354,629
7,901,616
18,848,095
284,778
1,082,871
1,139,442
63,736,818
161,268
214,870
1,996,683
9,166,621
-
-
71,954
52,383,200
5,238,320
51,447,785
35,253,894
351,622,230
75,366,329
-
508,754
7,332,424
9,821,850
2,328,248
6,547,900
982,185
12,160,385
-
9,036,102
8,656,639
2,929,881
175,100

5,63
3,31
10,55
2,70
-
-
6,43
6,50
14,66
7,04
-
1,75
13,49
7,89
-
-
-
8,24
8,43
5,83
-
3,04
2,99
2,10
4,86
6,61
3,46
-
7,48
10,30
3,70
4,44
5,38
0,90
5,59
8,00
10,00
5,32
10,00
-
-
5,61
8,53
3.36
5.38
2.28
2.80
2.93
-
19.20
4.69
2.96
4.85
7.82
6.70
3.02
-
7.25
0.65
2.24
8.50

Total

1,643,588,297

431,907,953

709,772,293

649,405,883

84,288,451

21,425,753 1,896,800,333

Percentage of debt in foreign currency:
Percentage of debt in local currency:
Total

As of December 31,
2001
2000
%
%
97.03
96.39
2.97
3.61
100.00
100.00

1
1

0
0

/
/

Note 17

Other current liabilities:

Other current liabilities for each year-end are as follows:

Advances on construction
Taxes payable
Contingencies
Customer advances
Charity fund
Employee obligations
Forward contracts and swaps
Emergency energy provision
Other current liabilities

As of December 31,

2000
ThCh$

8,464,108
1,108,387
19,587,259
4,322,620
9,978,975
1,404,786
115,126,482
2,744,883
3,437,629

2001
ThCh$

6,605,063
4,168,111
16,369,457
4,214,924

3,094,714
111,046,267
1,281,231
3,851,516

Total

166,175,129

150,631,283

Note 18

Promissory notes:

Financial
Instrument

2001-029
2000-040
Commercial paper

Total

Face
Value
ThCh$

Maturity
Date

Interest
Rate
%

As of December 31,
2001
ThCh$

2000
ThCh$

42,328,262
7,640,750
10,456,868

May 13, 2002
Nov 21, 2000
Feb 01, 2002

18.13
-
08.48

-
16,635,381
-

42,328,262
-
10,710,814

16,635,381

53,039,076

Note 19

Bonds payable:

a) Details of the current portion of bonds payable is as follows at each year-end:

Instrument

Face Value
Series

Interest
Currency Outstanding

Maturity

Bonds – Distrilima
Bonds – Distrilima
Bonds – Distrilima
Bonds – Distrilima
Bonds – Distrilima
Bond No.269
Yankee Bonds – Enersis
Yankee Bonds – Enersis
Yankee Bonds – Enersis
Bonds Endesa
Bonds Endesa
Bonds Endesa
Bonds Endesa
Bonds Endesa
Bonds Endesa
Bonds Endesa Internacional
Bonds Endesa
Bonds Endesa
Bonds Pehuenche
Bonds Edegel
Bonds Edegel
Bonds Edegel
Bonds Edegel
Bonds Edegel
Bonds Emgesa
Bonds Emgesa
Bonds Emgesa
Bonds Emgesa
Bonds Emgesa
Bonds Emgesa
Bonds Emgesa
Bonds Emgesa
Bonds Emgesa
Bonds Endesa
Eurobonds

1
2
3
1st Prog
1st Prog
B1 – B2
1
2
3
1
2
3
1
1
E-1, E-2
C
B-1, B-2
C1, C2; D1, D2
1
1
2
3
4
5
B-1
B-5
B-7
B-10
C-10
B-10 2nd
A-5
B-3
A-1
F
First

Soles
Soles
US$
Soles
Soles
UF
US$
US$
US$
US$
US$
US$
US$
US$
UF
US$
UF
UF
US$
US$
US$
US$
US$
US$
$ Col.
$ Col.
$ Col.
$ Col.
$ Col.
$ Col.
$ Col.
$ Col.
$ Col.
UF
Euro

ThCh$

49,919,000
28,529,386
8,975,023
15,104,316
18,949,365
422,614
300,000,000
350,000,000
150,000,000
230,000,000
220,000,000
200,000,000
400,000,000
400,000,000
6,000,000
150,000,000
750,000
1,439,153
170,000,000
30,000,000
30,000,000
30,000,000
20,000,000
10,000,000
85,000,000
12,750,006
19,500,010
229,825,122
19,777,918
60,000,031
70,568,381
31,525,018
15,000,006
1,500,000
400,000,000

Par Value
Rate
%

Date

2000
ThCh$

2001
ThCh$

9.61
5.50
7,70
7.50
6.90
5.63
6.90
7.45
6.63
7.88
7.33
8.13
7.75
8.50
6.20
7.20
6.00
6.80
7.30
8.75
8.41
8.75
8.44
11.50
15.80
13.62
13.94
14.26
10.07
14.19
8.34
11.75
13.43
6.20
3.34

Feb 01, 2011
Oct 01, 2011
Jul 01, 2001
Jul 01, 2006
Oct 01, 2006
Jun 15, 2009
Nov 21, 2006
Nov 21, 2016
Nov 21, 2026
Feb 01, 2027
Feb 01, 2037
Feb 01, 2097
July 15, 2008
Apr 01, 2009
Aug 01, 2006
Apr 01, 2006
Oct 01, 2001
May 01, 2010
May 01, 2003
June 13, 2007
Feb 14, 2007
Jun 03, 2006
Nov 21, 2005
Aug 22, 2003
Jun 01, 2006
Oct 09, 2004
Oct 09, 2006
Oct 09, 2009
Oct 09, 2009
Jan 09, 2009
Feb 09, 2002
Feb 09, 2002
July 09, 2006
Aug 01, 2022
July 24, 2003

5,834
28,467,203
8,891,455
-
-
-
986,213
1,233,960
471,668
4,463,472
3,971,228
4,004,496
8,403,279
5,027,182
-
1,632,355
12,374,337
2,157,170
1,223,281
118,246
554,509
76,016
108,661
-
-
120,225
187,372
2,249,637
167,330
275,282
174,220
14,243
-
-
3,300,934

5,656
-
-
560,818
265,109
7,124,286
1,091,861
974,781
522,194
4,465,325
4,396,643
881,043
9,303,474
5,565,715
2,482,820
1,767,933
-
2,264,334
1,354,324
135,589
629,499
88,834
120,301
272,091
1,671,716
115,575
180,930
2,181,610
132,386
326,721
221,893
9,186,308
105,663
620,705
2,001,651

Total

90,659,808

61,017,788

1
1

0
0

2
2

/
/

Details of the long-term portion of bonds payable is as follows at each year-end:

Instrument

Face Value
Series

Interest
Currency Outstanding

Maturity

Par Value
Rate

Date

ThCh$

2000

ThCh$

2001

ThCh$

Bonds – Distrilima
Bonds – Distrilima
Bonds – Distrilima
Bonds Endesa
Bonds Endesa
Bonds Endesa
Bonds Endesa
Bonds Endesa
Bonds Endesa
Bonds Endesa
Bonds Endesa
Bonds Pehuenche
Bonds Edegel
Bonds Edegel
Bonds Edegel
Bonds Edegel
Bonds Edegel
Bonds Emgesa
Bonds Emgesa
Bonds Emgesa
Bonds Emgesa
Bonds Emgesa
Bonds Emgesa
Bonds Emgesa
Bonds Emgesa
Bonds Endesa Internacional
Bond No. 269
Yankee Bonds – Enersis
Yankee Bonds – Enersis
Yankee Bonds – Enersis
Eurobonds

1
1st Prog
1st Prog
1
2
3
1
First
E-1, E-2
F
C1, C2; D1, D2
First
1
2
3
4
5
A-1
B-1
B-3
B-5
B-7
B-10
C-10
B-10 2nd
First
B1, B2
1
2
3
First

Soles
Soles
Soles
US$
US$
US$
US$
US$
UF
UF
UF
US$
US$
US$
US$
US$
US$
$ Col.
$ Col.
$ Col.
$ Col.
$ Col.
$ Col.
$ Col.
$ Col.
US$
UF
US$
US$
US$
Euro

825,918
15,104,316
18,949,365
230,000,000
220,000,000
200,000,000
400,000,000
400,000,000
6,000,000
1,500,000
1,439,153
170,000,000
30,000,000
30,000,000
30,000,000
20,000,000
10,000,000
15,000,006
85,000,000
404,908
12,750,006
19,500,010
229,825,122
19,777,918
60,000,031
150,000,000
5,874,406
300,000,000
350,000,000
150,000,000
400,000,000

9.61
7.50
6.90
7.88
7.33
8.13
7.75
8.50
6.20
6.20
6.80
7.30
8.75
8.41
8.75
8.44
11.50
13.43
15.80
14.79
13.62
13.94
14.26
10.07
14.19
7.20
5.63
6.90
7.45
6.63
3.34

Feb 01, 2011
July 01, 2006
Oct 01, 2006
Feb 01, 2027
Feb 01, 2037
Feb 01, 2097
July 15, 2008
Apr 01, 2009
Aug 01, 2006
Aug 01, 2022
Nov 01, 2010
May 01, 2003
Jun 13, 2007
Feb 14, 2007
Jun 03, 2006
Nov 21, 2005
Aug 22, 2003
Jul 09, 2006
Jun 01, 2006
Oct 09, 2002
Oct 09, 2004
Oct 09, 2006
Oct 09, 2009
Oct 09, 2009
Jan 09, 2009
Apr 01, 2006
Jun 15, 2009
Nov 21, 2006
Nov 21, 2016
Nov 21, 2026
July 24, 2003

821,388
-
-
136,029,625
130,115,293
118,286,630
236,573,260
236,573,260

23,398,880
100,543,636
17,742,995
17,742,995
17,742,995
11,828,663

414,178
3,462,801
5,296,048
62,420,029
4,644,438
14,473,532
88,714,972

177,429,945
207,001,600
88,714,974
225,454,317

930,072
15,104,316
18,949,365
134,808,820
144,053,800
26,463,993
261,916,000
261,916,000
- 97,575,960
- 24,393,990
21,401,008
111,314,300
19,643,700
19,643,700
19,643,700
13,095,800
- 6,654,370
- 4,286,809
- 24,291,915
-
3,643,787
5,572,851
65,681,051
5,652,274
17,147,234
98,218,500
- 95,533,472
196,437,000
163,523,326
98,218,500
249,605,948

Total

1,925,426,454 2,225,321,561

Bonds payable are comprised of the following:

Enersis S.A. Series A

On September 10, 1999, Enersis S.A. registered a bearer bond issue as of June 7, 1999 for a maximum amount of

UF 7,000,000, as follows:

Series

Total amount
In UF

No. of bonds
per series

Face value
In UF

7,000,000

700

10,000

The scheduled maturity of the bonds is 30 years, interest is payable semi-annually with the principal payable in one

installment on June 15, 2029. Annual interest is 5.80%, compounded semi-annually.

No placements from this registration have been made as of December 31, 2001.

ii)

Enersis S.A. Series B1-B2

On September 11, 2001, Enersis S.A. registered two series of bearer bonds as of June 14, 2001, as follows:

Series

B1
B1
B2
B2

Total amount
In UF

No. of bonds
per series

Face value
In UF.

1,000,000
3,000,000
1,000,000
1,500,000

1,000
300
1,000
150

1,000
10,000
1,000
10,000

The scheduled maturity of the Series B-1 bonds is 8 years, interest and principal payable semi-annually. Annual interest

is 5.50%, compounded semi-annually.

The scheduled maturity of the Series B-2 bonds is 21 years, principle payments beginning after 5 years, interest and

principal payable semi-annually. Annual interest is 5.75%, compounded semi-annually.

iii)

Enersis S.A. Yankee Bonds

On November 21, 1996, the Company, acting through its agency in the Cayman Islands, issued corporate notes (Yankee

Bonds) for US$ 800 million in three series, as follows:

Series

1
2
3

Total amount
In US$

300,000,000
350,000,000
150,000,000

Years to
maturity

Stated annual
interest rate

10
20
30

6,90%
7,40%
6,60%

1
1

0
0

4
4

/
/

Interest is payable on a semi-annual basis and principal is due upon maturity. The Series 3 bond holders have an option

to require the Company to redeem all or any US$ 1,000 portion thereof on December 31, 2003 at a redemtion price

equal to face value.

Repurchase of Yankee Bonds

During November 2001, the Company made a tender offer to repurchase all or a portion of the Series 2 Yankee Bonds.

The offer expired November 21, 2001 and the Company repurchased a total of US$ 100,266,000 in bonds with accrued

interest, at a price of US$ 95,536,000, generating a ﬁ nancial gain of US$ 8,201,000 (ThCh$ 5,369,952), which is included

in other non-operating income (see Note 23a).

iv)

Edelnor Bonds (Subsidiary of Distrilima S.A.)

First issue

Date of Issue

Number of bonds subscribed

Face value

Redemption term

Interest rate

Interest payment

Principal amortization

Second issue

Date of Issue

Number of bonds subscribed

Face value

Redemption term

Interest rate

Interest payment

Anticipated redemption option

Third issue

Date of Issue

Number of bonds subscribed

Face value

Redemption term

Interest rate

Interest payment

: March 1, 1996

49,919

100 soles each

15 years

9.6136% annual

Annually, on coupon maturity

Amortization of total principal upon maturity

: November 10, 1998

146,300

1000 soles each

4 years

14.396%

Accrued and paid within 90 days

Early redemption option

August 7, 1998

15,000

US$ 1,000 each

3 years

7.7%

Accrued and paid within 90 days

First program of corporate bonds

First issue

Date of Issue

Face value

Redemption term

Interest rate

Interest payment

: October 29, 2001

30,000 soles each

2 years

7.5%

Periodically accrued

Second issue

Date of Issue

Number of bonds subscribed

Face value

Redemption term

Interest rate

Interest payment

: October 19, 2001

20,000

5,000 soles each

5 years

6.9%

Periodically accrued

•

Endesa Chile

The Company made four public offerings of bonds in the local market on the following dates:

On September 12, 1988, the Company registered in the Securities Register of the Chilean Superintendency of Securities

and Insurance, under No. 105, the ﬁ rst issuance of bonds in the amount of UF 5,000,000, which was fully placed prior

to the end of the year ending December 31, 1988.

•

On August 24, 1989, the second issuance of bonds was registered under No. 111, amounting to UF 6,000,000, and was

fully placed as of December 31, 1990.

•

On December 7, 1990, the third bond issuance was registered under No. 131 in the amount of UF 4,000,000. Of this

issuance the amount of UF 2,030,000 has been placed as of December 31, 1997. The balance of UF 1,970,000 has been

cancelled due to the expiration of the placement period.

•

On August 9, 2001, the fourth bond issuance was registered under No. 264 in the amount of UF 7,500,000, and was

fully placed as of December 31, 2001.

Risk rating of the bonds issued is as follows as of the date of these ﬁ nancial statements:

- Comisión Clasiﬁ cadora de Riesgo

- Fitch IBCA Chile Clasiﬁ cadora de Riesgo Ltda.

- Clasiﬁ cadora de Riesgo Humphreys Ltda

Category

BBB +

Baa1

ISSUANCE TERMS

First Issuance

Issuer

Securities issued

Issuance Value

Capital amortization

Nominal interest rate

Interest Payments

Endesa Chile Internacional.

: Marketable securities denominated in US$ (150,000 bonds).

: One hundred and ﬁ fty million Dollars (US$ 150,000,000):

Full expiration as of Aril 1, 2006

7.2 % annually upon expiration

Interest will be paid every six months, upon expiration, starting October 1, 1996.

Accrued interest as of the period end amounts to ThCh$ 1,767,933 (ThCh$ 1,632,355

in 2000) and is shown under current liabilities.

Guarantee

: Guarantee from Empresa Nacional de Electricidad S.A.

As of July 24, 2000, the ﬁ rst registration of Eurobonds (European Medium Term

Note Programme) was registered in England, for a total of 1,000 million Euros.

ISSUANCE TERMS

First Registration

Securities registered

Issuance value

Capital amorization

Nominal interest rate

1,000 millon Euros

Euros 400,000,000

Principal due July 24, 2003

Euribor + 0.80

Interest payments

: Quarterly beginning October 24, 2000

Guarantee

Empresa Nacional de Electricidad S.A.

This liability is presented under “Due to banks and ﬁ nancial institutions – long-term”

and the accrued interest as of December 31, 2001 through the use of a foreign

currency swap the original currency was converted to US Dollars.

II)

Empresa Eléctrica Pehuenche S.A. issued bonds on May 2, 1996.

First Issuance

Issuer

Securities issued

Issuance Value

Capital amortization

Nominal interest rate

Interest payments

Empresa Eléctrica Pehuenche S.A.

: Marketable securities denominated in US$.

: One hundred and seventy million US Dollars (US$ 170,000,000) :

Full expiration as of May 1, 2003

7.3 % annually

Interest will be paid semi-anually, starting November 1, 1996.

Accrued interest as of the period end amounts to ThCh$ 1,354,324

(ThCh$ 1,223,280 in 2000) and is shown under Other Current Liabilities.

1
1

0
0

/
/

III) Edegel S.A. issued bonds on June 4, 1999, February 15, 2000, June 14, 2000 and November 27, 2000 and August 22,

2001 as per the following:

First Issuance

Issuer

Securities issued

Issuance value

Capital amortization

Nominal interest rate

Interest payments

Edegel S.A.

: Marketable securities denominated in US$ (120,000 bonds).

: US$ 120,000,000

June 3, 2006, February 14, 2007, June 13, 2007, November 26, 2005 and August 22,

2003, respectively.

8.75%, 8.41%, 8.75%, 8.4375% and 11.50% annually

Interest will be paid semi-anually, starting December 3, 1999. Accrued interest as

of the year-end amounts to ThCh$ 1,246,314 ThCh$ 857,432 in 2000) and is shown

under Other Current Liabilities.

IV)

Emgesa S.A. issued bonds on October 8, 1999 and July 9, 2001 as per the following:

First Issuance

Issuer

Securities issued

Issuance Value

Capital amortization

Interest nominal rate

Interest payment:

Emegesa S.A.

: Marketable securities denominated in Colombian pesos

$Col 530,000,000

Full expiration as of 2002, 2004, 2006, 2007, 2009 and 2010 for

$Col 1,525,000; $Col 15,000,000; $Col 85,000,000; $Col 81,407,744; $Col 19,500,000;

$Col 297,567,256 and $Col 30,000,000 respectively

15.5% annual average rate

Interest will be paid semi-anually. Accrued interest as of the period end amounts

to ThCh$ 5,549,184 (ThCh$ 3,188,309 in 2000) and is shown under current liabilities.

Bond discounts of Enersis S.A. and its afﬁ liates of ThCh$ 11,819,650 and ThCh$ 23,554,931 as of December 31, 2000

and 2001, respectively are included in Other Assets (see Note 14).

Note 20

Accrued expenses

Short-term accruals:

The accrued expenses included in current liabilities as of each year-end are as follows:

Proﬁ t sharing and other employee beneﬁ ts
Litigation and contingencies
Construction and other
Energy purchases and other
Income tax installments and other taxes
Pension accruals
Suppliers and services
Other accruals

As of December 31,

2000
ThCh$

23,921,296
21,900,309
4,505,562
2,491,126
7,041,515
942,526
1,604,411
9,014,845

2001
ThCh$

28,724,702
21,182,380
7,531,593
9,713,578
186,441
1,245,328
2,807,106
6,201,424

Total

71,421,590

77,592,552

Long-term accruals:

Long-term accruals include severance indemnities to personnel, calculated in accordance with the policy described in

Note 2. An analysis of the changes in the accruals in each year is as follows:

Opening balance as of January 1
Increase in accrual
Post retirement beneﬁ ts provision
Payments during the period
Sub-total
Complementary pension and others

As of December 31,

2000
ThCh$

65,572,705
22,440,136
8,100,748
(19,410,679)
76,702,910
46,069,477

2001
ThCh$

62,567,721
52,647,753
8,469,983
(34,014,488)
89,670,969
137,891,107

Total

122,772,387

227,562,076

1
1

2
2

/
/

Note 21

Minority interest:

a. Minority shareholders’ participation in the shareholders’ equity of the Company’s subsidiaries as of each year-end

is as follows:

Company

Autopista Los Libertadores S.A.
Cam Argentina S.A.
Cam Colombia S.A.
Capital de Energía S.A.
Central Hidroeléctrica Betania S.A.
Central Cachoeira Dourada
Central Costanera S.A.
Central Termoelectrica Buenos Aires S.A.
Cía. do Electricidade do Río do Janeiro
Chilectra S.A.
Cía. Eléctrica San Isidro S.A.
Cía. Peruana de Electricidad S.A.
Codensa S.A.
Companhia Energetica Do Ceara - Coelce
Compañía Eléctrica del Río Maipo S.A.
Constructora y Proyectos Los Maitenes S.A.
Edegel S.A.
Edelnor S.A.
Edesur S.A.
Emgesa S.A.
Empresa Eléctrica Pangue S.A.
Endesa
Endesa Argentina S.A.
Generandes Perú S.A.
Hidroeléctrica El Chocón S.A.
Hidroinvest S.A.
Inecsa 2000 S.A.
Infraestructura 2000 S.A.
Ingendesa S.A.
Inmobiliaria Centro Nuevo Ltda.
Inmobiliaria y Constructora Stgo. 2000 Ltda.
Inversiones Distrilima S.A.
Investluz S.A.
Luz de Bogotá S.A.
Pehuenche S.A.
Soc. Agrícola de Cameros Ltda.
Soc. Agrícola Pastos Verdes Ltda.
Túnel El Melón S.A.

As of December 31, 2000
Participation
%

Total
ThCh$

Equity
ThCh$

As of December 31, 2001

Participation

Total
ThCh$

24,516,214
2,032,864
584,928
485,074,156
441,180,655
441,708,509
113,569,387
36,585,872
432,230,436
442,322,327
30,697,271
35,676,365
967,292,763
600,678,337
21,757,680
1,389,998
578,589,126
244,833,070
572,068,097
810,845,898
51,461,296
1,336,793,430
37,325,663
335,394,369
200,353,152
95,672,777
24,736,309
60,770,139
2,632,196
(10,281)
69,903
142,723,272
486,276,684
560,298,331
143,253,570
6,050,651
46,400,092
601,209

0.05
0.10
0.001
49.00
14.38
1.16
48.32
22.17
41.25
2.03
50.00
49.00
51.52
43.41
1.61
45.00
30.16
40.00
34.11
51.52
7.52
40.02
0.01
45.74
34.81
30.07
2.68
40.00
2.36
0.08
7.50
32.75
37.55
55.00
7.45
42.50
45.00
0.05

12,259
2,033
8
237,686,337
63,432,072
5,138,528
54,876,728
8,111,088
178,293,878
8,955,973
15,348,636
17,481,418
498,302,343
260,756,166
350,842
625,499
174,482,229
97,933,228
195,142,384
417,708,492
3,869,889
534,972,375
3,732
153,399,322
69,742,932
28,768,804
662,933
24,308,056
62,186
(7)
5,243
46,741,871
182,596,894
308,164,082
10,672,391
2,571,527
20,880,043
301

0.05
0.10
0.001
49.10
14.38
0.49
48.07

24,559,995
667,054
1,050,283
519,220,980
480,028,205
484,651,568
133,695,741

475,231,501
483,782,188
29,477,896
38,775,842
1,080,269,268
639,500,724
21,612,434
909,507
642,400,210
264,228,004
657,526,144
892,683,376
57,838,517
1,404,416,926
29,753,985
341,721,553
233,476,738
108,421,438
24,767,669
61,737,393
2,407,806
(11,692)
72,586
155,063,394
516,620,463
624,508,581
172,767,050
5,889,990
51,002,358
(1,274,892)

41.25
1.76
50.00
48.99
51.52
43.41
1.26
45.00
36.44
40.00
34.11
51.52
7.52
40.02
0.01
40.37
34.36
30.07
2.68
40.00
2.36
0.08
7.50
32.75
37.55
55.00
6.34
42.50
45.00
0.05

12,280
667
14
254,937,501
69,017,495
2,381,239
64,264,150
-
196,031,700
8,515,315
14,738,948
18,995,550
556,526,974
277,609,074
271,788
409,278
234,115,048
105,691,202
224,269,136
459,882,803
4,349,456
562,034,673
2,975
137,949,642
80,232,067
32,602,326
663,774
24,694,957
56,884
(9)
5,444
50,783,262
193,990,984
343,479,726
10,953,431
2,503,246
22,951,062
(637)

Total

3,622,062,715

3,954,923,425

b. Minority shareholders’ participation in the net income of the Company’s subsidiaries as of each year-end is as

follows:

Year-ended December 31, 2000

Year-ended December 31, 2001

Company

Autopista Los Libertadores
Cam Argentina S.A.
Cam Colombia S.A.
Capital de Energía S.A.
Central Hidroeléctrica Betania S.A.
Central Cachoeira Dourada
Central Costanera S.A.
Central Termoeléctrica Buenos Aires S.A.
-
Cía. do Electricidade do Río do Janeiro
Chilectra S.A.
Cía. Eléctrica San Isidro S.A.
Cía. Peruana de Electricidad S.A.
Codensa S.A.
Companhia Energetica Do Ceara - Coelce
Compañía Eléctrica del Río Maipo S.A.
Constructora y Proyectos Los Maitenes S.A.
Edegel S.A.
Edelnor S.A.
Edesur S.A.
Emgesa S.A.
Empresa Eléctrica Pangue S.A.
Endesa
Endesa Argentina S.A.
Generandes Perú S.A.
Hidroeléctrica El Chocón S.A.
Hidroinvest S.A.
Inecsa 2000 S.A.
Infraestructura 2000 S.A.
Ingendesa S.A.
Inmobiliaria y Constructora Stgo. 2000 Ltda.
Inmobiliaria Centro Nuevo Ltda.
Inversiones Distrilima S.A.
Investluz
Luz de Bogotá S.A.
Pehuenche S.A.
Soc. Agrícola de Cameros Ltda.
Soc. Agrícola Pastos Verdes Ltda.
Túnel El Melón S.A.

Net
Income
ThCh$

135,873
197,055
(55,003)
20,230,464
(6,719,783)
23,307,773
16,043,071
950,353

(4,930,306)
65,015,793
2,403,992
1,916,830
20,976,637
18,367,800
9,869,354
(45,007)
32,830,769
11,175,926
58,524,553
36,585,243
(2,012,815)
111,577,566
3,587,403
34,166,265
9,730,502
2,831,660
98,621
436,948
904,445
2,607
(1,407)
7,701,062
(7,064,924)
10,229,443
(6,159,340)
(1,806)
(56,112)
(2,073,785)

Participation
%

Total
ThCh$

0.05
0.10
0.001
49.00
14.38
1.16
48.32
22.17

41.25
2.03
50.00
49.00
51.52
43.41
1.61
45.00
30.16
40.00
34.11
51.52
7.52
40.02
0.01
45.74
34.81
30.07
2.68
40.00
2.36
7.50
0.08
32.75
37.55
55.00
7.45
42.47
45.00
0.05

68
197
(39,742)
9,912,928
(966,157)
271,147
7,752,011
210,693

(3,445,356)
17,543,802
1,201,997
939,247
11,947,829
7,973,514
1,464,494
(20,253)
9,900,611
4,470,370
21,101,585
18,846,944
(151,364)
44,652,310
359
15,626,624
3,387,188
851,480
2,643
174,779
21,367
196

2,522,098
(2,652,880)
5,626,193
(458,871)
(767)
(25,249)
(1,037)

Net
Income
ThCh$

43,780
(1,387,142)
402,696
8,351,781
(8,413,609)
25,089,146
(11,230,971)
-

(3,301,312)
71,053,639
(98,331)
2,985,048
22,134,848
13,048,931
8,992,219
(480,492)
27,802,116
18,128,290
81,242,223
18,249,066
6,377,221
70,058,270
(10,508,051)
27,115,992
8,669,848
2,559,227
31,360
967,254
848,232
2,683
-
11,982,797
(11,379,476)
11,188,397
4,819,025
10,661
2,942,867
(1,876,100)

Participation
%

Total
ThCh$

0.05
0.10
0.001
49.10
14.38
0.49
48.07
-

41.25
1.76
50.00
49.00
51.52
43.41
1.36
45.00
36.44
40.00
34.11
51.52
7.52
40.02
0.01
40.37
34.81
30.07
2.68
40.00
2.36
7.49
-
32.75
37.55
55.50
6.34
42.50
45.00
0.05

22
(1,387)
5
4,100,725
(1,209,692)
123,271
(5,398,443)

(1,361,782)
1,341,797
(49,166)
1,462,674
11,403,305
5,664,577
130,032
(216,221)
10,132,148
7,251,316
27,710,112
9,401,353
479,567
28,036,672
(1,051)
10,946,460
3,017,974
769,560
840
386,902
20,039
201
-
3,924,366
(4,272,993)
6,153,618
305,526
(68,281)
1,324,289
(938)

Total

178,640,998

121,507,397

1
1

4
4

/
/

Note 22

Shareholders’ equity:

Issuance

As of October 10, 2000, the Company ﬁ nalized a private offering of shares, which commenced September 11, 2000,

issuing a total of 1,491,020,100 shares for total proceeds of ThCh$ 292,794,395 or US$ 520,000,000.

b. Dividends

There are no restrictions on the payment of dividends. The following dividends were paid as of each period-end:

Dividend
Number

Payment date

Historical value
Ch$ per share

Type of dividend

Related to

April 2001

1.806391

Final

2000

Number of shares

As of December 31, 2001

Number of shares

Series

Subscribed

Paid

With voting rights

First

8,291,020,100

Subscribed and paid capital is as follows as of the year-end:

Series

First

As of December 31, 2001

Capital subscribed

Capital paid

ThCh $

ThCh$

729,328,347

e. Net losses from operations and accumulated net earnings (losses) of development-stage subsidiaries are as

follows:

Company

As of December 31, 2001

Net Earnings (Losses)

Of the period

Accumulated

ThCh$

Central Termeléctrica Fortaleza S.A.

Empresa Nacional de Electricidad S.A.

(352,381)

(47,006)

(352,381)

44,287

Total

(399,387)

(308,094)

f. Other reserves

Other reserves are composed of the following as of December 31, 2001:

Accumulated net losses of development - stage subsidiaries
Reserve for variations in equity
Reserve for accumulated conversion differences

Total

As of December 31,
2001
ThCh$

(308,094)
2,318,686
24,373,947

26,384,539

Detail of changes in the cumulative translation adjustment are as follows for the year ended December 31, 2001:

Initial
Balance
ThCh$

Reserve
for Assets
ThCh$

Reserve for
Liabilities
ThCh$

Final
Balance
ThCh$

Cumulative translation adjustment

5,082,010

129,217,211

(109,925,274)

24,373,947

Total

5,082,010

129,217,211

(109,925,274)

24,373,947

The changes in the cumulative translation adjustment due to gains and losses on assets and liabilities for the year ended

December 31, 2001 are as follows:

Distrilec Inversora S.A.
Inversiones Distrilima S.A.
Cía. Peruana de Electricidad S.A.
Edesur S.A.
Cía. de Electricidade do Río de Janeiro
Luz de Bogotá S.A.
Investluz
Endesa Market Place
Central Termoelétrica Fortaleza S.A.

Total

As of December 31,
2001
ThCh$

1,194,316
1,988,910
3,646,102
7,704,951
4,083,256
1,366,696
4,445,832
100,857
(156,973)

24,373,947

1
1

6
6

/
/

Note 23

Other income and expenses:

The detail of other non-operating income in each year is as follows:

Adjustments to investments in related companies
Gain on sale of property, plant and equipment
Gain on forward contracts and swaps
Services to companies and customers
Penalties charged to contractors and suppliers
CDEC-SING power settlement gain
Gain on sale of investments (1)
Cost recoveries
Recoverable taxes
Effect of application of BT 64 (2)
Comahue fourth line income
Gain on repurchase of bonds
Other

Year ended December 31,

2000
ThCh$

11,209,486
95,670,427
7,518,624
30,446,760
5,928,996
8,091,340
202,046,395
12,406,174
4,081,070
43,038,825
12,652,645
-
16,910,561

2001
ThCh$

8,425,321
12,471,667
17,303,868
22,538,187
14,700,345
6,298,308
3,071,188
6,164,200
7,880,395
56,094,130
399,371
23,410,527
12,149,474

Total

450,001,303

190,906,981

(1) Before taxes
(2) These amounts correspond to the net adjustments related to the translation of ﬁ nancial statements of foreign afﬁ liates from the
respective local country currency to US dollars. As discussed in Note 2(d), the Company used an exchange rate of 1.7 Argentine
pesos to the US dollar for ﬁ nancial statement accounts as of December 31, 2001. The Company has direct and indirect investments
in Argentina, which are recorded according to the Chilean Association of Accountants, Technical Bulletin No. 64. These investments
represent 14.3% of total assets, 26.9% of total revenues, and 20.8% of total operating income. The application of SVS Circular No. 81
for the Company’s Argentine subsidiaries, amounted to a charge of approximately US$3,000,000, net of minority interest.

Other non-operating expenses in each year are as follows:

Adjustments to investments in related companies
Cost of sales – materials
Cost of projects, inspections and other
Effect of application of BT 64 (2)
Contingencies and litigation
Deferred expense amortization
SIC power settlement loss
Loss on forward contracts
Pension plan expense
Penalties and ﬁ nes
Other

Year ended December 31,

2000
ThCh$

10,746,456
5,321,069
22,234,627
4,685,633
9,647,802
28,803,537
9,487,263
3,159,830
6,025,008
2,594,321
12,721,686

2001
ThCh$

2,118,353
14,375,298
8,048,850
33,523,957
34,139,791
4,712,409
9,174,807
22,888,497
21,754,812
15,206,939
11,088,492

Total

115,427,232

177,032,205

Note 24

Price-Level Restatement:

The (charge) credit to income for price-level restatement as of each year-end is as follows:

As of December 31,

2000
ThCh$

2001
ThCh$

Assets
Inventory
Current assets
Accounts receivable from subsidiaries
Fixed assets
Investment in subsidiaries
Investment in other companies
Amortization of goodwill
Other assets
Credit to income statement for asset accounts
Net credits from assets

280,611
13,007,196
4,913,981
99,753,518
7,649,844
2,791,103
35,813,492
20,741,732
6,282,755
191,234,232

Liabilities and Shareholders’ equity
Shareholders’ equity
Current and long-term liabilities
Minority interest
Accounts payable to subsidiaries
Non-monetary liabilities
Charge to income statement for liability and shareholders’ equity accounts

(37,305,988)
(124,518,645)
14,803,241
(50,290,063)
204,268
(8,934,805)

659,997
84,296
4,442,082
67,580,431
4,694,240
24,997,762
26,822,216
24,370,396
8,351,108
162,002,528

(33,744,187)
(108,276,041)
22,357,727
(29,657,462)
(659,450)
(9,911,391)

Net charges from liabilities and shareholders’ equity accounts

(206,041,992)

(159,890,804)

Net credits (charges) to income

(14,807,760)

2,111,724

1
1

8
8

/
/

Note 25

Foreign currency translation:

The (charge) credit to income for foreign currency translation as of each year-end is as follows:

Assets

Liabilities

Current assets

Currency

As of December 31,

2000
ThCh$

2001
ThCh$

Current liabilities

Currency

Cash

Time deposits

Marketable securities

Accounts receivable, net

Other accounts receivable, net

Inventory

Prepaid expenses

Other current assets

Non-current assets
Long-term receivables

Amounts due from related companies

Deferred expenses

Other Assets

Forward contracts and swaps

US$
Other

US$

Other

US$

Other

US$

Other

US$

Other

US$

Other

US$

Other

US$
Other

US$

(63,704)
(260)

1,452,351
(54,651)

Short-term debt due to banks
and ﬁ nancial institutions

196,392

Current portion of long-term debt

25,195

(75,135)

due to banks and ﬁ nancial institutions

11,454,143

(1,831)

101,067

(47,246)

Current portion of bonds payable

Current portion of notes payable

21,108

1,091,930

Dividends payable

79,364

50,966

(11,480)

Account payable

152,338

164,064

Notes payable

(2,296)

277,027

11,185,514

Miscellaneous payables

9,414

(256,752)

Other current liabilities

Accrued expenses

Deferred income

Long-term liabilities
Due to bans and ﬁ nancial institutions

(17,968)
1,523

1,023,441
269,093

6,201,890

16,537,140

1,013,659

239,669

Bonds payable

27,510,759

Notes payables

27,303,869

34,962,341

Accounts payable

Other long-term liabilities

US$

Other

US$
Yen

Other

US$

Other

US$

Other

US$

Other

US$

Other

US$

Other

US$

Other

US$

Yen

Other

US$

As of December 31,

2000
ThCh$

2001
ThCh$

(357,394)

(6,625,198)

(238,830)

(1,835)

(290,473) (2,278,463)
25,485

(61,718)

(3,719,994)

(465,275)

(1,384,555)

18,570

276,421

187,774

(298,816)

(79,511)

(528,591)

(417,755)

(38,444) 189,714

(3,341)

(894,814)

(11,575)

36,617

(29,075)

(55,126)

(13,543,112) (40,845,317)

28,582

22,175

898

(239,731)

(12,907,392) (50,519,854)

(2,171,656)

(6,538,747)

(217,349)

(966,616)

(5,483,599) (21,568,881)

Total (loss) gain

35,003,455 105,789,479

Total (loss) gain

(36,218,719) (135,752,062)

Net charges to income

(1,215,264) (29,962,583)

Other

(2,743)

28,665

Note 26

Bond issuance costs:

The bond issuance costs related to the registration and issuance of the Enersis S.A. Series B-1 and Series B-2 Bonds incurred

as of December 31, 2001 are as follows:

Series B-1
ThCh$

Series B-2
ThCh$

Series E-1, E-2
ThCh$

Series F
ThCh$

Total
ThCh$

Registration taxes
Broker commission
Other issuance costs

780,373
104,050
19,630

487,782
50,811
12,268

1,167,376
165,989
-

291,844
41,497
-

2,727,375
362,347
31,898

Total

904,053

550,861

1,333,365

333,341

3,121,620

Bond issuance costs are included in Other Current Assets and Other Assets, and will be amortized over the life of the bonds.

The amortization period for the Series B-1 is 8 years, Series B-2 and Series F is 21 years, and Series E-1 and E-2 is 6 years,

respectively.

Note 27

Supplemental cash ﬂ ows disclosure:

Further detail of the Statement of cash ﬂ ows for each year is as follows:

Detail of other receipts from investments:

Payment to Cono Sur from Graña and Montero
Proceeds from sale of Transelec
Other

As of December 31,

2000
ThCh$

2001
ThCh$

4,015,549
193,473,192
10,976,767

-
-
13,277,523

Total

208,465,508

13,277,523

Detail of other investment disbursements:

Disbursements for highway construction costs
Disbursements for bond repurchases
Other

26,317,670
-
5,772,180

8,925,575
170,583,474
2,909,422

Total

32,089,850

182,418,471

1
1

2
2

0
0

/
/

Note 28

Financial derivatives:

As of December 31, 2001 the Company and its subsidiaries held the following ﬁ nancial derivative contracts with ﬁ nancial

institutions with the object of decreasing exposure to interest rate and foreign currency risk according to the following detail:

Type
(1)

Nominal
Amount
US$

Date of
Maturity

Item

Sales/
Purch.

Hedged
Item

As of December 31, 2001
Closing
Initial
Hedged
Hedged
Amount
Amount
ThCh$
ThCh$

FR
FR
FR
FR
FR
FR
EO
EO
EO
EO
EO
EO
EO
EO
S
S
S
S
S
S
S
S
S
S
S
S
S
S
S
S
S
S
S
S
S
S

214,000,000
198,850,000
164,000,000
125,000,000
28,550,000
3,000,000
50,000,000
50,000,000
27,500,000
50,000,000
50,000,000
275,000,000
125,000,000
50,000,000
46,630,000
20,360,000
156,390,000
100,000,000
100,000,000
13,400,000
50,000,000
3,330,000
119,530,000
104,560,000
3,330,000
3,100,000
92,163,783
2,840,000
383,110,000
41,930,000
50,000,000
144,470,000
3,330,000
40,550,000
14,920,000
3,330,000

I Quarter 02
I Quarter 02
I Quarter 02
I Quarter 03
II Quarter 02
I Quarter 02
II Quarter 04
II Quarter 04
II Quarter 05
II Quarter 06
II Quarter 06
III Quarter 04
III Quarter 04
III Quarter 05
I Quarter 02
I Quarter 02
I Quarter 03
I Quarter 03
I Quarter 03
I Quarter 04
I Quarter 04
II Quarter 02
II Quarter 02
II Quarter 02
II Quarter 03
II Quarter 03
II Quarter 09
III Quarter 02
III Quarter 03
III Quarter 04
III Quarter 04
III Quarter 06
IV Quarter 02
IV Quarter 02
IV Quarter 02
IV Quarter 03

Exchange rate
Exchange rate
Exchange rate
Exchange rate
Exchange rate
Exchange rate
Interest rate
Interest rate
Interest rate
Interest rate
Interest rate
Interest rate
Interest rate
Interest rate
Exchange rate
Interest rate
Exchange rate
Interest rate
Interest rate
Exchange rate
Interest rate
Exchange rate
Exchange rate
Interest rate
Exchange rate
Exchange rate
Currency
Exchange rate
Exchange rate
Exchange rate
Interest rate
Currency
Exchange rate
Exchange rate
Interest rate
Exchange rate

(1) Fr = Forward, EO = European Option, S = Swap,
(2) Non-hedging instruments

P
P
P
P
P
P
P/S
P/S
P/S
P/S
P/S
P/S
P/S
P/S
P/S
P/S
P/S
P/S
P/S
P/S
P/S
P
P/S
P/S
P
P/S
P
P/S
P/S
P/S
P/S
P
P
P/S
P/S
P

Bank Obligations and Bonds 140,125,060
126,141,617
Bank Obligations
-
(2)
84,354,436
Bank Obligations
19,981,164
Bank Obligations
1,981,208
Yankee Bonds
32,739,500
Bank Obligations
32,739,500
Bank Obligations
18,006,725
Bank Obligations
32,739,500
Bank Obligations
32,739,500
Bank Obligations
180,067,250
Bank Obligations
81,848,750
Bank Obligations
32,739,500
Bank Obligations
22,250,919
Bank Obligations
13,331,524
Bank Obligations
87,308,888
Bank Obligations
65,479,000
Bank Obligations
65,479,000
Bank Obligations
7,764,030
Bank Obligations
32,739,500
Bank Obligations
1,742,361
Bank Obligations
61,697,218
Bank Obligations
68,464,842
Bank Obligations
1,742,361
Bank Obligations
1,625,702
Bank Obligations
61,749,743
Bonds
1,819,528
Bank Obligations
209,224,267
Bank Obligations
28,419,735
Bank Obligations
32,739,500
Bank Obligations
97,575,960
Bonds
1,742,361
Bank Obligations
13,560,222
Bank Obligations
9,769,467
Bank Obligations
1,742,361
Bank Obligations

140,125,060
130,204,992
-
81,848,750
18,694,255
1,964,370
32,739,500
32,739,500
18,006,725
32,739,500
32,739,500
180,067,250
81,848,750
32,739,500
30,532,858
13,331,524
102,402,608
65,479,000
65,479,000
8,774,186
32,739,500
2,183,064
67,201,098
68,464,842
2,183,064
2,029,849
61,749,743
1,859,604
250,856,597
27,455,345
32,739,500
94,597,715
2,183,064
15,125,649
9,769,467
2,183,064

Note 29

Commitments and contingencies:

Direct guarantees held by third parties:

Guarantee

Subsidiary

Type

Under 1 year

1 to 3 years Over 3 years

Total

ThCh$

Dirección Gral. de Obras Públicas

Autopista del Sol

Contract completion

154,495

496,011

650,506

As of December 31, 2001

Guarantee Released

10,961,804

58,931

10,961,804

58,931

Mortgage security

3,875,883

14,441,428

64,581,238

82,898,549

Banco del Estado de Chile

Pehuenche S.A.

Security deposit

Director Aduana de Chile

Bancos Acreedores

Mitsubishi Corp.

Pangue S.A.

Letter of credit

San Isidro S.A.

Security deposit

Dir. Gral. De Obras Públicas

Autop. Los Libertadores

Contract completion

154,495

Dir. Gral. De Obras Públicas

Autop. Los Libertadores

Contract completion

650,506

Ministerio de Obras y Serv. Publico

Boston

Personal guarantee

Banco del Estado

Túnel El Melón

Sec. De Energia de la Rep. Argentina

EASA

Security deposit

69,246,537

154,495

650,506

2,207,502

1,285,845

60,932,875

Total

4,835,379

25,462,163

198,750,008 229,047,550

Indirect guarantees held by third parties:

Guarantee

Subsidiary

Type

Under 1 year

1 to 3 years Over 3 years

ThCh$

Total

ThCh$

As of December 31, 2001

Guarantee Released

Chase Manhattan Bank

CitbanK N.A.

Midlanbank

B. Santander C. Hispano

J.P. Morgan and CSF Boston

Banco San Paolo

BNP

BBVA

YPF S.A.

Mitsibishi Co.

B. Santander C. Hispano

Chase Manhattan Bank

Banco Español de Crédito

ABN Amro Bank

Endesa Chile Int’l

San Isidro S.A.

Celta S.A.

Warrant

B. Estado de Chile and Santander

Autopista Del Sol S.A.

Warrant

125,820,068

125,787,533

2,133,080

5,912,684

Chase Manhattan Bank

Endesa Colombia S.A.

Warrant

176,774,993

B. Santander C. Hispano

Cono Sur S.A.

Personal Guarantee

Banco Exterior de España

Gasoducto Taltal

Warrant

38,555,260

327,931,354

24,444,620

17,097,871

127,418,895

99,986,433

52,184,585

36,061,757

120,504,758

65,542,037

125,820,068

125,787,533

3,548,599

52,184,585

2,133,080

2,664,352

36,061,757

5,912,684

51,861,623

176,774,993

120,504,758
6,680,297

6,680,297

Total

436,428,358 636,668,887

337,813,554 1,410,910,799

1
1

2
2

/
/

Litigation and other legal actions:

Enersis S.A. Individual

Court : 21st Civil Court of Santiago

Process number : C-2437-1999

Cause : Lawsuit in summary process interposed by the lawyer Mr. Eduardo Rodriguez Guarachi. The lawyer has

represented to the court that Enersis pay him US$ 250,000 for professional services rendered.

Process status: First petition ruling period.

Amounts involved: US$ 250,000.

ii.

Court : International court of the International Chamber of Commerce, París, France

Process number : 11046/KGA

Cause : On May 30, 2000, Pecom Energia S.A. and PCI Power Edesur Holding Limited (together, “Pérez Companc”)

commenced an action against Endesa - Chile, Chilectra and Enersis before the Arbitration Court of the International

Chamber of Commerce, Paris, France. Pérez Companc has petitioned the court to either recognize its alleged right to

nominate both a director and an alternate director in addition to the directors whom it already has the right to nominate;

or to state that Pérez Companc and the Enersis group should each have an equal number of directors in Distrilec Inversora.

Enersis, Endesa - Chile and Chilectra have contested Pérez Companc’s action.

Process status : Final allegations presented, awaiting decision.

Amounts involved : A ﬁ xed amount for the case was set between US$ 180 million and US$ 200 million.

iii.

Court : Honorable resolutive commission

Process number : 577-99

Cause : Requirements of the “Fiscal Nacional Economico” against Enersis S.A. for the increase of ownership in Endesa-

Chile S.A., asserting the transaction has considerably increased the vertical integration in the electric sector, affecting

free competition.

Process status : The discussion stage has ended and the corresponding complaints have been made. The case is now

in the sentencing stage. It is important to note the Commission decided not to receive the case in trial. Additionally,

the petitions of the Fiscalía Nacional Económica have changed since the beginning of the case, limiting the request to

the inability of Enersis S.A. and Endesa Chile to have common directors and the necessity for these companies to hire

different external auditors.

Amounts involved: Undetermined.

iv.

Chilean Internal Revenue Service review on taxable income for the 1999, 2000 and 2001 tax years, and the tax trial in

ﬁ rst petition for the difference of First Category Income Tax and Reintegration of Monthly Tax Prepayments for absorbed

net income in the amount of ThCh$ 62,400, corresponding to the 1998 tax year.

Court : 25th Civil Court of Santiago

Process number : 3151-00

Cause : Complaint ﬁ led for compensation of damages by Mrs. Odette Legrand Halcartegaray against Enersis S.A..

Process status : First petition sentencing stage

Amounts involved: ThCh$ 50,000

vi.

Court : 2nd Labor Court of Santiago

Process number : 6061-2001

Cause : Complaint ﬁ led for severance pay for years of service on December 19, 2001 by Mr. Guillermo Calderón Ortega

against Enersis S.A.

Process status : First petition reconciliation and evidence stage.

Amounts involved: ThCh$ 50,000

Chilectra S.A.

As of December 31, 2001, there are certain complaints against the Company for damages, which management believes

are not signiﬁ cant based on reports from its legal counsel or for which the Company has made provisions up to the

corresponding insurance coverage deductibles.

Compañia Electrica del Rio Maipo S.A.

As of December 2001 and 2000 there are complaints against the Company for compensation of damages, which

Management and its legal counsel believe are not signiﬁ cant since they have insurance coverage for these types of

events.

Inmobiliaria Manso de Velasco S.A.

Court : Arbitration Court

Process number : N/A

Cause : Originates in Mr. Valero’s intention to charge professional fees for measures related to reducing the value of

the Company’s Real Estate Taxes

Process status : First petition resolution, being appealed.

Amounts involved: Ch$ 100 million was claimed. The ﬁ rst petition resolution was for a sum of Ch$ 37 million, which

is being appealed. A provision was made for 50% of the claim.

ii.

Court : Arbitration Court

Process number : N/A

Cause : Inmobiliaria Manso de Velasco Ltda., which jointly owns a piece of real estate with other owners in the community

of La Dehesa, is initiating a proceeding to forcibly liquidate the community.

Process status : Pending decision.

Amounts involved: Undeterminable.

iii.

Court : 25th Courthouse

Process number : 4008 – 98

Cause : Complaint ﬁ led by Agregados Livianos S.A. against Sociedad Agrícola Pastos Verdes Ltda. (a subsidiary of

Inmobiliaria Manso de Velasco S.A.), with the purpose of imposing a mining easement on the Company’s land.

Process status : Final sentence, being appealed before the Santiago Court

Amounts involved: Indemnity of UF 5,800 for each year of effective occupation. The set indemnity has not been

consigned, therefore the legal easement has not been constituted. No provision of any kind is necessary.

iv.

Court : 11th Court

Process number : 5918 – 99

Cause : Complaint ﬁ led by Agregados Livianos S.A. against Sociedad Agrícola Pastos Verdes Ltda. (a subsidiary of

Inmobiliaria Manso de Velasco S.A.), with the purpose of imposing a mining easement on the Company’s land.

Process status : The Judge determined an indemnity that did not satisfy the owner, therefore the pertinent legal actions

were taken, appealed before the Santiago Court

Amounts involved: Undeterminable.

1
1

2
2

4
4

/
/

Court : Court of Appeals

Process number : 4087 - 2000

Cause : Sociedad Agrícola Pastos Verdes Ltda. (a subsidiary of Inmobiliaria Manso de Velasco S.A.), ﬁ led Indemnity

Assessment Complaint Proceeding for expropriation of Access Road to Aeropuerto Arturo Merino Benítez. The Chilean

Government expropriated a piece of land for construction of the access road; experts in accordance with the Expropriation

Procedure appraised the indemnity paid. The Appraisal was protested, there is a ﬁ rst petition judgment that raised the

indemnity by approximately UF 35,000.

Process status : Pending in the Court of Appeals.

Amounts involved: Undeterminable.

vi.

Court : 13th Court

Process number : 44 – 2001

Cause : Expropriation for Construction of San Pablo Junction, San Pablo - Ruta 68 - Américo Vespucio. In conformity

with D.L. 2.186 the provisional indemnity amount established by the Government was contested, commencing the

respective litigations.

Process status : The Government renounced the expropriation, therefore the proceeding has concluded.

Amounts involved: None.

Cam Ltda.

On October 27, 1998, Cam Ltda., was notiﬁ ed of closure by a municipal inspector by municipal decree No. 694 dated

September 15, 1998. To date conversations are taking place with the Municipality of Santiago to revoke such closure.

Cerj S.A.

The Company has civil, ﬁ scal and labor legal proceedings for which it has made a provision of approximately R$ 261

million.

Coelce S.A.

The Company has legal proceedings of a civil, ﬁ scal and labor nature, for which it has recorded provisions of approximately

R$ 20 million.

Edesur S.A.

According to the present litigation, Transportes Metropolitanos General Roca (T.M.G.R.) intends to charge the Company

an annual rental fee for each crossing or stretch of electrical lines parallel to the right of way, existing or future, over

areas destined to railroad service. The Company’s Management and their legal counsel estimate that the outcome of the

stated issue would not have a signiﬁ cant impact on the ﬁ nancial statements taken as a whole.

On December 14, 1999, Edesur ﬁ led a legal complaint against Alstom Argentina S.A. and its representative Alstom

Energietechnik Gmbh for approximately US$ 77 million, in relation to their responsibility in the accident that occurred on

February 15, 1999 at the Azopardo Substation. As of the date of issuance of these ﬁ nancial statements the proceeding is

at the evidence stage, the parties attended, formulated reciprocal oppositions and the judge’s resolution is pending.

Endesa-Chile Individual

Pending litigation

There is litigation pending against Endesa-Chile, for which defenses have been ﬁ led, totaling ThCh$730,260 and

ThCh$2,176,946as of December 31, 2000 and 2001, respectively.

Other litigation

Court : Supreme Court of Argentina

Process number : 2753-4000/97

Cause : Dirección Provincial de Rentas, Provincia de Neuquén versus TGN (Transportadora de Gas del Norte S.A.).

Resolution regarding Stamp Tax sum that eventually should be paid jointly by TGN and ENDESA.

Process status : TGN requested a precautionary measure before the Supreme Court of Argentina to paralyze the

proceeding ﬁ led by the Province of Neuquen, which was accepted. Therefore the administrative complaint proceeding

is paralyzed and does not constitute a contingency for San Isidro S.A.

Amounts involved: $Arg 13,943,572.54 (Includes tax, interest and ﬁ nes).

ii.

Court : Arbitration Court

Process number : N/A

Cause : On December 27, 2001, Empresa Nacional de Electricidad S.A. was notiﬁ ed of an arbitration to resolve

controversies related to insurance policy No. 94.676, issued by Compañía de Seguros Generales Consorcio Allianz,

currently AGF/Allianz Chile Compañía de Seguros Generales S.A., in favor of Endesa, for the construction of the Ralco

Hydroelectric Plant.

Process status : Claimant and the Insurance Company have a period of 20 days to corroborate the complaint.

Amounts involved: Undeterminable.

Endesa-Chile Subsidiaries

Pehuenche S.A.

Court : 20th Civil Courthouse of Santiago

Process number : 5863-2001

Cause : Empresa Eléctrica Pehuenche S.A. versus Empresa Eléctrica Colbún S.A. This complaint is for services rendered

by Pehuenche S.A. to Colbún during the drought period.

Process status : Colbún S.A. was recently notiﬁ ed of the complaint.

Amounts involved: Undeterminable.

ii.

Court : Court of Appeals of Talca

Process number : 39945

Cause : Asociación del Canal Maule versus DGA Resolution 1768 dated November 1984 related to the approval of

reservoir works and building of the Colbún power plant. Pehuenche also ﬁ led a complaint to reinforce the claim of

the irrigation subscribers that it is the obligation of Colbun S.A. to operate a reservoir above an elevation of 425 meters

above sea level.

Process status : Pending resolution.

Amounts involved: Undeterminable.

iii.

Court : Court of Appeals of Talca

Process number : 39945

Cause : Asociación del Canal Maule versus DGA Resolution 1768 dated November 1984 related to the approval of

reservoir works and building of the Colbún power plant. Pehuenche also ﬁ led a complaint to reinforce the claim of

the irrigation subscribers that it is the obligation of Colbun S.A. to operate a reservoir above an elevation of 425 meters

above sea level.

Process status : Pending resolution.

Amounts involved: Undeterminable.

1
1

2
2

6
6

/
/

iv.

Actions were ﬁ led related to the payment of compensation as per Supreme Decree No. 287, dated 1999 and issued by

the Ministry of Economy, Development and Reconstruction and modiﬁ cation of Art. 99 bis of DFL No. 1/82 of Mining

Law.

Court : 24th Civil Court of Santiago

Process number : 3908-99

Cause : A precautionary prejudicial measure was presented and was denied by the Tribunal. In the same proceeding

Pehuenche presented an ordinary public law motion to vacate against Sociedad Austral de Electricidad S.A. Witnesses

gave evidence.

Process status : Expert Appraisal.

Amounts involved: Undeterminable.

vi.

Court : 17th Civil Courthouse of Santiago

Process number : 3940-99

Cause : Pehuenche versus Chilectra S.A. A precautionary prejudicial measure was presented and denied by the Tribunal.

Pehuenche presented in the same case, an ordinary demand to annul public right against Chilectra S.A.

Process status : Expert Appraisal, Appeal of inapplicability Process number 4798-2000 with Supreme Court.

Amounts involved: Undeterminable.

vii. Court : 20th Civil Courthouse of Santiago

Process number : 4005-99

Cause : A precautionary prejudicial measure was presented and denied by the Tribunal. Pehuenche presented in the

same case, an ordinary demand to annul public right against Empresa Electrica Atacama S.A.

Process status : Expert Appraisal.

Amounts involved: Undeterminable.

viii. Court : Santiago Court of Appeals

Process number : 6515-99

Cause : CDEC-SIC failure to provide timely information to the CNE. Resolution 1,557 dated October 1, 1999. The State

Defense Council made itself a party to the case.

Process status : Expert Appraisal.

Amounts involved: Five ﬁ nes for a total of 1,610 UTM.

ix.

Court : 5th Civil Courthouse of Santiago

Process number : 2272-99

Cause : Resolution 631 dated April 27, 1999, for not establishing Dispatch Center before January 1, 1999. The court

informed a resolution that it received the case for trial. Pending ofﬁ cial letter to the Superintendency of Electricity and

Fuels (SEC).

Process status : Pending sentence.

Amounts involved: Fine of 500 UTM.

Court : 16th Civil Courthouse of Santiago

Process number : 4164-97

Cause : Claim against Resolution 856, resulting in a ﬁ ne imposed on October 16, 1997, for failure on May 11, 1997.

Process status : Pending reopening of the ﬁ le.

Amounts involved: Fine of 450 UTM

xi.

Court : 16th Civil Courthouse of Santiago

Process number : 1928-98

Cause : Claim against Resolution 331 dated May 8, 1998, for failure on October 13, 1997.

Process status : Pending reopening of the ﬁ le.

Amounts involved: Fine of 300 UTM

xii. Court : SEC

Process number : N/A

Cause : Reposition appeal before the SEC for Resolution 805 dated May 2, 2000 for a ﬁ ne for failure on July 14, 1999.

Process status : Pending resolution.

Amounts involved: Fine of 400 UTA

xiii. Court : 20th Civil Courthouse of Santiago

Process number : 6549-99

Cause : Inversiones Tricahue with Pehuenche and Endesa. Minority shareholders’ claim.

Process status : Arbitrator declared the document preparation and exhibition stage complete, and before expiry of his

nomination, offered to mediate between the parties in each meeting, pending concretion of measures to avoid the

lawsuit.

Amounts involved: Undeterminable.

xiv. Court : 3rd Local Police Court of Santiago

Process number : 50419-AGO

Cause : SERNAC with Pehuenche, claim for lack of electrical supply

Process status : Pending sentence.

Amounts involved: Undeterminable.

xv. Court : 24th Civil Court

Process number : 1407-2001

Cause : GTD Teleductos S.A. with Pehuenche S.A. Acknowledgement of debt summons. The debt was denied. There

were previous conversations with the commercial manager of the petitioner, who did not authorize the basis of the

invoice.

Process status : Pending sentence.

Amounts involved: ThCh$ 344

xvi. Court : 5th Labor Court of Santiago

Process number : 2923-2001

Cause : Labor lawsuit for work accident. There are incidents of former adjudication and prescription pending verdict.

Second petition verdict conﬁ rming First Petition verdict. Pending conﬁ rmation of appeal for dismissal.

Process status : Pending conﬁ rmation of appeal for dismissal.

Amounts involved: Undeterminable.

Empresa Eléctrica Pangue S.A.

Court: 1st Civil Court of Santiago

Process number : 1294-99

Cause : Claim against Resolution SEC 415 dated March 12, 1999 which ﬁ ned Pangue for not complying with Article 9 of

rationing Decree 640, which is to inform the SEC of normal customer consumption of its customers.

1
1

2
2

8
8

/
/

Process status : Remitted the ﬁ le to the Santiago Court of Appeals.

Amounts involved: Fine of 10 UTM.

ii.

Court: 1st Civil Court of Santiago

Process number : 2273-99

Cause : Claim against SEC Resolution No. 631 dated April 27, 1999 that ﬁ ned Pangue for infraction of Article 183 of the

Regulation when it did not build an independent Dispatch and Control Center.

Process status : Reception of case to trial was notiﬁ ed. A motion to set aside was presented against the writ of

evidence.

Amounts involved: Fine of 500 UTM.

iii.

Court: 23rd Court

Process number : 4293-97

Cause : Claim against SEC Resolution No. 856 dated October 16, 1997, which ﬁ ned for a blackout on May 1, 1997.

Process status : Appealed to the Court of Appeals and is pending hearing.

Amounts involved: Fine of 450 UTM.

iv.

Court: 23rd Court

Process number : 1910-98

Cause : Claim against SEC Resolution No. 331 dated May 8, 1998 that ﬁ ned Pangue for a blackout on October 13, 1997.

The Tribunal rejected the recourse in its verdict dated July 30, 1999.

Process status : Appealed to the Court of Appeals and is pending hearing.

Amounts involved: Fine of 500 UTM.

Court: SEC

Process number : N/A

Cause : Appeal to set aside before the SEC by SEC Resolution No. 740 dated April 26, 2000 which ﬁ ned Pangue for

blackout on July 14, 1999.

Process status : Pending motion to set aside verdict.

Amounts involved: Fine of 300 UTA.

vi.

Court: 18th Civil Court of Santiago

Process number : 3886-99

Cause : Ordinary public right annulment complaint. Request to annul obligation to pay compensation to regulated price

users derived from electric rationing decree No. 287 issued by the Ministry of Economy.

Process status : At the evidence stage.

Amounts involved: Undeterminable.

vii. There are 37 administrative oppositions presented by Pangue S.A. before the Provincial Government of Malleco, to the

corresponding requests of diverse individuals to regularize water use rights in the Commune of Lonquimay.

San Isidro S.A.

Court: 7th Civil Court of Santiago

Process number : 2195-99

Cause : Claim against Resolution No. 628 dated April 27, 1999, which applied a ﬁ ne for infraction of Article 183 of D.S.

No. 327 dated 1997. (Non construction of independent Dispatch Center).

Process status : Ofﬁ cial reports are being ﬁ led at the evidential stage.

Amounts involved: Fine of 500 UTM

ii.

Court: SEC

Process number : N/A

Cause : Appeal to set aside before the SEC for SEC Resolution No. 719 dated April 24, 2000, which ﬁ ned San Isidro 150

UTA, for blackout on July 14, 1999.

Process status : Pending reinstatement verdict.

Amounts involved: Fine of 150 UTA

Compañía Eléctrica de Tarapacá S.A.

Court: Customs Court of Iquique

Process number: 97-99

Cause : Pre-trial for customs fraud for alleged infraction by Celta S.A. to General Customs Ordinance in clearing a crane

for the Port of Patache and other merchandise.

Process status : First petition sentencing declared.

Amounts involved: Fine of 5 UTM for each SRF improperly issued

ii.

Court: SEC

Process number: Ofﬁ cial Letter 4966

Cause : Formulation of SEC charges, dated August 3, 2000 for SING blackout on September 23, 1999.

Process status : Pending SEC Resolution.

Amounts involved: Undeterminable.

iii.

Court: 20th Civil Court of Santiago

Process number: 2760-2000

Cause : Veriﬁ cation of Credit in Inmobiliaria La Cascada Agreement for ThCh$ 203,718. There was a ﬁ rst distribution

of funds from the sale of goods.

Process status : Report No. 1 from the Liquidating Commission was received.

Amounts involved: Celta received ThCh$ 60,558.

Ingendesa S.A.

Court: Court of First Petition of Santa Bárbara

Process number: 420-00

Cause : Labor lawsuit for alleged unjustiﬁ ed dismissal

Process status : Court rejected lawsuit, currently being appealed.

Amounts involved: ThCh$ 24,462.

ii.

Court: 8th Work Court of Santiago

Process number: 5085–99

Cause : Labor lawsuit for labor services

Process status : Court rejected lawsuit, appeal expected.

Amounts involved: Undeterminable.

iii.

Court: 4th Work Court of Santiago

Process number: 6224-99

1
1

3
3

0
0

/
/

Cause : Labor lawsuit for alleged unjustiﬁ ed dismissal. The lawsuit requests reincorporation to work, and secondly

payment of alleged pending services rendered.

Process status : The ﬁ rst petition judgment was in favor of Ingendesa and appeal by the claimant is at a recital stage

at the Santiago Court of Appeals.

Amounts involved: Ingendesa has made provisions for the allegedly owed services rendered.

iv.

Court: 4th Work Court of Santiago

Process number: 6224-99

Cause : The claim requests payment of professional fees in the amount of ThCh$ 2,000. The claimant worked as an

attorney at the external counsel’s law ﬁ rm.

Process status: Replied to the complaint, awaiting ﬁ rst petition judgment.

Amounts involved: Undeterminable.

Infraestructura Dos Mil S.A.

Court: Talagante Local Police Court

Process number: 217-00

Cause : Damage indemnity complaint for stoning at the Talagante Overpass

Process status: Pending judgment.

Amounts involved: Approximate amount of ThCh$ 3,840.

Autopista del Sol S.A.

There are lawsuits pending in favor of the company for indemnity claims for damages to the Autopista del Sol. The

total amount is ThCh$ 174,423.

There are lawsuits pending against the company, for which the corresponding defense has been ﬁ led. The total amount

is for ThCh$ 357,000.

Court: Arbitration Commission

Process number: 217-00

Cause : A complaint was ﬁ led due to larger sums that the Autopista del Sol S.A. has had to pay the Treasury to ﬁ nance

the expropriations needed to carry out the works of the concession contract and for greater costs and expenses which

the agent has had to incur to support the expropriation processes carried out by the Ministry of Pubic Works to take

timely material possession of the land required to carry out the works.

Process status: Final judgment was handed down on April 12, 2001, condemning the Ministry of Public Works to pay

Autopista del Sol.

Amounts involved: UF 45,510

Inecsa Dos Mil S.A.

Court: Arbitration Commission

Process number: 3049-2000

Cause : Complaint for annulment of the public right of the bidding called by the Ministry of Public Works for the Northeast

Santiago Access.

Process status: Complaint has been suspended by court resolution

Amounts involved: Undeterminable.

Central Cachoeira Dourada

The Company has made a provision of US$ 213,000 for payment of labor lawsuits.

Hidroeléctrica el Chocón S.A.

Federal Public Revenues Administration – General Tax Services

The Federal Public Revenues Administration – General Tax Services (FPRA-GTS) notiﬁ ed the Company for alleged

tax evasion on revenues earned between tax year 1993 and 1994, due to deduction of certain start-up and ﬁ nancing

costs incurred by Hidroeléctrica el Chocón S.A. in the calculation of taxable income, which the FPRA-GTS considers to

be capitalizable costs to be depreciated in accordance with the terms of the concession. In addition, the FPRA-GTS

claimed that the Company omitted making certain withholding taxes on payments made outside of the country for a

bank loan obtained in 1994. The Company had not made these withholding taxes as it considered that they related to

foreign-source income not subject to taxes.

The corresponding amount of taxes on these revenues in dispute equals approximately US$ 9.7 million, which does not

include accrued interest. The Company is disputing these charges.

On December 28, 2000 the FPRA-GTS notiﬁ ed the Company of Resolution No. 166/00 in the amount of US$ 1,754,938

on withholding taxes for foreign-source incomes. In addition it deemed that the Company should submit US$ 3,987,219

for accrued interest up to December 20, 2000. Finally, the FPRA-GTS assessed a penalty of US$ 1,228,457 for alleged

infraction of Article 45 of Law 11,683. Regarding the complaint against treatment of certain startup and ﬁ nancing expenses,

it prescribed on January 1, 2001.

On December 28, 2000 the Company was notiﬁ ed of Resolution No. 204/00, which ofﬁ cially determined that the tax

credits and debits for the period from December 1993 to July 1995 , equaled to US$ 794,095 for interest assessed

as of December 11, 2000. Additionally, it was resolved to ﬁ ne the Company US$ 1,002,504 for alleged infraction of

Article 45 of Law 11,683. The FPRA-GTS considers the moment at which the Company determined that the taxable

event was generated to be in error, therefore it deems Article 18 of Regulatory Decree of the Value Added Tax Law to

be applicable.

The Company rejected the pretension of the FPRA-GTS to apply Article 18 of the Regulatory Decree of the Value Added

Tax Law to the taxable events mentioned previously, before the date of publication of the regulation in the Ofﬁ cial

Bulletin. They invoked the inconstitutionality of the above-mentioned regulation and the application of decree 493/95,

which condoned interest and ﬁ nes for obligations or infractions overdue or committed as of July 31, 1995. On February

20, 2001, the Company ﬁ led an appeal before the Fiscal Court of the Nation.

Royalties

On June 26, 2000, the Company was notiﬁ ed of a complaint for interest charged for royalties allegedly paid outside the

terms, initiated by the province of Neuquén before the Nation’s Court of Supreme Justice. The complaint includes an

initial amount of approximately US$ 1,574,000.

Additionally, on September 27, 2000 the Company was notiﬁ ed regarding a new complaint from the province of Neuquén

against the National State and hydroelectric generators of Comahue to obtain royalties charged on accumulated funds

in the Sales Account. The mentioned complaint does not state a precise amount or date as of which the sums claimed

are considered as owing, but the action would seek to charge each generator 12% of the funds the plaintiff understands

were contributed by them to the referred account.

Provincial Revenue Service of the Province of Buenos Aires

On September 10, 2001, the Company received the notiﬁ cation from the Provincial Revenue Services of the Province of

Buenos Aires of the beginning of an ofﬁ cial determination for US$ 1,732,564 (amount that does not include interest or

1
1

3
3

2
2

/
/

ﬁ nes), for taxes on gross income for the ﬁ scal periods from February 1995 to December 1998. The differences claimed

originate in: a) lack of presentation of tax in the Province of Buenos Aires between February 1995 and June

1996 for contracts signed by the Company and b) for the use of an estimated tax payment less than what the government

deemed applicable.

Subsequently the Company resorted to a moratorium from the Province of Buenos Aires in which it input the differences

claimed by the government for lack of tax revenue in that province for contracts signed by the Company in the sum of

US$ 642,575, rejecting the differences claimed related to the applied estimated tax payment.

In the opinion of the Company’s Management and their legal counsel the complaints made by the government

organizations mentioned above are not applicable, except for the concepts mentioned in the previous paragraph,

therefore it is not probable that those matters will generate a signiﬁ cant adverse effect on the Company’s shareholders’

equity situation and income as of December 31, 2001.

Edegel S.A.

National Superintendency of Tax Administration – Income Tax and General Sales Tax

As of December 31, 2001, the National Superintendency of Tax Administration (NSTA) has completed its compliance

oversight of tax obligations mainly related to Income Tax and General Sales Tax for the Company’s tax years from 1995

to 1999, and as a result of this oversight, NSTA gave notice in December 2001 through determination resolutions and

ﬁ nes amounting to US$ 86,601,000 (equivalent to ThCh$ 56,705,818) for Income Tax and approximately US$ 732,000

(equivalent to ThCh$ 479,133) for General Sales Tax. In this respect, management ﬁ led an appeals claim against the

mentioned resolutions on January 4 and 7, 2002. Thus, on January 10, 2002 an arbitration process has begun against the

State in which it submits to arbitration the controversy regarding noncompliance by the Peruvian State of its obligation with

respect to the régime of legal stability signed by the company on November 29, 1995. In the opinion of management

and their legal advisors these arbitration processes will be resolved in favor of the Company.

On December 28, 1998, the government published Law 27,034, which in the Seventh Transitory and Final Disposition,

effected 1999, states that “the amount of depreciation corresponding to the greater value attributed to a voluntary

revaluation of assets due to an achieved reorganization is not deductible as an expense under Law 26283, regulatory

and complementary standards”. As indicated, in 1995 the Company signed a 10-year tax legal stability agreement, that

permits it to maintain, among others, the Income Tax regime in force on the date of signing the agreement. In 1995 the

Company reevaluated its property, plant and equipment, which originated a revaluation surplus, as a consequence of

the ruling made under Law 26283 and D.S. 120-94-EF. As of the date of the signing of the agreement, the tax regime

considered tax deductible the expense for depreciation of the greater amount due to revaluation made under Law

26283 and D.S.120-94-EF.

Company management and their external legal counsel consider that the mentioned legal standard is unconstitutional,

since it violates the principle of non-retroactivity of the law stated in Article 103 of the Constitution, which orders that

“no law will have retroactive force or effect”.

Thus, if the NSTA should persist in relation to ﬁ scal years subsequent to 2005, in the application of the mentioned

standard to not acknowledge depreciation taken on revalued asset values, Edegel will have the possibility of formulating

complaints based on the law. Therefore the company has not determined any effect of the application of that legal

standard in their ﬁ nancial statements.

The sworn income tax declaration for 2000 tax year is pending review. Any expense that exceeds the provisions made

to cover tax obligations will be charged to income in year in which the ﬁ nal adjustment is made.

ESSALUD

Lawsuits ﬁ led by (ESSALUD) for payment of contributions under Law Decrees 22482, 19990 and 18846 amounting

to US$ 4,282,000 (equivalent to ThCh$ 2,804,013). In the opinion of management and their legal counsel, these

proceedings will be resolved in favor of Edegal S.A..

Talleres Moyopampa S.A.

Resolutions of Determination and ﬁ nes in the amount of US$ 1,184 (equivalent to Ch$ 775,592) were issued against the

Talleres Moyopampa S.A. for which Edegal S.A. has ﬁ led the corresponding complaints and appeals when the referred

company divided. Said complaints and appeals are pending ﬁ nal resolution by Tax Administration. It is the opinion

of management and their legal advisors that these actions will not have a signiﬁ cant negative effect, independently or

jointly, on the ﬁ nancial position, operating income, or liquidity of Edegal S.A..

Municipality of Huarochiri-Matucana

Resolutions of non-tax ﬁ nes issued by the Municipality of Huarochiri-Matucana for payment of building license in the

amount of US$ 698,000 (equivalent to ThCh$ 457,138). On November 12, 1999 the Superior Court of Justice of Lima

admitted a precautionary measure in favor of the company, ordering the suspension of the coercive collection procedure

of the imposed ﬁ ne. On the 4th, 6th and 16th of October and the 29th of December of 2000, the objections presented

by the company against the mentioned Resolutions were declared to have foundation, which have been appealed by

the Huarochiri-Matucana Municipality. In the opinion of management and their legal advisors, the ﬁ nal resolution will

be in favor of the company.

Edegal’s Workers Syndicate

Complaint ﬁ led by Edegal’s workers syndicate, which seeks that the percentage of participation, which the law sets at 5%,

be risen to 10%, in this way duplicating the payment of proﬁ ts for ﬁ scal years 1994, 1995 and 1996 by approximately US$

4,780,000 (equivalent to ThCh$ 3,129,935). On August 24, 2000 the sentence was issued in the ﬁ rst petition, declaring

the action unfounded. By means of the sentence dated December 12, 2000 (notiﬁ ed November 13, 2001) the Second

Labor Court Room of the Superior Court of Lima annulled the ﬁ rst petition sentence which declared the syndicate’s

action unfounded. The Company ﬁ led a motion to vacate against said sentence, which was not admitted, whereby the

ﬁ le will return to the court for the issuing of a new sentence.

As of December 31, 2001, Generandes Peru’s sworn declarations on the Income Tax Statements from 1997 to 2001, are

presently pending review by the tax authorities. Any major expense which exceeds the provisions made to cover tax

obligations, will be charged to income in the years in which the ﬁ nal liquidations are produced.

Central Hidroeléctrica de Betania S.A.

There are pending lawsuits against the Company in which the corresponding defense actions have been ﬁ led, the

Company registers a provision in the amount of ThCh$ 847,494.

Restrictions:

Enersis S.A.

The Company’s loan agreements establish an obligation to comply with the following ﬁ nancial ratios, on a consolidated

level:

•

The ratio between debt and debt plus equity, not exceeding 0.8;

1
1

3
3

4
4

/
/

•

The ratio between operational cash ﬂ ow and payment of debt interest, not less than 1.7;

•

Net tangible equity not less than UF 27 million;

•

Assets corresponding to companies whose business is regulated, no less than 50% of total consolidated assets.

Chilectra S.A.

The Company does not have any management restrictions or ﬁ nancial covenants during the years ended December

31, 2000 and 2001.

The Company holds long-term energy purchase contracts with Endesa, Gener S.A., Pangue S.A., Colbún Machicura

S.A., Carbomet Energía S.A., Empresa Eléctrica Puyehue S.A. (formerly Pilmaiquén), Sociedad Canalistas del Maipo

and Iberoamerica de Energía IBENER S.A., the terms of which extend subsequent to 2001, in order to ensure its supply

and corresponding cost.

Compañía Eléctrica del Río Maipo S.A.

The Company holds signed energy purchase contracts with Chilectra S.A. and Gener S.A., in order to assure its supply

and corresponding cost.

The Company does not have any management restrictions or ﬁ nancial covenants during the years ended December

31, 2000 and 2001.

Endesa S.A.

On a consolidated level, Endesa must comply with ﬁ nancial covenants and requirements derived from loan agreements

with ﬁ nancial institutions, among which the following are emphasized:

•

Gross Cash Flows equal to or greater than 12% of the average consolidated ﬁ nancial debt for terms longer than one

year, plus short-term bank debt if its term is extendable to more than one year, obtained according to the debt reﬂ ected

in the consolidated ﬁ nancial statements at the closing date of the last four quarters.

•

Gross Cash Flow equal to or greater than 1.7 times the consolidated ﬁ nancial expenses, obtained according to the

expenses reﬂ ected in the consolidated ﬁ nancial statements at the closing date of the last four quarters.

•

The ﬁ nancial debt for terms longer than one year, plus short-term bank debt if its term is extendable to more than one

year, cannot exceed 60% of the sum of shareholders’ equity, plus minority interests, plus the ﬁ nancial debt for terms

longer than one year and short-term bank debt.

Pehuenche S.A.

The Santander Investment Bank Ltd. and the Chase Manhattan Bank N.A., in relation to loans granted to the Company,

place obligations and restrictions on Pehuenche S.A., some of which are of a ﬁ nancial nature, such as: long-term ﬁ nancial

liabilities not exceeding 1.5 times the shareholders’ equity, and a minimum company equity of UF 9,500,000.

Empresa Eléctrica Pangue S.A.

The following is a summary of the main obligations, which Empresa Eléctrica Pangue S.A. must comply with as per

agreements with the ﬁ nancial institutions:

•

Maintain their creditors duly informed regarding the ﬁ nancial situation.

•

Different conditions with the objective of guaranteeing a healthy ﬁ nancial situation. Thus, the institutions have deﬁ nes

some indexes such as restrictions for the payment of dividends and indebtedness, and acceleration clauses. In regard to

the long-term debt limit for loans in cash, for these events, the limit is 2.0 Shareholders´ equity.

•

Insure and maintain insured all assets.

As of December 31, 2000 and 2001 all these obligations have been complied with.

Infraestructura Dos Mil S.A.

As of February 21, 1996, the Company signed a Syndicated Credit Contract with the Banco del Estado, Banco de Chile and

the Banco Santander, in favor of its subsidiary Sociedad Concesionaria Autopista del Sol S.A.. The contract was formed to

ﬁ nance the construction and/or the execution of public works named “Autopista Santiago - San Antonio”, for an amount

of up to UF 3,189,000 with a six-year term, constituting in the favor of the banks who signed the Syndicated Loan Contract

a pledge on all the shares issued by Sociedad Concesionaria Autopista del Sol S.A. belonging to Infraestructura Dos Mil

S.A. Furthermore, due to this credit agreement the following indirect obligations also exist:

•

The Company is obligated to complete and facilitate the conclusion on time and in form of the previously identiﬁ ed work,

comply timely with all obligations imposed by the concession contract with the Department of Public Works, and to sign

and pay for shares for capital increases in its subsidiary in proportion to its current ownership participation.

•

There is a commitment not to diminish its current participation in the ownership of shares issued by Sociedad

Concesionaria Autopista del Sol S.A., until all concession work is deﬁ nitively placed in service. Subsequent to such event,

its participation cannot be less than 51%.

Autopista del Sol S.A.

Derived from ﬁ nancing obtained through ﬁ nancial institutions through the “Opening of Credit and Agreement” contract,

the Company must comply with the obligations and indicators mentioned below:

•

Conclude and facilitate the construction on time and in form, of the applicable portion of the ﬁ scal public works in

concession.

•

Partial and total restriction of every type of dividend distribution during the term of the credit agreement.

•

Capital increase to UF 1,831,000.

•

Recovery of the guaranteed performance bonds that the Ministry of Public Works executed, both during the construction

period and in the operation period.

•

Total restriction on modiﬁ cation of company stock, except with previous authorization from the creditor banks.

Handing over of ﬁ nancial, operating and expropriation information.

Maintain a relationship of debt to equity of no more than 2 to 1.

Maintain insurance coverage as stipulated in the bank agreement.

1
1

3
3

6
6

/
/

•

Hire the services of the engineering company, Ingendesa S.A. to carry out the inspections of the work and submit a

monthly report to the creditor banks.

•

Do not accumulate sanctions from the Ministry of Public Works.

Obtain bank authorization to carry out actions or contracts which involve guarantees in favor of third parties, investments

in related companies or signing of new construction contracts.

Maintain in custody, at a syndicated bank, the guarantees received on behalf of the contractor in charge of the works.

Do not acquire obligations with third parties, except when the object is to pay or prepay the total loan.

Do not agree with the Ministry of Public Works for an early termination to the concession.

The Company has complied with all the aforementioned restrictions and limits.

As of December 31, 2001 the project has had excess costs that reached approximately 16% of the original budget, which

has been ﬁ nanced through the Company’s own resources.

Autopista Los Libertadores S.A.

Autopista Los Libertadores S.A. was established as a Public Works Concession Special Pledge, as deﬁ ned in the Concession

Law, in favor of the Banco de Chile and Bank of Santiago. In accordance to the ﬁ nancing agreement signed on December

29, 1998, the pledge amounts to UF 4,000,000. The object of the mentioned loan is to ﬁ nance a part of the project’s

total investment. Endesa S.A. is the endorsing guarantor and co-debtor for these loans.

Central Costanera S.A.

Central Costanera S.A. is not in compliance with one of the ﬁ nancial ratios established in the Company’s Union credit

agreement. The Company’s management is negotiating a waiver to exempt the Company from this requiremnet. Because

of the non-compliance, the related debt has been classiﬁ ed as short-term in these ﬁ nancial statements.

Edegel S.A.

Financial indicators originated by credit contracts and Bonds Program:

•

Net shareholders’ equity not less than Soles 2,400 million adjusted for inﬂ ation.

EBITDA for the period / Interest expenses from the subsequent period, of no less than 3.5 to 1.0.

Total Financial Debt / EBITDA, not greater than 3.5 to 1.0.

Note 30

Sureties obtained from third parties:

Chilectra S.A.

The Company presents among its current liabilities, guarantees received in cash for the use of temporary connections

by customers of the company in the amounts of ThCh$ 121,027 and ThCh$ 123,112 for the years ended December 31,

2000 and 2001, respectively.

Inmobiliaria Manso de Velasco Ltda.

The Company has received guarantees from contractors and third parties to guarantee jobs and construction of ThCh$

26,042,732 as of December 31, 2001.

Compañía Americana de Multiservicios Uno Ltda.

Deposits and guarantees received by the Company were ThCh$ 128,080 as of December 31, 2001.

Compañía Americana de Multiservicios Ltda.

Deposits and guarantees received by the Company were ThCh$ 988,728 as of December 31, 2001.

Endesa S.A.

The Company has received guaranteed performance bonds from contractors and third parties to guarantee jobs and

construction (mainly the Ralco Project), in the amount of ThCh$ 28,467,566 as of December 31, 2001.

San Isidro S.A.

Deposits and guaranteed performance bonds received of ThCh$ 4,258,356 as of December 31, 2001.

Compañía Eléctrica de Tarapacá S.A.

The Company has received documents in guarantee of ThCh$ 893,944 as of December 31, 2001.

Autopista Los Libertadores S.A.

The Company has deposits and guaranteed performance bonds of UF 73,510 and ThCh$ 27,177 as of December 31,

2001.

Sociedad Concesionaria Autopista del Sol S.A.

The Company has deposits and guaranteed performance bonds of UF 25,713 and ThCh$ 27,341 as of December 31,

2001.

Pangue S.A.

The Company has received from contractors, bank guaranteed performance bonds of ThCh$ 328,070 as of December

31, 2001.

Túnel El Melón S.A.

The Company has submitted documents in guarantee from Banco Santiago for UF 20,000.

1
1

3
3

8
8

/
/

Note 31

Foreign currencies:

As of December 31, 2000 and 2001, foreign currency denominated assets and liabilities are as follows:

Current assets

Account

Cash

Time deposits

Marketable securities

Accounts receivable, net

Notes receivable

Other receivables

As of December 31,

Currency

UF
Ch$

US$
Yen

$ Col.

Soles

$ Arg.

Reales

US$

$ Col.

Soles

$ Arg.

Reales

Ch$

US$

$ Arg.

Ch$

US$

$ Col.

Soles

$ Arg.

Reales

Ch$

US$

$ Col.

Soles

$ Arg.

Reales

Ch$

US$

$ Col.

Soles

$ Arg.

Reales

U.C.

2000
ThCh$

35,380
3,174,324

647,163
-

9,201,241

3,755,499

2,172,985

8,268,990

4,252,848

43,909,969

148,369

16,130,531

12,934,685

4,714

120,108

11,827,883

77,785,606

5,687,239

98,355,073

30,042,478

104,367,200

158,649,619

1,025,659

435,163

374,113

5,074,909

2,598,141

18,268,315

938,723

19,837,648

590,108

3,886,333

15,740,963

962,557

2001
ThCh$

484,319
6,751,948

2,280,485
277

12,263,258

1,829,763

2,177,695

10,764,484

112,597,902

46,091,602

827,380

3,193,573

10,215,013

4,683

192,474

7,302,079

92,842,117

10,115,931

100,510,997

29,788,527

68,022,172

225,640,499

2,948,858

741,077

5,510,489

53,355

2,414,382

3,532,682

10,511,378

8,626,527

18,732,713

1,294,155

2,898,476

17,364,759

1,006,148

Account

Currency

Amounts due from related

companies

Inventories, net

Income taxes recoverable

Prepaid expenses and other

Deferred income taxes

Other current assets

Ch$

US$
$ Col.

Soles
$ Arg.

Ch$

$ Col.

Soles

$ Arg.

Reales

Ch$

$ Col.

Soles

$ Arg.

Reales

Ch$

US$

$ Col.

Soles

$ Arg.

Reales

Ch$

$ Arg.

Reales

Ch$

US$

$ Col.

$ Arg.

Reales

As of December 31,

2000

ThCh$

3,711,673

6,317,842
27,750

76,637
9,365,315

44,455,086

10,670,467

11,093,850

5,616,633

1,300,415

35,049,268

2,814,892

841,028

20,784,306

9,998,761

491

304,942

3,572,360

1,855,894

1,439,618

1,342,132

951,441

11,290,612

3,156,580

15,222,387

16,919,978

116,493,650

769,789

2001

ThCh$

3,658,373

7,053,439
130,076

463,962
6,188,886

43,587,495

12,454,075

13,086,808

4,770,358

1,270,268

32,634,102

1,320,070

208,192

13,362,460

8,310,226

786

649,152

3,274,026

162,591

1,191,776

934,059

7,352,238

4,859,626

1,672,027

16,926,697

123,975

15,047,244

107,646,809

458,265

258,882

1
1

4
4

0
0

/
/

Total current assets

996,648,333

1,128,589,120

Fixed assets

Account

Land

Buildings, Infrasture and
Works in Progress

Machinery and

equipment

Other ﬁ xed assets

Technical appraisal

Accumulated

depreciation

Currency

Ch$
$ Col.

Soles
$ Arg.

Reales

Ch$
$ Col.

Soles

$ Arg.

Reales

Ch$

$ Col.

Soles

$ Arg.

Reales

Ch$

US$

$ Col.

Soles

$ Arg.

Reales

Ch$

$ Col.

Soles

Reales

Ch$

$ Col.

Soles

$ Arg.

Reales

As of December 31,

2000
ThCh$

74,466,518
27,968,791

8,352,102
8,083,400

16,649,238

3,461,795,188
2,603,583,190

945,374,264

1,292,191,193

1,320,265,722

50,218,406

22,076,061

375,852,386

685,119,584

497,767,662

29,347,416

513,568

5,961,046

36,042,919

97,113,713

244,433,522

25,963,542

57,998,074

416,810,362

101,277,140

2001
ThCh$

74,514,339
30,957,731

9,246,249
9,262,877

28,845,436

3,540,927,768
2,925,165,203

1,075,117,074

1,494,615,317

1,597,326,621

51,624,615

23,851,224

407,507,288

715,242,107

571,813,949

50,091,748

333,835

7,763,522

47,763,896

155,291,796

228,203,238

25,867,622

62,873,345

461,460,872

110,485,315

(1,378,564,379)

(1,449,683,385)

(409,467,304)

(748,581,237)

(681,612,434)

(502,715,374)

(546,659,892)

(861,134,630)

(854,828,192)

(649,138,480)

Total property, plant and equipment

8,684,284,279

9,344,708,408

Other assets

Account

Currency

Investments in related
companies

Investments in other
companies

Goodwill, net

Negative goodwill, net

Long-term accounts
receivable

Amounts due from
related companies

Other assets

Ch$
US$
$ Arg.

Ch$
$ Col.
Soles
Reales

Ch$
US$
$ Col.
Soles
$ Arg.
Reales

Ch$
US$
$ Col.
Soles
Reales

UF
Ch$
US$
$ Col.
Soles
$ Arg.
Reales
U.C.

Ch$
US$

UF
Ch$
US$
$ Col.
Soles
$ Arg.
Reales

As of December 31,

2000
ThCh$

96,723,617
56,542,791
68,770

2,089,682
129,049,897
10,099
116,781

861,187,271
177,798,259
47,159,806
2,140,169
28,212,191
186,792,264

(167,281)
(35,770,600)
(78,749,377)
(73,129,567)
(7,980,463)

-
15,034,838
6,362,027
8,440,342
724,136
3,929,226
8,947,874
2,674,262

1,427,568
142,507,800

-
38,319,086
17,883,515
49,661,151
2,867,073
14,897,385
26,261,614

2001
ThCh$

100,487,795
62,042,489
40,598

2,089,692
142,994,940
11,181
109,038

816,476,110
239,870,243
25,796,107
-
-
194,984,978

(152,411)
(35,542,243)
(58,117,877)
(70,449,921)
(8,362,042)

7,988,439
2,877,466
24,950,177
4,158,571
2,384,657
1,957,371
52,728,956
1,889,860

1,428,291
164,268,594

3,555,109
35,926,357
43,114,856
42,535,140
4,079,790
895,067
107,839,767

Total other assets

1,732,032,206

1,914,857,145

Total assets

Account

Total assets by
currency

Currency

UF
Ch$
US$
Yen
$ Col.
Soles
$ Arg.
Reales
U.C.

As of December 31,

2000
ThCh$

35,871
3,489,831,649
504,302,456
-
2,650,728,724
1,019,525,202
1,627,422,715
2,117,481,382
3,636,819

2001
ThCh$

22,987,389
3,465,970,983
751,566,621
277
2,852,983,396
1,130,187,508
1,626,208,267
2,535,354,224
2,896,008

Total assets

11,412,964,818

12,388,154,673

1
1

4
4

2
2

/
/

Current liabilities

Within 90 days

91 days to 1 year

As of December 31, 2001 As of December 31, 2000
Avg Rate
%

Avg Rate
%

Amount
ThCh$

As of December 31, 2001
Avg Rate
%

Amount
ThCh$

Account

Currency

Short-term debt due to
banks and ﬁ nancial

Due to banks and
ﬁ nancial institutions

Promissory notes

Bonds payable

Current portion of
notes payable

Dividends payable

Accounts payable

Notes payable

Miscellaneous payables

UF
Ch$
US$
Euro
$ Col.
Soles
$ Arg.
Reales

UF
US$
Yen
$ Col.
Soles
$ Arg.
Reales
U.P.
Libra
Other

Soles
Reales

UF
US$
Euro
$ Col.
Soles

Ch$
US$
Other

Ch$
$ Col.
Soles
$ Arg.
Reales

Ch$
US$
Euro
$ Col.
Soles
$ Arg.
Reales
Other

Ch$
Reales

UF
Ch$
US$
$ Col.
Soles
$ Arg.
Reales
Other

As of December 31, 2000
Avg Rate
%

Amount
ThCh$

-
160,092,648
128,907,070
-
-
19,055,477
365,498
50,452,708

-
16,027,196
-
-
7,619,386
13,482
5,198,401
-
-
-

-
7.58
7.55
-
-
15.05
6.55
16.30

-
7.33
-
-
10.20
6.55
10.69
-
-
-

-
2,295,349
109,591,416
2,857,937
-
23,977,272
22,085
31,206,909

51,989,755
42,740,798
-
-
-
1,841
5,474,159
-
-
-

-
-
10.98
4.35
-
12.20
6.80
15.50

7.50
5.17
-
-
-
8.60
15.50
-
-
-

15,299,768
2,277,757
70,488,833
-
29,334,983
-
-
-

53,362,896
112,284,850
400,482
5,737,086
-
-
8,040,978
1,010,772
371,527
99,329

6.00
6.40
7.55

12.00

-
-
-

8.50
7.33
1.26
15.50

-
-

11.75
5.26
7.13
5.94

-
-
82,989,297
-
10,953,683
28,348,833
-
-

1,567,983
303,678,157
383,674
-
-
-
1,303,349
1,035,409
382,644
99,700

-
-

4,937,956
-

10.00
-

-
16,635,381

16.00

5,772,858
42,328,262

-
2,691,842
3,300,934
-
-

59,031
12,790,333
-

-
7.50
3.34
-
-

-
7.20
-

936,973
10
53,420
10
191,916

23,081,703
19,707,936
28,832
40,029,407
15,821,569
80,697,080
55,117,155
70,856

351
14,269,865

-
6,451,104
4,460,572
8,942,447
2,609,018
-
6,471,588
-

-
-
-
-
-

-
-
-
-
-
-
-
-

-
-

-
-
-
-
-
-
-
-

-
-
2,001,651
14,122,802
831,583

-
22,922,837
-

470,178
-
35,638
1,402
4,912,957

46,946,307
14,275,070
133,907
19,919,818
18,713,680
43,527,020
91,181,167
-

210
44,105,683

-
14,665,054
6,030,493
8,813,215
3,093,188
102,327
13,137,517
-

-
-
3.34
13.70
10.00

-
7.40
-

14,531,507
38,474,179
-
3,188,309
28,473,037

6.80
7.50
-
15.50
9.61

-
16,417,832
18,430

7.20
9.75

-
-
-
-
-

-
-
-
-
-
-
-
-

-
-

-
-
-
-
-
-
-
-

1,774,999
2,782,259
-
2,154
-

10,635,902
776
-
3,030,351
-
-
-
18,926

-
-

-
1,651,184
-
182,194
-
6,319
-
82,208

-
-
-
-
-

-
-
-
-
-
-
-
-

-
-

-
-
-
-
-
-
-
-

12,492,145
31,569,607
-
-
-

87,663
8,204,582
-

1,384,632
-
-
-
-

4,202,759
1,690,000
-
8,720,835
1,967,821
-
-
134,529

-
-

81,878
152,295
69,896
69,598
-
4,267
-
-

-
-
10.98
-
15.00
12.20
-
-

7.50
6.15
0.90
-
-
-
15.50
5.32
5.38
4.44

6.92
18.13

11.80
14.87
-
-
-

-
7.20
-

-
-
-
-
-

-
-
-
-
-
-
-
-

-
-

-
-
-
-
-
-
-
-

Account

Currency

As of December 31, 2000
Avg Rate
%

Amount
ThCh$

As of December 31, 2001 As of December 31, 2000
Avg Rate
%

Avg Rate
%

Amount
ThCh$

As of December 31, 2001
Avg Rate
%

Amount
ThCh$

Within 90 days

91 days to 1 year

Amounts payable to
related companies

Accrued expenses

Withholdings

Income taxes payable

Deferred income

Customer advances

Other current liabilities

Total current liabilities by
currency

-
-
-
-
-
-

-
-
-
-
-
-
-
-

-
-
-
-
-
-

-
-
-
-

-
-

-
-
-
-
-
-
-

UF
Ch$
US$
$ Col.
Soles
$ Arg.

UF
Ch$
US$
$ Col.
Soles
$ Arg.
Reales
Other

Ch$
$ Col.
Soles
$ Arg.
Reales
Other

UF
Ch$
US$
$ Col.

UF
Ch$

UF
Ch$
US$
$ Col.
Soles
$ Arg.
Reales

UF
Ch$
US$
Euro
Yen
$ Col.
Soles
$ Arg.
Reales
U.P.
Libra
Other

-
9.67
6.37
-
-
-

-
-
-
-
-
-
-
-

-
-
-
-
-

-
-
-
-
-
-

-
-
-
-

-
-

2.70
-
-
-
-
-
-

11,711,657
3,257,409
528,493
14,053,669
1,193,192
343,401

-
11,351,651
139,144
6,893,007
512,534
5,488,314
24,371,801
-

6,967,550
1,378,501
3,866,571
27,926,903
23,578,706
-

13,034,967
15,714,970
1,313,182
14,668,326
27,302,183
-

-
5,142,418
-
220,013

-
-

31,242,747
455,021
-
1,853,508
36,302
31,846,399
5,375,740

42,954,404
230,830,826
185,252,586
3,329,766
-
89,085,532
52,080,651
161,349,413
212,330,063
-
-
70,856

16,785,722
312,022
513,143
-
1,783,958
7,295,965

-
15,738,918
-
4,977,736
1,601,339
4,399,586
25,742,499
-

5,710,387
1,777,384
2,461,130
16,618,672
24,868,783
-

417,935
15,128,924
154,356
9,895,238
32,199,233
-

245,604
1,454,249
399,688
-

-
-

109,869,724
67,088
1,158,571
2,545,035
44,024
13,085,698
11,654,844

178,890,805
88,077,697
197,632,016
4,993,495
-
67,284,914
57,634,124
94,949,834
284,483,751
-
-
-

-
9.14
8.49
-
-
-

-
-
-
-
-
-
-
-

-
-
-
-
-
-

-
-
-
-

-
-

-
-
-
-
957,044
-

-
19,561,702
-
2,793,947
260,401
-
-
49,089

1,840,548
-
-
-
-
20,700

40,598,181
2,825,312
-
-
-
84,973

-
5,312,543
-
-

-
-

-
-
-
-
-
-

-
-
-
-
-
-
-
-

-
-
-
-
-

-
-
-

-
-

2.70
-
-
-
-
-
-

82,218,149
4,479,446
-
556,267
8,111,431
119
-

2.70

-
-
-
-
-
-

165,412,320
88,132,262
237,666,470
-
400,482
50,430,708
37,801,913
8,592
24,676,359
1,010,772
371,527
373,655

-
-
-
3,523,412
-
-

8,131
20,158,347
181,374
3,125,981
1,658,641
-
-
-

949,656
-
-
-
-
-

8,775,666
2,862,659
5,598,049
-
-
-

-
3,573,294
5,312,179
-

-
-

6,901
5,648,188
-
999,557
5,551,576
77
-

14,157,038
44,932,500
433,695,092
-
383,674
30,255,725
48,897,778
4,344
43,631,611
1,035,409
382,644
234,229

Total current liabilities

977,284,097

973,946,636

606,285,060

617,610,044

1
1

4
4

/
/

Long-term liabilities, December 31, 2001

Account

Currency

1 to 3 years

3 to 5 years

Amount
ThCh$

Avg Rate
%

Amount
ThCh$

Avg Rate
%

5 to 10 years
Amount Avg Rate
ThCh$

More than 10 years
Avg Rate
Amount
%
ThCh$

Due to banks and
ﬁ nancial institutions

Bonds payable

Notes payable

Accounts payable

Amounts payable to
related parties

Accrued expenses

Deferred income taxes

Reimbursabe employee
taxes

Other liabilities

Total long-term liabilities
By currency

UF
US$
Yen
Reales
U.P.
Libra
Other

UF
US$
Euro
$ Col.
Soles

US$
Reales

UF
Ch$
US$
$ Col.
Reales

UF
US$

Ch$
$ Col.
Reales

Ch$

UF
Ch$
Soles

UF
Ch$
Soles
$ Arg.
Reales

UF
Ch$
US$
Euro
Yen
$ Col.
Soles
$ Arg.
Reales
U.P.
Libra
Other

19,593,691
133,119,934
379,814
2,447,725

6.93
4.01
0.90
12.00

80,007,109

4.04

20,304,640

4,281,342

10.93

1,121,113

36,745,055
1,580,101,125
759,628
14,574,825
1,996,683
721,914
189,852

19,325,503
190,607,144
249,605,948

7.44
4.01
0.90
12.00
5.32
5.38
4.44

6.30
7.90
3.34

360,957
94,926

119,935,962
242,272,300

5.38
4.44

6.30
7.90

-
-

- 126,275,921
- 34,983,753

53,987,031
34,606,367

7.13
10.27

41,130,295
4,456,902

13.70
7.50

7.13
10.27

75,330
2,060,718
22,812,102
430,306
8,162,265

-
-

6.50

-
-

956,291,278
16,239,944

4.90
7.07

-
-
-
-
-

-
-

2,394,342

8,675,629

-
2,426,496
- 16,489,740
139,604,470

10.00

-
-
-
-
-

-
-

-
-
-

52,844,488
235,724,400

6.30
7.90

46,798,477
906,947,665

-
-
-

69,008,816
9,684,415

7.13
10.27

14,278,266

-
-
-
-
-

-
-

-
-
-
-
-

-
-

176,310
17,870

-
-
-

-
-

-
1.75
-
10.93
-
-
-

6.30
7.90
-
-
-

7.13
-

-
-
-
-
-

-
-

4,746,079

-
6,218,531
- 39,548,006
5,724,909

10.00

9.50
-
10.00

10.00

1,733,874

-
-
-

-
-
-
-
-

9,955,807

5,312,315

13,305,588

6,435,964

7,308
4,241,649
3,021,814

492
10,353,717
2,964,629
8,489,247
729,238

1,012,444,966
29,006,233
1,863,747,546
249,605,948
759,628
430,306
5,986,443
8,489,247
66,748,324
1,996,683
721,914
189,852

-
-
-

-
-
-
-
-

8,843
2,071,694
352,179

1,083,895

1,451,410

-
-
-

-
-
-
-
-

466,591
860,714
1,963,382

2,401,395

1,589,418

10.00

-
-

-
-
-
-
-

2,318,705

-
-
-
-
-

139,538,496
10,894,400
416,522,529

379,814
142,765,661
35,335,932
1,451,410
146,509,097

360,957
94,926

53,311,079
21,313,776
384,740,325

-
-
-

1,963,382
1,589,418
15,699,631

-
-
-

46,974,787
14,991,070
941,530,571

-
-

39,548,006

-
-

6,846,022

-
-
-

Total long-term liabilities

3,240,126,890

893,853,222

478,617,611

1,049,890,456

Long-term liabilities, December 31, 2000

Account

Currency

1 to 3 years

3 to 5 years

Amount
ThCh$

Avg Rate
%

Amount
ThCh$

Avg Rate
%

5 to 10 years
Amount Avg Rate
ThCh$

More than 10 years
Avg Rate
Amount
%
ThCh$

Due to banks and
Financial institutions

Bonds payable

Notes payable

Accounts payable

Amounts payable to
Related companies

Accrued expenses

Deferred income taxes

Client advances

Other long-term liabilities

Total long-term liabilities
by currency

UF
US$
Yen
$ Arg.
Reales
U.P.
Libra
Other

UF
US$
Euro
$ Col.
Soles

US$
Reales

Ch$
US$
$ Col.
Reales

UF
US$

Ch$
$ Col.
Soles
Reales

Ch$
$ Arg.

UF
Ch$
Soles

Ch$
Soles
$ Arg.
Reales

UF
Ch$
US$
Euro
Yen
$ Col.
Soles
$ Arg.
Reales
U.P.
Libra
Other

52,434,027
1,239,432,391
982,894
13,485
20,833,405
2,367,343
840,638
228,360

4,142,138
100,543,636
225,454,317

8.50
7.33
1.26
6.10
10.69
5.26
7.13
5.94

6.80
7.50
3.34

4,265,802
133,685,561
589,736
8,128
7,441,710
502,163
504,383
137,017

8.50
7.33
1.26
6.10
10.69
5.26
7.13
5.94

2,598,495
83,778,001

8.50
7.33

87,069,066

-
-

4,052,201

10.69

1,823,491

-
-
-

4,724,622
88,714,973

6.80
7.50

14,532,120
242,487,592

6.80
7.50

1,153,294,642

-
-

20,271,120

15.50

70,439,906
821,388

15.50
9.61

-
-
-

43,202,481
13,349,522

7.20
8.64

34,815,944
23,923,520

7.20
8.64

73,868,130
15,176,675

7.20
8.64

23,616,398
534,142

8.90

-
-

-
-
-
-

-
-

-
-
-

-
-
-
-

785,620
10,829,422
382,615
2,013,654

8.00

-
-

1,033,330,967
17,406,657

6.06
7.24

348,564
11,973,927
320,617

-
-

3,133,607

26,127
16,850

-
-
-
-

3,542,855
14,650,160

-
-

5,146,844
683,155

6,643
6,048,313
3,548,331

1,183,932
2,353,666
8,846,299
7,458,911

1,089,913,775
16,298,316
1,411,414,587
225,454,317
982,894
382,615
5,928,124
9,542,939
43,672,342
2,367,343
840,638
228,360

-
-

2,089,242
508,538

-
-
-

-
-
-
-

8,037
3,807,706
522,624

1,902,439
1,176,835
2,147,998

8,998,461
11,690,806
269,190,405

589,736
35,241,897
1,699,459
2,664,664
31,365,230
502,163
504,383
137,017

379,737

893,831

-
-

-
-
-
-

-
-

198,679

-
-
-

-
-

6,857,182

-
-

60,027,732

-
3,471,182
- 31,046,692
-
-

-
-

3,717,566
1,097,452

566,364
1,835,299
2,090,092

1,819,663

2,342,503
895,288

17,696,979
14,609,447
400,133,723

-
-

71,333,737
2,911,480
3,439,955
80,151,896

-
-
-

-
-

-
-
-

-
-
-
-

6,110,376
637,203

3,600,690

1,323,860

-
-
-

14,704,787
1,263,980,106

-
-

31,046,692

637,203
2,357,633

-
-
-

-
7.33
-
-
10.69
-
-
-

-
7.50
-
-
-

7.20
8.64

-
-
-
-

-
-

-
-
-
-

-
-

-
-
-

-
-
-
-

1
1

4
4

6
6

/
/

Total long-term liabilities

2,807,026,250

362,584,221

590,277,217

1,312,726,421

Note 32

Sanctions:

Chilectra S.A.

During 2001, the Superintendency of Electricity and Fuels (SEC) has not applied sanctions to the Company. Details of

previous sanctions with pending judicial complaint are as follows:

Exempt Resolution: No. 356

Resolution Date: May 18, 1998.

Date of Chilectra S.A.’s Notiﬁ cation : June 17, 1998.

Note 33

Differences between Chilean and United States Generally Accepted Accounting Principles:

Chilean GAAP varies in certain important respects from U.S. GAAP. Such differences involve certain methods for measuring

the amounts shown in the ﬁ nancial statements.

Differences in Measurement Methods

The principal differences between Chilean GAAP and U.S. GAAP are described below together with an explanation, where

appropriate, of the method used in the determination of the adjustments that affect net income and total shareholders’

equity. References below to “SFAS” are to Statements of Financial Accounting Standards issued by the Financial Accounting

Standards Board in the United States.

Inﬂ ation accounting

The cumulative inﬂ ation rate in Chile as measured by the Consumer Price Index for the three-years ended December 31,

2001 was approximately 10.75%. Pursuant to Chilean GAAP, the Company’s ﬁ nancial statements recognize certain effects

of inﬂ ation. The inclusion of price-level adjustments in the accompanying consolidated ﬁ nancial statements is considered

appropriate under the prolonged inﬂ ationary conditions affecting the Chilean economy even though the cumulative

inﬂ ation rate for the last three years does not exceed 100%. As allowed pursuant to Form 20-F the reconciliation included

herein of consolidated net income, comprehensive income and shareholders’ equity, as determined in accordance with

U.S. GAAP, excludes adjustments attributable to the effect of differences between the accounting for inﬂ ation under

Chilean GAAP versus U.S. GAAP.

Reversal of revaluation of property, plant and equipment

In accordance with standards issued by the SVS, certain property, plant and equipment are recorded in the ﬁ nancial

statements at amounts determined in accordance with a technical appraisal. The difference between the carrying value

and the revalued amount is included in shareholders’ equity, beginning in 1989, in “Other reserves”, and is subject to

adjustments for price-level restatement and depreciation. Revaluation of property, plant and equipment is an accounting

principle not generally accepted under U.S. GAAP, therefore, the effects of the reversal of this revaluation, as well as of

the related accumulated depreciation and depreciation expense are included in paragraph (aa) below.

c) Depreciation of property, plant and equipment

Under Chilean GAAP, certain costs related to the cost of acquisition of Edesur S.A., at the time of the acquisitions in

1992 and 1994 by Distrilec Inversora S.A., were charged to earnings as incurred. Under U.S. GAAP, these costs would

have been included in the purchase price and would have been allocated to the net assets acquired based upon fair

values. For purposes of the reconciliation to U.S. GAAP, these costs were considered to be a part of property, plant,

and equipment, the primary assets of Edesur S.A.

As discussed in paragraph (i), under Chilean GAAP, assets acquired and liabilities assumed are recorded at their carrying

value, and the excess of the purchase price over the carrying value is recorded as goodwill. Under U.S. GAAP, assets

acquired and liabilities assumed are recorded at their estimated fair values, and the excess of the purchase price over the

estimated fair value of the net identiﬁ able assets and liabilities acquired is recorded as goodwill. As part of the purchase

of the majority ownership interest in Endesa-Chile, under U.S. GAAP, the cost of the purchase price would have been

allocated to the fair value of property, plant and equipment.

The effect on shareholders’ equity and net income for the years presented is included in paragraph (aa) below.

Intangibles

Under Chilean GAAP, the Company has recorded intangible assets relating to the transfer of revalued assets which

originated in the predecessor company, “Compañía Chilena de Distribución Eléctrica S.A.” at the time of the Company’s

formation. Under U.S. GAAP, such intangible assets would not have been recorded as the assets would have been

recorded at the Predecessor Company’s carrying values. The effects of adjusting shareholders’ equity for the intangible

asset net of accumulated amortization, inclusive of accumulated price-level restatement, and net income statement for

the annual amortization expense are included in paragraph (aa) below.

Deferred income taxes

Under Chilean GAAP, until December 31, 1999, deferred income taxes were recorded based on non-recurring timing

differences between the recognition of income and expense items for ﬁ nancial statement and tax purposes. Accordingly,

there was an orientation toward the income statement focusing on differences in the timing of recognition of revenues

and expenses in pre-tax accounting income and taxable income. Chilean GAAP also permitted not providing for deferred

income taxes where a deferred tax asset or liability was either offsetting or not expected to be realized. Starting January

1, 2000, the Company recorded income taxes in accordance with Technical Bulletin No. 60 of the Chilean Association

of Accountants, recognizing, using the liability method, the deferred tax effects of temporary differences between the

ﬁ nancial and tax values of assets and liabilities. As a transitional provision, a contra (referred to as “complementary”) asset

or liability has been recorded offsetting the effects of the deferred tax assets and liabilities not recorded prior to January 1,

2000. Such complementary asset or liability are being amortized to income over the estimated average reversal periods

corresponding to the underlying temporary differences to which the deferred tax asset or liability relates.

Under U.S. GAAP, companies must account for deferred taxes in accordance with SFAS No. 109, which requires an asset

and liability approach for ﬁ nancial accounting and reporting of income taxes, under the following basic principles:

(i) A deferred tax liability or asset is recognized for the estimated future tax effects attributable to temporary differences

and tax loss carryforwards.

(ii) The measurement of deferred tax liabilities and assets is based on the provisions of the enacted tax law. The effects of

future changes in tax laws or rates are not anticipated.

(iii) The measurement of deferred tax assets are reduced by a valuation allowance, if based on the weight of available

evidence, it is more likely than not that some portion of the deferred tax assets will not be realized.

Temporary differences are deﬁ ned as any difference between the ﬁ nancial reporting basis and the tax basis of an asset

and liability that at some future date will reverse, thereby resulting in taxable income or expense. Temporary differences

ordinarily become taxable or deductible when the related asset is recovered or the related liability is settled. A deferred tax

liability or asset represents the amount of taxes payable or refundable in future years as a result of temporary differences

at the end of the current year.

1
1

4
4

8
8

/
/

In 1999, the principal effect on the Company due to the difference in the accounting for deferred income taxes between

Chilean and U.S. GAAP relates to the treatment of temporary differences arising from provisions, net operating loss-

carryforwards and accelerated depreciation methods. In subsequent years the principal difference relates to the reversal

of the complementary assets and liabilities recorded as a transitional provision for unrecorded deferred taxes as of

January 1, 2000 and their corresponding amortization into income. The effect of these differences on the net income

and shareholders’ equity of the Company is included in paragraph (aa) below.

Staff severance indemnities

As described in Note 2 n), under the Company’s employment contracts, it has committed to provide a lump sum payment

to each employee at the end of their employment, whether due to death, termination, resignation or retirement. Those

obligations are calculated based on the present value of the liability determined at each year-end based on the current

salary and average service life of each employee. The Company, and certain of its subsidiaries, used a real discount

rate of 9.5% for the years ended December 31, 2000 and 2001, and assumed an average service life which varies based

upon years of service with the Company. The real annual discount rate does not include a projection of inﬂ ation and,

accordingly, future salary increases are also excluded from the calculation of the obligation, because all such future

increases are expected to approximate the increase in inﬂ ation over a long-term period.

Under U.S. GAAP, this arrangement is considered to be a termination indemnity plan and should therefore be accounted

for in accordance with SFAS No. 87 “Employers’ Accounting for Pensions”. The liability would be measured by projecting

future expected severance payments using an assumed salary progression rate and discounting the resulting amounts

to their present value. In practice, the Company believes that the salary progression rate will not differ signiﬁ cantly from

the general inﬂ ation rate. The application of U.S. GAAP would not have produced results materially different from the

acceptable method under Chilean GAAP.

Pension and post-retirement beneﬁ ts

The Company has obligations related to complementary pension plan beneﬁ ts and other post-retirement beneﬁ ts

as stipulated in collective bargaining agreements. Under U.S. GAAP, post-retirement employee beneﬁ ts have been

accounted for in accordance with SFAS No. 87 and SFAS No. 106. The effects of accounting for post-retirement beneﬁ ts

under U.S. GAAP have been presented in paragraph (aa).

Investments in related companies

The Company’s equity share of the effect of the adjustments from Chilean GAAP to U.S. GAAP of equity accounted

investees is included in paragraph (aa) below. The principal U.S. GAAP adjustments affecting the Company’s equity

investees are as follows:

(a) The recording of pension beneﬁ ts in accordance with SFAS No. 87.

(b) The recording of deferred taxes in accordance with SFAS No. 109.

(d) For the year beginning January 1, 2001, the recording of derivative instruments in accordance with SFAS No. 133.

(e) The deferred income tax effects of adjustments (a), (c) and (d).

Goodwill

(i) Under Chilean GAAP, assets acquired and liabilities assumed are recorded at their carrying value, and the excess of the

purchased price over the carrying value are recorded as goodwill. Circular No. 1358, dated December 3, 1997 issued by

the SVS, extended the maximum amortization period of goodwill to 20 years from the previous 10 years.

Under U.S. GAAP, assets acquired and liabilities assumed are recorded at their estimated fair values, and the excess of

the purchased price over the estimated fair value of the net identiﬁ able assets and liabilities acquired are recorded as

goodwill. The Company amortizes goodwill on a straight-line basis over the estimated useful lives of the assets, ranging

from 20 to 40 years. Goodwill acquired after June 30, 2001 is not amortized (see Note 33 II(o)).The effects of recording

the different amortization periods are included in paragraph (aa) below.

(ii)

In accordance with SFAS No. 121, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets

to Be Disposed Of”, the Company evaluates the carrying amount of property, plant and equipment and certain

intangibles, including attributable goodwill, in relation to the operating performance and future undiscounted cash

ﬂ ows of the underlying business. This standard requires that an impairment loss be recognized in the event that facts

and circumstances indicate that the carrying amount of an asset may not be fully recoverable, when compared to the

estimated future undiscounted cash ﬂ ows. Impairment is recorded based on an estimate of future discounted cash

ﬂ ows, as compared to current carrying amounts. For the years ended December 31, 1999, 2000, and 2001 no additional

amounts were recorded for impairment under U.S. GAAP.

(iii) During the year ended December 31, 2001, a revision of U.S. GAAP goodwill was made to previous U.S. GAAP amounts

included in the reconciliation of consolidated shareholders’ equity because U.S. GAAP goodwill was understated in the

subsidiary Coelce by ThCh$50,077,237 during the years ended December 31, 1999 and 2000. This revision does not

have an impact on the reconciliation to consolidated net income for the years ended December 31, 1999 and 2000 as

the accumulated differences of Chilean and U.S. GAAP goodwill amortization are appropriately stated. See paragraph

(aa) below for the restated amounts.

The restatement of the reconciliation to conform shareholders’ equity amounts to U.S. GAAP is as follows:

Account

Shareholders’ equity in accordance with U.S. GAAP, as previously reported
Difference due to goodwill (paragraph h)
Difference due to effects of minority interest on restatement

As of December 31,
2000
ThCh$

1,074,869,774
50,077,237
(26,559,605)

Shareholders’ equity in accordance with U.S. GAAP, as restated

1,098,387,406

Negative goodwill

Under Chilean GAAP, the excess of the carrying value of the assets assumed in a business combination over the purchase

price is recorded as negative goodwill. Circular No. 1358, dated December 3, 1997 issued by the SVS, extended the

maximum amortization period of negative goodwill to 20 years from the previous 5 years. Under U.S. GAAP, the fair

values of the assets acquired less the fair values of the liabilities assumed in excess of over the purchase price is allocated

proportionately to reduce the values assigned to non-current assets. If the allocation reduces the non-current monetary

assets to zero, the remainder of the excess is recorded as a deferred credit account called negative goodwill. The effect

of reducing depreciation expense, due to the proportionate allocation of the excess purchase price to property, plant

and equipment, as compared to the amortization of negative goodwill under Chilean GAAP is included in paragraph

(aa) below.

k) Capitalized interest and exchange differences

In accordance with Chilean GAAP, the Company has capitalized both interest on debt directly related to property, plant

and equipment under construction and ﬁ nance costs corresponding to exchange differences generated by the loans

associated with such assets. The capitalization of interest costs associated with projects under construction is optional

when incurred on debt that is not directly related to such projects.

1
1

5
5

0
0

/
/

Under U.S. GAAP, the capitalization of interest on qualifying assets under construction is required, regardless of whether

interest is associated with debt directly related to a project. In addition, under U.S. GAAP, foreign translation exchange

differences may not be capitalized. The accounting differences between Chilean and U.S. GAAP for ﬁ nancing costs and

the related depreciation expense are included in the reconciliation to U.S. GAAP under paragraph (aa) below.

Accumulated deﬁ cit during the development stage

Under Chilean GAAP, the losses incurred during the development stage of subsidiary companies is recorded directly

in the parent company’s equity. Under U.S. GAAP, such costs must be charged to income as incurred. The effects are

included in paragraph (aa) below.

m) Minimum dividend

As required by 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. Since the payment of the 30% dividend out of each year’s income is required by Chilean

law, an accrual has been made in the reconciliation in paragraph (aa) below to reﬂ ect the unrecorded dividend liability,

whenever and to the extent the recorded interim dividends do not reach the 30% minimum dividend.

n) Capitalized general and administrative expenses

Until 1993, Endesa-Chile capitalized a portion of its administrative and selling expenses as part of the cost of construction

in progress because a substantial portion of the efforts of management were involved in the administration of major

projects. Under U.S. GAAP, general and administrative expenses are charged to expense unless they can be directly

identiﬁ ed with the supervision of the constructions of speciﬁ c projects. The effects of eliminating capitalized general

and administrative expenses and the related depreciation for U.S. GAAP purposes are shown below under paragraph

(aa).

o) Workers’ proﬁ t sharing in Peru

Statutory worker’s proﬁ t sharing in Peru is computed at 5% of the Peruvian subsidiary’s taxable income before workers’

proﬁ t sharing. Because workers’ proﬁ t sharing is calculated on taxable income, under U.S. GAAP, differences between

ﬁ nancial reporting and taxable income should be considered in the calculation of workers’ proﬁ t sharing for each period

on a basis consistent with that used for income taxes. The difference in accounting for Peruvian proﬁ t sharing between

Chilean and U.S. GAAP is included in the reconciliation to U.S. GAAP under paragraph (aa) below.

Involuntary employee termination beneﬁ ts

Under Chilean GAAP, the Argentine subsidiaries, Central Costanera and Hidroelectricidad, recorded an accrual of certain

involuntary employees termination beneﬁ ts related to the restructuring plan announced in 1997. Since that date employees

have continued to be made redundant pursuant to this plan. In accordance with U.S. GAAP, in order to recognize a

liability at the balance sheet date for the cost to terminate employees involuntarily, there must be a plan that speciﬁ cally

includes notiﬁ cation of such employees prior to the balance sheet date. As of December 31, 2001, this requirement had

not been met. The effect of eliminating the accrued liability recognized is presented in paragraph (aa) below.

q) Adjustment in selling price of investment

Under Chilean GAAP, pursuant to the share transaction contract entered into in 1995 between Endesa-Chile and Endesa

Overseas Co. with Enersis International Limited, Chilectra S.A. and Chilectra International Limited, Endesa Argentina

recognized income related to an adjustment of the share purchase price. Under U.S. GAAP, the contingent price

adjustment would be considered a part of the purchase price, and would therefore be offset against the amount of

goodwill that was originally determined. The effects of the adjustments to conform to U.S. GAAP are included under

paragraph (aa) below.

Elimination of capitalized legal reserve

Under Chilean GAAP, the Company capitalized interest to property, plant and equipment as a result of the creation of

a legal reserve speciﬁ cally permitted in Brazil for the electricity industry. Under U.S. GAAP, interest capitalized must be

based on actual interest incurred, and as such the effects of the elimination of the interest capitalized to property, plant

and equipment and the effects on depreciation expense are included in paragraph (aa) below.

s) Organizational and start-up costs

Certain costs related to the organization and creation of certain subsidiaries of the Company were deferred and capitalized

under Chilean GAAP. Under U.S. GAAP, such organizational and start-up costs may not be deferred and must be included

in income as incurred. The effects of this difference are included in paragraph (aa) below.

Translation of Financial Statements of Investments Outside of Chile

Under Chilean GAAP, in accordance with Technical Bulletin 64 (“BT 64”) the ﬁ nancial statements of foreign subsidiaries

that operate in countries exposed to signiﬁ cant risks (“unstable” countries), and that are not considered to be an extension

of the parent company’s operations, are remeasured into US dollars. The Company’s foreign subsidiaries in Argentina,

Peru, Brazil, and Colombia all meet the criteria of foreign subsidiaries that operate in countries exposed to signiﬁ cant

risks under BT 64, and are remeasured into US dollars. The Company has remeasured its foreign subsidiaries into US

dollars under this requirement as follows:

•

Monetary assets and liabilities are translated at year-end rates of exchange between the US dollar and the local

currency.

•

All non-monetary assets and liabilities and shareholder’s equity are translated at historical rates of exchange between

the US dollar and the local currency.

•

Income and expense accounts are translated at average rates of exchange between the US dollar and local currency.

The effects of any exchange rate ﬂ uctuations between the local currency and the US dollar are included in the results

of operations for the period.

Under BT 64, the investment in the foreign subsidiary is price-level restated, the effects of which are reﬂ ected in income,

while the effects of the foreign exchange gains or losses between the Chilean Peso and the US Dollar on the foreign

investment measured in US dollars, are reﬂ ected in equity in the account “Cumulative Translation Adjustment”.

The amount of foreign exchange gain included in income that is attributable to operations in unstable countries because

these amounts have been remeasured into US dollars was ThCh$168,761,152, ThCh$43,038,825, and ThCh$56,094,130

for the years ended December 31, 1999, 2000 and 2001, respectively (See note 23 (a)).

In the opinion of the Company, the foreign currency translation procedures described above are part of the comprehensive

basis of preparation of price-level adjusted ﬁ nancial statements required by Chilean GAAP. Inclusion of inﬂ ation and

translation effects in the ﬁ nancial statements is considered appropriate under the inﬂ ationary conditions that have

historically affected the Chilean economy, and accordingly, are not eliminated in the reconciliation to U.S. GAAP as

permitted by Form 20-F.

1
1

5
5

2
2

/
/

u) Derivative instruments

Under Chilean GAAP, forward foreign exchange contracts gains and losses are recorded at the closing spot exchange rate

and included in earnings as “Other non-operating income and expense”. The initial discount or premium is amortized

over the life of the contract as interest expense.

Previously, under U.S. GAAP, contracts that were designated and effective as hedges of existing assets and liabilities

were recorded in the same manner as described under Chilean GAAP above. However, contracts not designated or

effective as hedges were recorded at fair value with the unrealized gains and losses recognized in income. For contracts

with fair values different from the values of the contracts at the closing spot exchange rate, a difference between U.S.

and Chilean GAAP resulted. The effects of the difference were not considered material to the consolidated ﬁ nancial

statements and accordingly were not previously included in paragraph (aa) below.

In June 1998, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards

No. 133 (SFAS No. 133), “Accounting for Derivative Instruments and Hedging Activities”. In June 1999, the FASB issued

Statement No. 137, “Accounting for Derivative Instruments and Hedging Activities - Deferral of the Effective Date of

FASB Statement No. 133”. In June 2000, the FASB issued Statement 138, “Accounting for Certain Derivative Instruments

and Certain Hedging Activities, an amendment of FASB Statement No. 133”. SFAS No. 133, as amended, establishes

accounting and reporting standards requiring that every derivative instrument (including certain derivative instruments

embedded in other contracts) be recorded in the balance sheet as either an asset or liability measured at its fair value.

SFAS No. 133 requires that changes in the derivative instrument’s fair value be recognized currently in earnings unless

speciﬁ c hedge accounting criteria are met. Special accounting for qualifying hedges allows a derivative instrument’s gains

and losses to offset related results on the hedged item in the income statement, to the extent effective, and requires

that a company must formally document, designate, and assess the effectiveness of transactions that receive hedge

accounting.

The Company adopted SFAS No. 133, as amended, on January 1, 2001. SFAS No. 133 requires that as of the date of

initial adoption, the difference between the market value of derivative instruments recorded on the balance sheet

and the previous carrying amount of those derivatives be reported in net income or other comprehensive income, as

appropriate, as the cumulative effect of a change in acounting principle in accordance with Accounting Principles Board

Opinion No. 20, “Accounting Changes.” Statement 133 cannot be applied retroactively. SFAS No. 133 must be applied

to (a) derivative instruments and (b) certain embedded derivative instruments. As permitted under this standard, the

Company has applied SFAS No. 133 to only those embedded instruments that were issued, acquired, or substantively

modiﬁ ed after January 1, 1999.

SFAS No. 133, in part, allows special hedge accounting for “fair value” and “cash ﬂ ow” hedges. SFAS No. 133 provides

that the gain or loss on a derivative instrument designated and qualifying as a “fair value” hedging instrument as well

as the offsetting loss or gain on the hedged item attributable to the hedged risk be recognized currently in earnings

in the same accounting period. The accounting standard provides that the effective portion of the gain or loss on a

derivative instrument designated and qualifying as a “cash ﬂ ow” hedging instrument be reported as a component

of other comprehensive income and be reclassiﬁ ed into earnings in the same period or periods during which the

hedged forecasted transaction affects earnings. The remaining gain or loss on the derivative instrument, if any, must

be recognized currently in earnings. While the Company enters into derivatives for the purpose of mitigating its global

ﬁ nancial and commodity risks, these operations do not meet the documentation requirements to qualify for hedge

accounting under U.S. GAAP. Therefore changes in the respective fair values of all derivatives are reported in earnings

when they occur.

Current Chilean accounting rules do not consider the existence of derivative instruments embedded in other contracts

and therefore they are not reﬂ ected in the ﬁ nancial statements. For U.S. GAAP purposes, certain implicit or explicit

terms included in host contracts that affect some or all of the cash ﬂ ows or the value of other exchanges required by

the contract in a manner similar to a derivative instrument, must be separated from the host contract and accounted for

at fair value. The Company separately measures embedded derivatives as freestanding derivatives instruments at their

estimated fair values recognizing changes in earnings when they occur.

Estimates of fair values of ﬁ nancial instruments for which no quoted prices or secondary market exists have been made

using valuation techniques such as forward pricing models, present value of estimated future cash ﬂ ows, and other

modeling techniques. These estimates of fair value include assumptions made by the Company about market variables

that may change in the future. Changes in assumptions could have a signiﬁ cant impact on the estimate of fair values

disclosed. As a result such fair value amounts are subject to signiﬁ cant volatility and are highly dependent on the quality

of the assumptions used (see Note 33 II(j)).

The effect of adopting SFAS No. 133 as of January 1, 2001, resulted in a cumulative effect on net income of

ThCh$20,402,957, which is presented net of deferred taxes of ThCh$45,219,341 and minority interest under the caption

“Cumulative effect of change in accounting principles.” The effects of the adjustment with respect to ﬁ nancial derivatives,

commodity derivatives, and embedded derivatives for the year ended December 31, 2001 is included in the net income

and shareholders’ equity reconciliation to U.S. GAAP under paragraph (aa) below. For additional disclosures required

under FAS No. 133 see Note 33 II(k).

Fair value of long-term debt assumed

As discussed in paragraph (i), under Chilean GAAP, assets acquired and liabilities assumed are recorded at their carrying

value, and the excess of the purchased price over the carrying value are recorded as goodwill. Under U.S. GAAP, assets

acquired and liabilities assumed are recorded at their estimated fair values, and the excess of the purchased price over

the estimated fair value of the net identiﬁ able assets and liabilities acquired are recorded as goodwill. As part of the

purchase of the majority ownership interest in Endesa-Chile, under U.S. GAAP, the cost of the purchase price would

have been allocated to the fair value of long-term debt. The effect on shareholders’ equity and net income for the years

presented is included in paragraph (aa) below.

w) Sale of subsidiaries

Corresponds to the reversal of the December 31, 1999 accumulated adjustments to U.S. GAAP which under U.S. GAAP

would have been included in the determination of any gain or loss on sale made in connection with the subsidiaries

Compañía Nacional de Transmisión Eléctrica S.A. (Transelec), Aguas Cordillera S.A., and Aguas Puerto S.A., as these

subsidiaries were sold during 2000.

x) Deferred income

During 2000, ﬁ ber optic cable was contributed to the Company in return for granting the contributing company access

to the ﬁ ber optic network after installation in the Company´s electricity distribution system. Under Chilean GAAP, the

contributed assets were recorded at their fair market value, with a corresponding credit recognized as income in 2000.

Under U.S. GAAP and in accordance with the Securities and Exchange Commission’s Staff Accounting Bulletin No. 101,

“Revenue Recognition in Financial Statements” (“SAB No. 101”), the fair market value of the assets to be used in the

future is considered an upfront payment which is not the result of the culmination of a separate earning process, and

therefore, should be deferred and recognized in income over the estimated useful life of the ﬁ ber optic assets. The effect

on shareholders’ equity and net income for the years presented is included in (aa) below.

1
1

5
5

4
4

/
/

(y) Regulated assets and deferred costs

The electricity sector in Chile and other countries of operation in Latin America is regulated pursuant to the Chilean and

other country electricity laws. Most of the Company’s sales are subject to node price regulation, which is designed to

ensure an adequate supply of energy at reasonabe, determined prices, which considers a variety of factors. The marginal

cost pricing model is not solely based upon costs incurred by the Company, and as a result, the requirements of U.S.

GAAP under SFAS No. 71, “Accounting for the Effects of Certain Types of Regulation,” related to a businesses whose

rates are regulated are not applicable to the Company’s ﬁ nancial statements, except for the Company’s operations in

Brazil as described below.

As a result of changes in Brazilian Electricity Laws and Regulations, the Company’s distribution subsidiaries in Brazil,

Companhia de Electricidad do Rio de Janiero (Cerj) and Companhia Energética do Ceará (Coelce), are subject to the

provisions of SFAS No. 71 beginning on January 1, 2001. With the new regulations issued by the National Agency of

Electric Energy (ANEEL), the rate-setting structure in Brazil is now designed to provide recovery for allowable costs

incurred, which will be recovered through future increases in energy tariffs in order to recover losses experienced during

the period of Brazilian Federal Government mandated energy rationing from June 1, 2001 to December 31, 2001. The

Company estimates costs will be recovered over a period estimated to be three years (as described in Note 5).

Accordingly, the Company capitalizes incurred costs as deferred regulatory assets when there is a probable expectation

that future revenue equal to the costs incurred will be billed and collected as a direct result of the inclusion of the costs

in an increased rate set by the regulator. The deferred regulatory asset is eliminated when the Company collects the

related costs through billings to customers. ANEEL performs a rate review on an annual basis. If ANEEL excludes all or

part of a cost from recovery, that portion of the deferred regulatory asset is impaired and is accordingly reduced to the

extent of the excluded cost. The Company has recorded deferred regulatory assets, which it expects to pass on to its

customers in accordance with and subject to regulatory provisions.

The regulations also included certain VPA costs, which are certain costs that each distribution company is permitted to

defer and pass on to their customers using future rate adjustments. VPA costs are limited by concession contracts to the

cost of purchased power and certain other costs and taxes. Due to uncertainty in the Brazilian economy, ANEEL delayed

the approval of such VPA rate increases. An Executive Order in October 2001 created a tracking account mechanism, in

order to calculate the variation in the VPA costs for future rate adjustment calculation purposes. The Company has not

recognized any regulatory assets for VPA costs incurred prior to 2001, because costs incurred prior to January 1, 2001,

are not recoverable through the tracking account.

Under Chilean GAAP, the Company recognized revenue and deferred costs related to the regulated assets. Under U.S.

GAAP, in accordance with Emerging Issues Taskforce (EITF) No. 92-7, “Accounting by Rate Regualted Utilities for the Effects

of Certain Alternate Revenue Programs,” revenue amounts not expected to be collected within 24 months, have been

deferred. The effect of deferring revenues expected to be collected after two years is included in (aa) below.

(z) Reorganization of subsidiaries

Corresponds to the reorganization of the Company’s subsidiaries Central Costanera and Central Buenos Aires (CBA)

during 2001, in which Central Costanera acquired the minority interest in CBA from third parties and exchanged shares

with Endesa Argentina. Under Chilean GAAP, the Company recorded the transactions under the pooling method, using

the book values of the net assets acquired under merger accounting.

Under U.S. GAAP the exchange of shares between entities under common control is recorded at book values. To the

extent that shares in CBA were acquired from third parties, the identiﬁ able assets acquired and liabilities assumed are

recorded at fair value using purchase accounting together with the shares issued by the subsidiary Central Costanera.

The effect on shareholders’ equity for the years presented is included in (aa) below.

(aa) Effects of conforming to U.S. GAAP:

The reconciliation of reported net income required to conform with U.S. GAAP is as follows:

For the year ended December 31,

2000
ThCh$

2001
ThCh$

Net income (loss) in accordance with Chilean GAAP

92,875,150

40,926,246

Reversal of amortization of revaluation of property, plant and equipment (paragraph b)
Depreciation of property, plant and equipment (paragraph c)
Amortization of intangibles (paragraph d)
Deferred income taxes (paragraph e)
Staff severance indemnities (paragraph f)
Pension and post-retirement beneﬁ ts (paragraph g)
Investments in related companies (paragraph h)
Amortization of goodwill (paragraph i)
Amortization of negative goodwill (paragraph j)
Capitalized interest and exchange differences (paragraph k)
Accumulated deﬁ cit during the development stage (paragraph l)
Capitalized general and administrative expenses (paragraph n)
Workers’ proﬁ t sharing in Peru (paragraph o)
Involuntary employee termination beneﬁ ts (paragraph p)
Adjustment in selling price of investment (paragraph q)
Elimination of amortization of capitalized legal reserve (paragraph r)
Organizational and start-up costs (paragraph s)
Derivative instruments (paragraph u)
Fair value of long-term debt assumed (paragraph v)
Sale of subsidiaries (paragraph w)
Deferred income (paragraph x)
Regulated assets (paragraph y)
Effects of minority interest on the U.S. GAAP adjustments
Deferred tax effects on the U.S. GAAP adjustments
Net income (loss) in accordance with U.S. GAAP before cumulative effect
of change in accounting principle

Cumulative effect of change in accounting principle, net of tax of
Ch$45,219,341 and minority interest

2,521,393
(1,417,027)
1,333,569
(67,492,919)
-
(10,694,058)
-
(7,321,475)
(18,480,660)
33,390,506
152,203
(1,567,184)
(278,961)
(2,614,610)
130,052
(3,241,009)
797,269
-
129,525
20,945,635
(3,118,842)
-
56,305,307
(20,090,362)

1,844,446
(1,791,679)
185,471
(27,785,276)
-
3,629,742
(17,591,894)
(1,067,846)
(26,120,033)
4,745,549
(399,387)
(123,269)
(758,454)
(8,541)
(74,203)
574,251
3,844,926
63,290,927
(169,155)
-
160,601
(40,682,757)
(4,033,211)
(16,000,786)

72,263,502

(17,404,332)

20,402,957

Net income (loss) in accordance with U.S. GAAP

72,263,502

2,998,625

Other comprehensive income (loss):
Cumulative translation adjustment determined under Chilean GAAP
Cumulative translation adjustment related to U.S. GAAP adjustments

1,298,054
(4,281,630)

18,892,550
(3,392,426)

Comprehensive income (loss) in accordance with U.S. GAAP

69,279,926

18,498,749

1
1

5
5

6
6

/
/

The reconciliation to conform shareholders’ equity amounts to U.S. GAAP is as follows:

Shareholders’ equity in accordance with Chilean GAAP

Reversal of revaluation of property, plant and equipment (paragraph b)
Reversal of accumulated amortization of revaluation of property,
plant and equipment (paragraph b)
Depreciation of property, plant and equipment (paragraph c)
Intangibles (paragraph d)
Deferred income taxes (paragraph e)
Pension and post-retirement beneﬁ ts (paragraph g)
Investments in related companies (paragraph h)
Goodwill (paragraph i)
Negative goodwill (paragraph j)
Capitalized interest and exchange differences (paragraph k)
Minimum dividend (paragraph m)
Capitalized general and administrative expenses (paragraph n)
Workers’ proﬁ t sharing in Peru (paragraph o)
Reversal of accrual of certain involuntary employee termination beneﬁ ts (paragraph p)
Adjustment in selling price of investment (paragraph q)
Elimination of capitalized legal reserve (paragraph r)
Organizational and start-up costs (paragraph s)
Derivative instruments (paragraph u)
Fair value of long-term debt assumed (paragraph v)
Deferred income (paragraph x)
Regulated assets (paragraph y)
Effects of minority interest on the U.S. GAAP adjustments
Deferred tax effect of U.S. GAAP adjustments

As of December 31,

2000
ThCh$

Revised
1,134,718,837

2001
ThCh$

1,179,186,389

(66,917,222)

(66,779,833)

48,653,022
691,439
(1,367,443)
(201,793,335)
(45,327,753)
-
305,441,090
(158,745,588)
34,464,314
(27,862,545)
(25,883,386)
(3,631,641)
409,272
(4,074,383)
(8,742,566)
(37,958,771)
-
1,487,057
(3,118,842)
-
156,297,941
1,647,909

50,028,260
740,847
(1,182,912)
(237,293,130)
(46,708,749)
(16,879,367)
322,415,294
(199,880,362)
43,640,699
(12,277,874)
(26,432,441)
(4,888,327)
400,731
(4,092,438)
(9,104,855)
(38,180,150)
204,240,437
1,317,903
(3,292,344)
(40,682,757)
93,851,459
(67,103,924)

Shareholders’ equity in accordance with U.S. GAAP

1,098,387,406

1,121,042,556

The changes in shareholders’ equity in U.S. GAAP as of each year-end are as follows:

Shareholders’ equity in accordance with U.S. GAAP – January 1,

Dividends paid during the year
Reversal of dividends payable as of previous balance sheet date
Minimum dividend (paragraph m)
Issuance of shares
Cumulative translation adjustment
Reorganization of subsidiaries (paragraph z)
Net income (loss) in accordance with U.S. GAAP for the year

As of December 31,

2000

ThCh$

Revised
751,648,100

-
-
(27,862,545)
305,321,925
(2,983,576)
-
72,263,502

2001

ThCh$

1,098,387,406

(14,976,824)
27,862,545
(12,277,874)
-
15,500,124
3,548,554
2,998,625

Shareholders’ equity in accordance with U.S. GAAP – December 31,

1,098,387,406

1,121,042,556

II.

Additional Disclosure Requirements:

a) Goodwill and negative goodwill:

The following is an analysis of goodwill and negative goodwill, determined on a Chilean GAAP basis, as of December

31, 2000 and 2001, respectively:

Goodwill
Less: accumulated amortization

Goodwill, net

Negative goodwill
Less: accumulated amortization

Negative goodwill, net

b) Basic and diluted earnings per share:

Chilean GAAP (loss) earnings per share (Ch$) (1)
U.S. GAAP (loss) earnings per share (Ch$1) (1):
U.S. GAAP (loss) earnings per share before extraordinary gain
Extraordinary gain
U.S. GAAP (loss) earnings per share before cumulative effect of
change in accounting principle
Cumulative effect of change in accounting principle
U.S. GAAP (loss) earnings per share

As of December 31,

2000

ThCh$

2001

ThCh$

1,557,236,893
(253,946,933)

1,601,427,266
(324,299,828)

1,303,289,960

1,277,127,438

349,425,728
(153,628,440)

367,703,264
(195,078,770)

195,797,288

172,624,494

Year ended December 31,

2000

Ch$

12.94

10.06
-

10.06
-
10.06

2001

Ch$

4.94

(4.92)
2.82

(2.10)
2.46
0.36

Weighted average number of common shares outstanding (000’s)

7,180,409

8,291,020

(1) The earnings per share ﬁ gures for both U.S. GAAP and Chilean GAAP purposes have been calculated by dividing
the respective earnings (loss) amounts in accordance with U.S. GAAP and Chilean GAAP, respectively, by the weighted
average number of common shares outstanding during the year. The Company has not issued convertible debt or
equity securities. Consequently, there are no potentially dilutive effects on the earnings per share of the Company.

1
1

5
5

8
8

/
/

Income taxes:

The provision (beneﬁ t) for income taxes charged to the results of operations determined in accordance with U.S. GAAP

is as follows:

Chile
ThCh$

Argentina
ThCh$

Peru
ThCh$

2000

Brazil
ThCh$

Colombia
ThCh$

Other
ThCh$

Total
ThCh$

Income tax provision under Chilean GAAP:

Current income taxes as determined under Chilean GAAP (1)
Deferred income taxes as determined under Chilean GAAP

63,123,186
(8,702,847)

37,100,638
642,132

1,250,548
16,161,359

20,854,372
(23,244,478)

32,139,206
(1,655,887)

312,356
-

154,780,306
(16,799,721)

Total income tax provision under Chilean GAAP

54,420,339

37,742,770

17,411,907

(2,390,106)

30,483,319

312,356

137,980,585

U.S. GAAP adjustments:
Deferred tax effect of applying SFAS No. 109

8,941,674

(5,401,710)

9,996,028

53,104,967

851,960

Deferred tax effect of adjustments to U.S. GAAP

(849,599)

5,519,958

76,313

15,343,690

Total U.S. GAAP adjustments

8,092,075

118,248

10,072,341

68,448,657

851,960

67,492,919

20,090,362

87,583,281

Total income tax provision under U.S. GAAP

62,512,414

37,861,018

27,484,248

66,058,551

31,335,279

312,356

225,563,866

(1) The income tax provisions under Chilean GAAP for the years ended December 31, 1999 and 2000 are stated net of income tax recovery of
ThCh$21,404,001 and ThCh$4,081,070, respectively.

Chile

ThCh$

Argentina

ThCh$

Peru

ThCh$

2001

Brazil

ThCh$

Colombia

ThCh$

Other

ThCh$

Total

ThCh$

Income tax provision under Chilean GAAP:

Current income taxes as determined under Chilean GAAP (1)

12,422,194

43,886,503

7,973,143

22,000,780

30,581,595

69,690

116,933,904

Deferred income taxes as determined under Chilean GAAP

5,886,367

2,328,112

12,789,922

(13,279,797)

167,445

7,892,050

Total income tax provision under Chilean GAAP

18,308,561

46,214,615

20,763,065

8,720,983

30,749,040

69,690

124,825,954

U.S. GAAP adjustments:

Deferred tax effect of applying SFAS No. 109

965,856

22,706,147

669,910

3,283,995

159,368

Deferred tax effect of adjustments to U.S. GAAP

(3,643,910)

2,945,155

(754,271)

(6,192,449)

23,646,261

Deferred tax effect of cumulative effect of change in

Accounting principle

Total U.S. GAAP adjustments

(1,787,748)

40,320,249

(4,465,802)

65,971,551

208,105

125,744

(197,324)

6,676,059

(3,105,778)

30,481,688

27,785,276

16,000,786

45,219,341

89,005,403

Total income tax provision under U.S. GAAP

13,842,759

112,186,166

20,886,809

5,615,205

61,230,728

69,690

213,831,357

(1) The income tax provision under Chilean GAAP for the year ended December 31, 2001 is stated net of income tax recovery of ThCh$7,880,395.

Deferred tax assets (liabilities) as of balance sheet dates are summarized as follows:

As of December 31, 2000

As of December 31, 2001

SFAS No. 109
Applied to

Chilean
GAAP

Balances
ThCh$

3,070,130
-

-
35,718,245

-
1,135,513

1,352,944
564,072

2,239,407

SFAS No.

Total

109 applied
to U.S. GAAP

Adjustments
ThCh$

Deferred
Taxes under

SFAS No. 109
ThCh$

-
-

3,070,130
-

-
35,718,245

-
1,135,513

1,352,944
564,072

2,239,407

15,411,436

SFAS No. 109
Applied to

Chilean
GAAP

Balances
ThCh$

2,620,021
-

-
35,406,523

9,773,005
1,044,114

950,105
-

2,742,911

2,210,532

SFAS No.

Total

109 applied
to U.S. GAAP

Adjustments
ThCh$

Deferred
Taxes under

SFAS No. 109
ThCh$

4,258,265
13,832,137

8,161,408
-

-
1,119,398

-
7,335,073

6,878,286
13,832,137

8,161,408
35,406,523

9,773,005
2,163,512

950,105
7,335,073

2,742,911

2,210,532

15,888,989

15,411,436

133,317,288

33,134,745

6,314,140

4,031,014

133,317,288

74,714,038

33,134,745

37,460,751

6,314,140

6,363,517

10,394,531

12,747,514

74,714,038

37,460,751

12,747,514

Deferred income tax assets
Property, plant and equipment
Regulated assets and related deferred costs (companies in Brazil)

Negative goodwill
Allowance for doubtful accounts

Actuarial deﬁ cit (companies in Brazil)
Deferred income

Obsolescence of raw materials
Derivative contracts

Severance indemnities

Vacation accrual

Post retirement beneﬁ ts

Tax loss carry forwards (1)

Contingencies

Salaries for construction-in progress

Others

Total deferred income tax assets

220,877,498

21,774,953

242,652,451

179,669,514

50,595,270

230,264,784

Deferred income tax liabilities
Negative goodwill

Property, plant and equipment

Severance indemnity

Intangibles

Deferred charges

Finance costs

Derivative contracts

Tax loss carryforwards (1)

Contingencies

Metered energy

Capitalized interest

Lease receivable

Post retirement beneﬁ ts

Others

(619,564)

367,815,233

1,178,206

4,457,331

2,253,147

3,259,679

2,241,772

8,836,634

6,620,972

367,815,233

364,418,683

1,178,206

4,457,331

2,253,147

3,259,679

2,241,772

8,836,634

6,620,972

398,900

81,122

9,445,502

1,811,992

497,368

111,450

4,693,305

1,871,390

5,844,188

1,871,390

370,262,871

398,900

81,122

9,445,502

1,811,992

83,792,615

84,289,983

111,450

4,693,305

20,746,608

137,319

16,191,335

137,319

25,959,723

8,015

16,191,335

18,824,041

223,263

19,047,304

Total deferred income tax liabilities

412,991,628

20,127,044

433,118,672

400,282,363

117,699,194

517,981,557

Net deferred tax assets (liabilities)

Resulting from application of SFAS No. 109

(192,114,130)

1,647,909

(190,466,221)

(220,612,849)

(67,103,924)

(287,716,773)

(1) Tax loss carryforwards relate primarily to Peruvian, Chilean, and Brazilian entities. In accordance with the current enacted tax law in Chile and Brazil,
such tax losses may be carried-forward indeﬁ nitely, however Peruvian tax carryforwards expire after ﬁ ve years.

1
1

6
6

0
0

/
/

A reconciliation of the Chilean Statutory income tax rate to the Company’s effective tax rate on net income is as follows:

Statutory Chilean tax (15%)

Effect of higher foreign tax rates
Increase (decrease) in rates resulting from:

Price-level restatement not accepted
for tax purposes

Deductible items
Non-deductible items

Prior years’ income tax
Other

Chile

ThCh$

Argentina

ThCh$

Peru

ThCh$

2000

Brazil

ThCh$

Colombia

Other

ThCh$

Total

ThCh$

41,042,733

19,734,358

11,838,874

6,336,025

15,767,855

(31,695,387)

63,024,458

18,165,066

7,829,320

1,059,889

8,680,437

(3,339,252)

32,395,460

8,539,706

(296,994)

2,813,890

(5,781,613)

4,530,420

9,805,409

(24,600,984)
39,010,110

(1,530,033)
50,882

259,491
6,398,715

(5,978,218)
(421,400)

4,668,489
-

333,637
38

2,175,426
(7,842,459)

67,365,237
2,746,046

4,917,775
(861,349)

35,034,639
-

-
(1,699,859)

-
312,356

22,454,836
36,705,017

60,190,623
988,063

Tax (beneﬁ t) expense at effective tax rate

62,512,414

37,861,018

27,484,248

66,058,551

31,335,279

312,356

225,563,866

Statutory Chilean tax (15%)

Effect of higher foreign tax rates

Increase (decrease) in rates resulting from:

Price-level restatement not accepted

for tax purposes

Deductible items

Non-deductible items

Prior years’ income tax

Effect of Chilean tax rate increase

Other

Chile
ThCh$

Argentina
ThCh$

Peru
ThCh$

2001

Brazil
ThCh$

Colombia
ThCh$

Other

Total
ThCh$

34,181,716

32,084,090

8,021,841

(728,185)

19,190,391

(31,625,108)

61,124,745

61,795,760

15,982,402

1,592,855

29,222,497

(6,369,147)

102,224,367

10,515,700

(457,668)

(459,042)

(1,121,357)

14,540,341

23,017,974

(21.160.646)

12,519,616

4,552,827

91,915

37,994,255

33,997,966

(23,468,145)

19,738,664

(7,353,502)

(307,282)

(698,707)

1,928,780

7,973,416

389,600

(2,100,737)

(12,088,972)

217,643

7,973,416

3,871,938

(13,494,295)

(247,317)

8,187,996

(1,023,794)

69,690

(2,635,782)

Tax (beneﬁ t) expense at effective tax rate

13,842,759

112,186,166

20,886,809

5,615,205

61,230,728

69,690

213,831,357

d) Acquisitions:

During the year ended December 31, 2001, the Company did not have signiﬁ cant acquisitions.

In December 2000, the Company acquired an additional ownership interest of 18.5% in Companhia de Electricidade do

Río de Janerio (Cerj) under the purchase method for a total purchase price of US$136,092,000 in cash. This and other

transactions increased the Company’s direct and indirect ownership from 37.41% to 57.38%. As described in Note 2 (a),

Cerj is consolidated with the Company’s results beginning in January 1, 1999, thus proforma results are not required.

Under Chile GAAP, negative goodwill of ThCh$2,075,116 has been recorded and is being amortized on a straight-line

basis over 20 years. Under U.S. GAAP, the negative goodwill of ThCh$2,075,116 has been allocated to tangible assets

and is being depreciated on a straight-line basis over 25 years.

In November 2000, the Company entered into a series of transactions to acquire an additional ownership interest of

25.4% in Chilectra and 14.7% of Rio Maipo under the purchase method through a public offering of shares (Oferta Pública

de Acciones) for a total purchase price of approximately US$378,377,000 and US$23,713,000, respectively, in cash. This

increased the Company’s direct and indirect ownerships from 72.56% and 83.74% to 97.97% and 98.40%, respectively.

Proforma results for the additions to Chilectra and Rio Maipo are not disclosed due to the immateriality of these step

purchases. Under Chile GAAP, goodwill of ThCh$99,823,214 and ThCh$10,284.020 has been recorded and is being

amortized on a straight-line basis over 20 years. Under U.S. GAAP goodwill of ThCh$99,823,214 and ThCh$10,284,020,

respectively, has been recorded and is being amortized on a straight-line basis ranging from 20 to 30 years.

In May 1999, the Company entered into a series of transactions to acquire an additional ownership interest of

34.7% in Endesa-Chile through a public offering of shares (Oferta Pública de Acciones) for a total purchase price of

ThCh$1,030,014,725 (historic pesos) in cash. This increased the Company’s ownership from approximately 25.3% to

approximately 60.0%. Under Chile GAAP, goodwill of ThCh$642,296,073 has been recorded and is being amortized

on a straight-line basis over 20 years. Under U.S. GAAP, goodwill of ThCh$750,060,726 has been recorded and is being

amortized on a straight-line basis over 20 years.

In April 1999, through its subsidiary Aguas Puerto S.A., the Company purchased a 40.4% interest in Esval S.A. for

approximately ThCh$72,422,378 in cash. Goodwill of ThCh$20,034,684 has been recorded and is being amortized on

a straight-line basis over 20 years.

For acquisitions accounted for using the purchase method, assets and liabilities have been consolidated as of the purchase

date and earnings from the acquisitions have been included in consolidated earnings of the Company subsequent to

the purchase date.

Segment disclosures:

The Company is primarily engaged in the distribution, generation and transmission of electricity in Chile, Argentina, Brazil,

Colombia and Peru. Enersis provides these and other services through four business segments:

(cid:127)

Generation

Distribution

Engineering Services and Real Estate

Corporate and other

Generation involves the generation of electricity primarily through its subsidiary Endesa-Chile. Distribution involves the

supply of electricity to regulated and unregulated customers. Engineering Services and Real Estate includes engineering

services and real estate development. Corporate and other includes computer-related data processing services, private

water utilities (for the year ended December 31, 1999), and the sale of electric-related supplies and equipment. The

Company’s reportable segments are strategic business units that offer different products and services and are managed

separately. The methods of revenue recognition by segment are as follows:

(cid:127)

Generation

Revenue is recognized when energy and power output is delivered and capacity is provided at rates speciﬁ ed under

contract terms or prevailing market rates.

(cid:127)

Distribution- Operating Revenues

Revenue is recognized when energy and power is provided at rates speciﬁ ed under contract terms or prevailing market

rates.

(cid:127)

Distribution- Non Operating Revenues

Revenue is recognized as services are provided, such as public light posts, telephone poles, and other services related

to distribution services.

1
1

6
6

2
2

/
/

(cid:127)

Engineering Services and Real Estate

Revenue is recognized as services are provided, or when projects are sold.

(cid:127)

Corporate and Other

Revenue is recognized as services are provided, or when supplies or equipment are sold.

The following segment information has been disclosed in accordance with U.S. reporting requirements; however, the

information presented has been determined in accordance with Chilean GAAP:

2000:
Sales to unafﬁ liated customers

Intersegment sales

Total revenues

Generation

Distribution

Engineering

services and
real estate

ThCh$

Corporate
and other

ThCh$

Eliminations

Consolidated

ThCh$

680,418,590 1,915,513,282

46,427,221

34,385,662

- 2,676,744,755

229,921,521

28,571,711

31,353,659

25,051,602

(314,898,493)

910,340,111 1,944,084,993

77,780,880

59,437,264

(314,898,493) 2,676,744,755

Operating income

259,154,378 264,049,016

14,520,312

(8,551,438)

7,477,849

536,650,117

Participation in net income of afﬁ liate companies

3,452

71,065

74,517

Depreciation and amortization

164,614,685

236,458,550

1,227,510

48,212,506

(258,674)

450,254,576

Identiﬁ able assets including investment in related companies

5,841,327,996 5,830,367,016

138,941,636

4,591,409,845 (4,989,081,675) 11,412,964,818

Capital expenditures

87,051,233 243,224,042

99,028

1,744,634

333,018,938

2001:
Sales to unafﬁ liated customers

Intersegment sales

Total revenues

811,791,137 2,064,202,101

34,025,879

60,253,467

2,970,272,584

203,043,154

42,432,733

27,511,309

29,672,554

(302,659,750)

1,014,834,291 2,106,634,834

61,537,188

89,926,021

(302,659,750) 2,970,272,584

Operating income

337,839,964

375,243,372

9,838,130

(4,412,906)

14,058,204

732,566,764

Participation in net income of afﬁ liate companies

(10,053,452)

(333,730)

(10,387,182)

Depreciation and amortization

145,720,093

252,696,067

1,205,144

54,846,587

(258,673)

454,209,218

Identiﬁ able assets including investment in related companies

6,176,282,881 6,126,274,349

131,443,284

4,801,679,448 (4,847,525,289) 12,388,154,673

Capital expenditures

(51,429,536) (279,602,805)

(403,392)

(169,836)

(331,605,569)

A summary of activities by geographic area is as follows:

2000:
Total revenues

Chile

ThCh$

Argentina

ThCh$

Perú

ThCh$

Brazil

ThCh$

Colombia

ThCh$

Total

ThCh$

678,872,943

737,238,399

227,173,863

615,545,031

417,914,519

2,676,744,755

Long-lived assets (net) (1)

2,721,426,266 1,398,666,634 1,033,763,703

1,218,147,673 2,312,280,003 8,684,284,279

2001:
Total revenues

781,662,453

803,255,207

257,756,449

671,512,735

456,085,740

2,970,272,584

Long-lived assets (net) (1)

2,296,930,987 1,517,365,212

1,139,769,240

1,887,430,149 2,503,212,820 9,344,708,408

(1) Long-lived assets include property, plant and equipment.

Concentration of risk:

The Company does not believe that it is exposed to any unusual credit risk from any single ﬁ nancial institution. The

Company’s debtors are dependent on the economy in Latin America, which could make them vulnerable to downturns

in the economic activity in the countries in which the Company operates.

No single customer accounted for more than 10% of revenues for the years ending December 31, 1999, 2000 and 2001.

Schedule of debt maturity:

Following is a schedule of debt maturity in each of the next ﬁ ve years and thereafter:

2002
2003
2004
2005
2006
Thereafter

Total

ThCh$

678,815,180
2,103,999,654
1,076,026,296
175,020,284
560,911,881
1,456,220,868

6,050,994,163

h) Disclosure regarding interest capitalization:

Interest cost incurred
Interest capitalized under Chilean GAAP
Interest capitalized under U.S. GAAP

Year ended December 31,

2000
ThCh$

505,173,387
20,702,535
54,093,041

2001
ThCh$

443,904,173
23,544,000
28,289,549

1
1

6
6

4
4

/
/

Cash ﬂ ow information:

(i)

The statement of cash ﬂ ows under Chile GAAP differs in certain respects from the presentation of a statement of cash

ﬂ ow under U.S. GAAP as follows:

Year ended December 31,

2000
ThCh$

2001
ThCh$

Cash provided by operating activities under Chilean GAAP
Development stage subsidiaries

523,000,822
-

643,612,242
1,265,918

Cash provided by operating activities under U.S. GAAP

523,000,822

644,878,160

Cash provided by (used in) ﬁ nancing activities under Chilean GAAP
Development stage companies
Repurchase of Yankee Bonds

(790,572,903)
-
-

(59,625,366)
(957,008)
172,008,613

Cash provided by (used in) ﬁ nancing activities under U.S. GAAP

(790,572,903)

111,426,239

Cash provided by (used in) investing activities under Chilean GAAP
Development stage companies
Repurchase of Yankee Bonds

171,471,913
-
-

(488,970,475)
(301,838)
(172,008,613)

Cash provided by (used in) investing activities under U.S. GAAP

171,471,913

(661,280,926)

(ii) Cash and cash equivalents includes all highly liquid debt instruments purchased with a maturity of three months or

less:

Cash
Time deposits
Marketable securities
Other current assets

Year ended December 31,

2000
ThCh$

27,255,582
77,376,402
-
11,907,534

2001
ThCh$

36,552,229
172,925,470
192,474
1,812,935

Total cash and cash equivalents

116,539,518

211,483,108

(iii) Additional disclosures required under U.S. GAAP are as follows:

Interest paid during the year
Income taxes paid during the year
Assets acquired under capital leasing

Year ended December 31,

2000
ThCh$

370,662,184
149,846,117
2,246,761

2001
ThCh$

393,435,333
128,347,973
231,641

Disclosures about fair value of ﬁ nancial instruments

The following methods and assumptions were used to estimate the fair value of each class of ﬁ nancial instruments as

of December 31, 2000 and 2001 for which it is practicable to estimate that value:

(cid:127)

Cash

The fair value of the Company’s cash is equal to its carrying value.

(cid:127)

Time deposits

The fair value of time deposits approximates carrying value due to the relatively short-term nature.

(cid:127) Marketable securities

The fair value of marketable securities is based on quoted market prices of the common stock held and approximates

carrying value.

(cid:127)

Long-term accounts receivable

The fair value of long-term accounts receivable was estimated using the interest rates that are currently offered for loans

with similar terms and remaining maturities.

(cid:127)

Long-term debt

The fair value of long-term debt was based on rates currently available to the Company for debt with similar terms and

remaining maturities.

•

Derivative instruments

Estimates of fair values of derivative instruments for which no quoted prices or secondary market exists have been

made using valuation techniques such as forward pricing models, present value of estimated future cash ﬂ ows, and

other modeling techniques. These estimates of fair value include assumptions made by the Company about market

variables that may change in the future. Changes in assumptions could have a signiﬁ cant impact on the estimate of

fair values disclosed. As a result such fair value amounts are subject to signiﬁ cant volatility and are highly dependent

on the quality of the assumptions used.

The estimated fair values of the Company’s ﬁ nancial instruments compared to Chilean GAAP carrying amounts are

as follows:

As of December 31,

2000

2001

Carrying
amount
ThCh$

Fair
Value
ThCh$

Carrying
Amount
ThCh$

Fair
Value
ThCh$

Cash
Time deposits
Marketable securities
Accounts receivable (1)
Notes receivable, net
Other accounts receivable, net
Amounts due from related companies
Long-term accounts receivable
Accounts payable and other
Notes payable
Long-term debt
Derivatives instruments (2)

27,255,582
77,376,402
11,952,705
474,887,215
9,507,985
60,224,647
163,434,585
46,112,705
(253,982,234)
(242,757,028)
(5,533,802,481)
(1,719,000)

27,255,582
77,376,402
11,952,705
474,887,215
9,507,985
60,224,647
163,434,585
46,112,705
(253,982,234)
(242,757,028)
(5,452,244,783)
124,700,793

36,552,229
172,925,470
197,157
439,736,322
11,668,161
63,966,838
183,191,621
98,935,497
(258,217,720)
(271,257,985
(6,050,994,163)
(77,652,775)

36,552,229
172,925,470
197,157
439,736,322
11,668,161
63,966,838
183,191,621
98,935,497
(258,217,720)
(271,257,985)
(6,011,052,665)
126,587,662

(1) Accounts receivable is presented net of the regulated assets amounting to ThCh$94,486,000 as of December 31, 2001 (see Note 5).
(2) Fair values of derivative instruments includes commodity, ﬁ nancial and embedded derivatives, however as only ﬁ nancial
derivatives are accounted for under Chilean GAAP only ﬁ nancial derivatives are included in the carrying amounts (see paragraph (k) ).

1
1

6
6

/
/

k) Derivative instruments

The Company is exposed to the impact of market ﬂ uctuations in the price of electricity, primary materials such as natural

gas, petroleum, coal, and other energy-related products, interest rates, and foreign exchange rates. The Company

employs policies and procedures to manage its risks associated with these market ﬂ uctuations on a global basis through

strategic contract selection, ﬁ xed-rate and variable-rate portfolio targets, net investment hedges, and ﬁ nancial derivatives.

All derivatives not qualifying for the normal purchase and sales exemption under SFAS No. 133 are recorded at their

fair value. On the date that swaps, futures, forwards or option contracts are entered into, the Company designates the

derivative as either a normal purchase or sale contract or leaves the derivative undesignated and marks it to market,

with the exception of net investment hedges. The Company does not have the appropriate documentation in place

to designate contracts as hedges of a forecasted transaction or future cash ﬂ ows (cash ﬂ ow hedge) or as a hedge of a

recognized asset, liability or ﬁ rm commitment (fair value hedge).

The Company has classiﬁ ed their derivatives into the following general categories: commodity derivatives, embedded

derivatives, and ﬁ nancial derivatives. Certain energy and other contracts for the Company’s operations in Chile are

denominated in the US dollar. According to SFAS No. 133, an embedded foreign currency derivative should be separated

from the host contract because none of the applicable exclusions are met. For purposes of evaluating the functional

currency of the Company’s subsidiaries in Argentina, Peru, Brazil, and Colombia, the Company applied BT 64, consistent

with the methodology described in paragraph (u), thus the functional currency of these subsidiaries was the US dollar

as these subsidiaries were remeasured into US dollars because foreign subsidiaries operate in countries exposed to

signiﬁ cant risks as determined under BT 64.

The following is a summary of the Company’s adjustment to fair values for all identiﬁ ed derivative contracts at the date

of implementation of SFAS No. 133 on January 1, 2001 and as of the year-ended December 31, 2001.

Commodity derivatives
Embedded derivatives
Financial derivatives

Effects of minority interest
Deferred tax effects

Distribution
ThCh$

15,855,296
24,530
(1,602,068)
14,277,758
(7,716,267)
(5,034,259)

As of January 1, 2001
Generation
ThCh$

124,188,805
(8,380,385)
(3,666,383)
112,142,037
(53,081,230)
(40,185,082)

Total
ThCh$

140,044,101
(8,355,855)
(5,268,451)
126,419,795
(60,797,497)
(45,219,341)

Cumulative change in accounting principle

1,527,232

18,875,725

20,402,957

Commodity derivatives
Embedded derivatives
Financial derivatives

Investment in related companies
Derivative instruments U.S. GAAP

78,570,101
(22,417,154)
342,452
56,495,399
-

131,827,201
(3,763,128)
(18,472,392)
109,591,681
38,153,357

210,397,302
(26,180,282)
(18,129,940)
166,087,080
38,153,357

Shareholders’ equity adjustment

56,495,399

147,745,038

204,240,437

Commodity derivatives

Certain of the Company’s generation and distribution commodity contracts meet the deﬁ nition of a derivative under

SFAS No. 133 and are required to be accounted for at fair value. These are contracts that (i) have an underlying, which

is the market price of power at the delivery location and a notional amount speciﬁ ed in the contract; (ii) have no initial

payment on entering into the contract; and (iii) do not have a net settlement provision but has the characteristic of

net settlement because power is readily convertible to cash, as it is both fungible and actively traded in the country of

generation or country of distribution.

The Company’s commodity contracts that are requirements contracts were concluded to not have notional amounts,

if they only had maximum amounts or no speciﬁ ed amounts, and did not include an implicit minimum amount in a

settlement or a default clause. A requirements contract allows the purchaser to use as many units of power as required

to satisfy its actual needs for power during the period of the contract, and the party is not permitted to buy more than

its actual needs.

The Company concluded that all of its power is readily convertible to cash as energy is actively traded, or the Company

has access, to markets where energy is actively traded. However, only certain participants have access to the energy

markets, thus determination as to whether energy could be considered readily convertible to cash was analyzed on a

case by case basis. Currently, Chilean distributors do not have access to the Chilean spot market, however this could

change in the future if energy regulations are changed. The Company has also concluded that multiple-delivery long-

term power contracts meet the net settlement characteristic. Multiple-delivery long-term power contracts are readily

convertible to cash because the Company operates in countries with active spot markets, that although they contain

varying levels of liquidity, can rapidly absorb the contract’s quantities at each delivery date without signiﬁ cantly affecting

the price, and thus meet the deﬁ nition of net settlement.

k) Derivative instruments, continued:

Derivative contracts were evaluated for qualiﬁ cation under the normal purchase and sale exception, if it was probable

the contracts would result in physical delivery, and if the contract did not contain a price that was tied to an unrelated

underlying, such as, the U.S. Price for Finished Products (PPI) index, or if the price of the contract is denominated in a

currency other than the functional currency of one of the parties to the contract and the commodity is not internationally

denominated in that currency. The Company does not consider the local country or U.S. Consumer or Purchase Price

Indexes to be clearly and closely related to the energy purchased or sold because these indices measure the level of

price changes of certain items in the economy and are not a direct factor in the production of energy.

The Company’s Argentine generation entities have access to the Brazilian energy market through an interconnection

system between the two markets. In order to calculate the fair values of the purchase and sale contracts related to the

energy to be sold in the Brazilian market, the Argentine market prices were used. The Company believes this is the best

measure for fair value, because in the event that the Brazilian market prices are below the cost to produce the energy

in Argentina, the Company will sell the energy in Argentina and purchase the energy from the spot market in Brazil.

Additionally, the interconnection line was established to sell energy generated in Argentina in the Brazilian market, as

the Brazilian energy market heavily relies on hydro-electric generation and has historically had signiﬁ cant problems with

meeting its energy needs economically due to lack of rainfall.

Because both the purchases and sales interconnection contracts are for periods up to 20 years in complex markets,

where no similar term forward market information is available, the Company has estimated such values based on the

best information available, including using modeling and other valuation techniques. The Company has recorded the

best estimate of fair value, however with different assumptions such as interest rates, inﬂ ation rates, exchange rates,

electricity rates, and increases in cost trends, materially different fair values could result. As a result such estimates

1
1

6
6

8
8

/
/

are highly volatile and dependent upon the assumptions used. The assumption to measure the fair value of these

interconnection related contracts using the Argentine market prices has a signiﬁ cant effect on the Company’s net income

and shareholder’s equity.

If Brazilian market prices had been used instead of Argentine prices estimated fair values of the related energy contracts

a signiﬁ cantly different fair value would result. Had the Company used Brazilian price curves in the valuation, the

Company estimates on a preliminary basis that net fair value of such contracts would result in a loss of approximately

ThCh$196,512,379 and ThCh$285,827,609 as of January 1, 2001 and December 31, 2001, respectively.

Similarly, the Argentine energy market does not have long-term quoted foreign energy prices. The Company does not

have concessions to sell the Argentine generated energy in the Brazilian market to any parties other than those currently

contracted. Therefore the Company views the interconnection as an extension of the Argentine market and as a more

appropriate measure of the fair value of energy. The Company has estimated a range of fair values, which result in gains

of between ThCh$106,780,682 and ThCh$698,822,690 as of January 1, 2001 and gains of between ThCh$105,399,643

and ThCh$785,224,431 as of December 31, 2001. Based on the current available information, the Company has recorded

the low end of this range as its best estimate of interconnection contract fair values. Such values are included in the

reconciliation to U.S. GAAP in paragraph (aa).

k) Derivative instruments, continued:

Embedded Derivative Contracts

The Company enters into certain contracts that have embedded features that are not clearly and closely related to the

host contract. As speciﬁ ed in SFAS No. 133, bifurcation analysis focuses on whether the economic characteristics and

risks of the embedded derivative are clearly and closely related to the economic characteristics and risks of the host contract.

In certain identiﬁ ed contracts, the host service contract and the embedded feature are not indexed to the same underlying

and changes in the price or value of service will not always correspond to changes in the price of the commodity to which

the contract is indexed. U.S. GAAP requires embedded features to be measured at fair value as freestanding instruments.

Unless the embedded contracts are remeasured at fair value under otherwise applicable GAAP, the embedded feature

must be valued at fair value with changes in fair value reported in earnings as they occur.

Embedded foreign currency derivative instruments are not separated from the host contract and considered a derivative

instrument if the host contract is not a ﬁ nancial instrument and it requires payments denominated in either: (1) the

functional currency of any substantial party to the contract, (2) the local currency of any substantial party to the contract,

(3) the currency used because the primary economic environment is highly inﬂ ationary, or (4) the currency in which

the good or service is routinely denominated in international commerce.

Financial Derivatives

Changes in interest rates expose the Company to risk as a result of its portfolio of ﬁ xed-rate and variable-rate debt. The

Company manages interest rate risk exposure on a global basis by limiting its variable-rate and ﬁ xed-rate exposures

to certain variable/ﬁ xed mixes set by policy. The Company manages interest rate risk through the use of interest rate

swaps and collars and cross-currency swaps. The Company does not enter into ﬁ nancial instruments for trading or

speculative purposes.

Net Investment Hedges

The Company is also exposed to foreign currency risk arising from long-term debt denominated in foreign currencies, the

majority of which is the US dollar. This risk is mitigated, as a substantial portion of the Company’s revenues are either

directly or indirectly linked to the US dollar. Additionally, the Company records the foreign exchange gains and losses on

liabilities related to net investments in foreign countries which are denominated in the same currency as the functional

currency of those foreign investments. Such unrealized gains and losses are included in the cumulative translation

adjustment account in shareholders’ equity, and in this way act as a net investment hedge of the exchange risk affecting

the investments (see Note 11 (c) and Note 22 (f) for further detail). The Company also uses short duration forward

foreign currency contracts and swaps, and cross-currency swaps, where possible, to manage its risk related to foreign

currency ﬂ uctuations.

Reclassiﬁ cations to U.S. GAAP

Certain reclassiﬁ cations would be made to the Chilean GAAP income statement in order to present Chilean GAAP

amounts in accordance with presentation requirements under U.S. GAAP. Amortization of negative goodwill, amortization

of goodwill, and certain other non-operating income and expense, would be included in operating income. Recoverable

taxes included in other non-operating revenues would be recorded as part of income taxes under U.S. GAAP. The gain

from the repurchase of Yankee bonds by Enersis S.A. and Endesa Chile S.A. included in non-operating income under

Chilean GAAP would be presented as an extraordinary gain according to U.S. GAAP. Equity participation in income or

losses of related companies included in non-operating income would be presented after income taxes and minority

interest in accordance with U.S. GAAP. The following reclassiﬁ cations included in the column labeled “Reclassiﬁ cations”

disclose amounts using a U.S. GAAP presentation, although the amounts displayed have been determined in accordance

with Chilean GAAP:

Operating income
Non-operating expense, net
Income taxes
Minority interest
Equity participation in income of related
companies, net
Amortization of negative goodwill

Net loss

Operating income
Non-operating expense, net
Income taxes
Minority interest
Equity participation in loss of related
companies, net
Amortization of negative goodwill ..
Net income before extraordinary gain
Extraordinary gain

Net income

Year ended December 31, 2000

Chilean GAAP
ThCh$

Reclassiﬁ cation
ThCh$

U.S. GAAP Presentation
ThCh$

536,650,117
(164,477,127)
(142,061,655)
(178,640,998)

-
41,404,813

92,875,150

Chilean GAAP
ThCh$

732,566,764
(483,496,386)
(132,706,349)
(121,507,397)

-
46,069,614
40,926,246
-

40,926,246

250,827,798
(213,578,572)
4,081,070
-

74,517
(41,404,813)

787,477,915
(378,055,699)
(137,980,585)
(178,640,998)

74,517
-

92,875,150

Year ended December 31, 2001
Reclassiﬁ cation
ThCh$

U.S. GAAP Presentation
ThCh$

(81,568,966)
106,734,840
7,880,395
-

(10,387,182)
(46,069,614)
(23,410,527)
23,410,527

650,997,798
(376,761,546)
(124,825,954)
(121,507,397)

(10,387,182)
-
17,515,719
23,410,527

40,926,246

1
1

7
7

0
0

/
/

Certain reclassiﬁ cations would be made to the Chilean GAAP balance sheet in order to present Chilean GAAP amounts

in accordance with presentation requirements under U.S. GAAP. Deferred taxes from depreciation differences that

are recorded as short-term under Chilean GAAP would be recorded as long-term under U.S. GAAP. Debt discounts

are included in other assets in Chilean GAAP while the discount would be offset against the debt under U.S. GAAP.

The amounts receivable and payable related to ﬁ nancial derivatives have been recorded in the balance sheet at their

gross amounts, whereas, these amounts would have been recorded at their net amounts by ﬁ nancial institution under

U.S. GAAP, provided the contracts have net settlement provisions. Real estate properties under development and

construction-in-progress are included in current assets as inventory in Chilean GAAP and under U.S. GAAP such assets

would have been included as property, plant and equipment. Additionally, the regulated asset recorded during 2001 by

Coelce and Cerj, Brazilian subsidiaries, has been partially recorded in trade receivables and an additonal component was

recorded in current assets by Coelce under Chilean GAAP. However, under U.S. GAAP the presentation of these regulated

assets should be classiﬁ ed as non-current assets as the recovery of these assets is not expected in the short term. These

reclassiﬁ cations exclude consolidation of development stage companies, the effect of which is immaterial.

The effect of the following reclassiﬁ cations included in the column labeled “Reclassiﬁ cations” discloses amounts using a

U.S. GAAP presentation although the amounts displayed have been determined in accordance with Chilean GAAP:

Current assets
Property, plant, and equipment, net
Other assets

Chilean GAAP
ThCh$

996,648,333
8,684,284,279
1,732,032,206

As of December 31, 2000
Reclassiﬁ cation
ThCh$

U.S. GAAP Presentation
ThCh$

(32,263,097)
31,261,062
(11,912,512)

964,385,236
8,715,545,341
1,720,119,694

Total assets

11,412,964,818

(12,914,547)

11,400,050,271

Current liabilities
Long-term liabilities
Minority interest
Shareholders’ equity

1,583,569,157
5,072,614,109
3,622,062,715
1,134,718,837

(7,885,701)
(5,028,846)
-
-

1,575,683,456
5,067,585,263
3,622,062,715
1,134,718,837

Total liabilities and shareholders’ equity

11,412,964,818

(12,914,547)

11,400,050,271

Current assets
Property, plant, and equipment, net
Other assets

Chilean GAAP
ThCh$

1,128,589,120
9,344,708,408
1,914,857,145

As of December 31, 2001
Reclassiﬁ cation
ThCh$

U.S. GAAP Presentation
ThCh$

(205,150,674)
26,468,905
(51,171,013)

923,438,446
9,371,177,313
1,863,686,132

Total assets

12,388,154,673

(229,852,782)

12.158,301,891

Current liabilities
Long-term liabilities
Minority interest
Shareholders’ equity

1,591,556,680
5,662,488,179
3,954,923,425
1,179,186,389

(107,385,560)
(122,467,222)
-
-

1,484,171,120
5,540,020,957
3,954,923,425
1,179,186,389

Total liabilities and shareholders’ equity

12,388,154,673

(229,852,782)

12,158,301,891

m) Employee Beneﬁ t Plans

Enersis S.A. and its subsidiaries sponsor various beneﬁ t plans for its current and retired employees. A description of

such beneﬁ ts follows:

Severance indemnities

The provision for severance indemnities, included in the account “Accrued expenses” short and long-term is calculated

in accordance with the policy set forth in Note 2 (n), using the current salary levels of all employees covered under the

severance indemnities agreement, an assumed discount rate of 9.5% for the years ended December 31, 1999, 2000 and

2001, and an estimated average service period based on the years of services for the Company.

Beneﬁ ts for Retired Personnel

Other beneﬁ ts provided to certain retired personnel of Enersis include electrical service rate subsidies, additional medical

insurance and additional post-retirement beneﬁ ts. Descriptions of these beneﬁ ts for retired personnel are as follows:

Electrical rate service

This beneﬁ t is extended only to certain retired personnel of Enersis. These electric rate subsidies result in the eligible

retired employees paying a percentage of their total monthly electricity costs, with Enersis paying the difference.

ii) Medical beneﬁ ts

This beneﬁ t provides supplementary health insurance, which covers a portion of health beneﬁ ts not covered under

the institutional health beneﬁ ts maintained by employees of Enersis. This beneﬁ t expires at the time of death of the

pensioner.

iii)

Supplementary pension beneﬁ ts

Eligible employees are able to receive a monthly amount designed to cover a portion of the difference between their

salary at the point of retirement and the theoretical pension that would have been received had the employee reached

the legal retirement age of the Institución de Previsión Social (Institute of Social Welfare). This beneﬁ t expires upon

the death of the pensioner for the Enersis employee, however, continues to cover the surviving-spouse in the case of

employees of the subsidiary Endesa-Chile.

iv) Worker’s compensation beneﬁ ts

Employees that were entitled to Worker’s compensation insurance in prior years for work related accidents receive

beneﬁ ts from the Company as such insurance has expired. This beneﬁ t continues at the time of death of the pensioner,

to cover the surviving-spouse.

The Company has recognized liabilities related to complementary pension plan beneﬁ ts and other post-retirement

beneﬁ ts as stipulated in collective bargaining agreements. Under U.S. GAAP, post-retirement employee beneﬁ ts have

been accounted for in accordance with SFAS No. 87 and SFAS No. 106, with inclusion of prior-period amounts in current

years income as the amounts are not considered signiﬁ cant to the overall ﬁ nancial statement presentation. The effects of

accounting for post-retirement beneﬁ ts under U.S. GAAP have been presented in paragraph (aa), above. The following

data are presented under U.S. GAAP for Company’s post-retirement beneﬁ t plans.

1
1

7
7

2
2

/
/

Changes in beneﬁ t (obligations)

Beneﬁ t (obligations) at January 1
Price-level restatement
Foreign exchange effect
Net periodic expense
Beneﬁ ts paid
Company contributions

Pension Beneﬁ ts

Other Beneﬁ ts

2000
ThCh$

2001
ThCh$

2000
ThCh$

2001
ThCh$

(115,175,964)
5,170,269
(3,670,179)
(10,883,108)
816,456
172,988

(123,569,537)
3,715,475
(15,284,730)
(14,353,009)
1,097,357
8,009,986

(5,271,536)
93,472
-
(2,141,808)
1,853,117
-

(5,466,755)
132,093
-
(11,967,321)
879,686
-

Beneﬁ t (obligations) at December 31

(123,569,538)

(140,384,458)

(5,466,755)

(16,422,297)

Funded Status of the Plans
Projected Beneﬁ t Obligation
Fair value of plan assets
Funded status
Unrecognized loss
Unrecognized net transition obligation

(214,353,707)
85,409,383
(128,944,324)
(14,117,051)
19,491,838

(217,712,560)
90,803,782
(126,908,778)
(29,642,525)
16,166,845

(8,207,710)
-
(8,207,710)
-
2,740,955

(18,876,334)
-
(18,876,334)
-
2,454,037

Net liability recorded under U.S. GAAP

(123,569,537)

(140,384,458)

(5,466,755)

(16,422,297)

Change in plan assets

Fair value of plan assets, beginning
Foreign exchange effect
Actual return on plan assets
Employer contributions
Plan participant contributions
Beneﬁ ts paid

Fair value of plan assets, ending

Assumptions as of December 31

Discount rate
Salary increase
Return on plan assets

Components of net periodic
Beneﬁ ts expenses
Service cost
Interest cost
Expected return on assets
Amortization gain (loss)
Amortization of transition asset

Pension Beneﬁ ts
2001
ThCh$

85,409,383
(2,474,036)
11,843,898
7,981,778
1,522,326
(13,479,567)

90,803,782

Pension Beneﬁ ts

Other Beneﬁ ts

2000
ThCh$

15.0%
9.6%
10.4%

2001
ThCh$

12.2%
7.0%
10.4%

2000
ThCh$

9.5%
-
-

2001
ThCh$

11.8%
-
-

(727,061)
(15,637,310)
996,956
5,923,776
(1,439,469)

(677,397)
(22,907,916)
15,365,359
(3,726,996)
(2,406,059)

(1,235,032)
(695,934)
-
-
(210,842)

(10,805,028)
(957,790)
-
-
(204,503)

Net periodic expenses

(10,883,108)

(14,353,009)

(2,141,808)

(11,967,321)

n) Comprehensive income (loss)

In accordance with U.S. GAAP, the Company reports a measure of all changes in shareholders’ equity that result from

transactions and other economic events of the period other than transactions with owners (“comprehensive income”).

Comprehensive income is the total of net income and other non-owner equity transactions that result in changes in

net shareholders’ equity.

The following represents accumulated other comprehensive income balances as of December 31, 1999, 2000 and 2001

(in thousands of constant Chilean pesos as of December 31, 2001).

Chilean GAAP
cumulative
translation
adjustment

2000
Effect of U.S. GAAP
adjustments on
cumulative
translation
adjustment

Accumulated
Other
Comprehensive
Income (Loss)

Beginning balance
Credit (charge) for the period
Ending balance

8,208,478
1,298,054
9,506,532

4,015,186
(4,281,630)
(266,444)

12,223,664
(2,983,576)
9,240,088

Chilean GAAP
cumulative
translation
adjustment

2001
Effect of U.S. GAAP
adjustments on
cumulative
translation
adjustment

Accumulated
Other
Comprehensive
Income (Loss)

Beginning balance
Credit (charge) for the period
Ending balance

9,506,532
18,892,550
28,399,082

(266,444)
(3,392,426)
(3,658,870)

9,240,088
15,500,124
24,740,212

Recent accounting pronouncements

On July 20, 2001, the Financial Accounting Standards Board issued Statements No. 141, “Business Combinations” (“SFAS

No. 141”) and No. 142, “Goodwill and Other Intangible Assets” (“SFAS No. 142”). SFAS No. 141 requires all business

combinations initiated after June 30, 2001 to be accounted for using the purchase method. Poolings initiated prior June

30, 2001 are grandfathered. SFAS No. 142 replaces the requirements to amortize intangible assets with indeﬁ nite lives

and goodwill with a requirement for an impairment test. SFAS No. 142 also requires an evaluation of intangible assets

and their useful lives and a transitional impairment test for goodwill and certain intangible assets. After transition, the

impairment tests are to be performed annually. The Company is required to adopt SFAS No. 142 on January 1, 2002.

Under SFAS No. 142, the Company will cease to amortize existing goodwill related to previous acquisitions beginning on

January 1, 2002. The effect of not amortizing intangible assets with indeﬁ nite lives and goodwill will increase annual net

income determined under U.S. GAAP by approximately ThCh$79,056,391, notwithstanding any future transactions. The

Company is still assessing the extent of impairment, if any, of intangible assets with indeﬁ nite lives and goodwill, that

may need to be recorded as a result of the adoption of these new accounting standards.

In June 2001 the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 143,

“Accounting for Asset Retirement Obligations” (“SFAS No. 143”). This standard requires that obligations associated with

the retirement of tangible long-lived assets be recorded as liabilities when those obligations are incurred, with the amount

of the liability initially measured at fair value. Upon initially recognizing a liability for an asset retirement obligation, an

entity must capitalize the cost by recognizing an increase in the carrying amount of the related long-lived asset. Over

1
1

7
7

4
4

/
/

time, this liability is accreted to its present value, and the capitalized cost is depreciated over the useful life of the related

asset. Upon settlement of the liability, an entity either settles the obligation for its recorded amount or incurs a gain or

loss upon settlement. SFAS No. 143 is effective for ﬁ nancial statements issued for ﬁ scal years beginning after June 15,

2002. The Company will adopt SFAS No. 143 effective January 1, 2003. The Company does not expect that the adoption

of this statement will have a material impact on their results of operations, ﬁ nancial position or cash ﬂ ows.

In August 2001, the FASB issued Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment

or Disposal of Long-Lived Assets” (“SFAS 144”). SFAS 144 supersedes FASB Statement No. 121, “Accounting for the

Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,” and the accounting and reporting

provisions of APB Opinion No. 30, “Reporting the Results of Operations - Reporting the Effects of Disposal of a Segment

of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions,” for the disposal of a

segment of a business (as previously deﬁ ned in that opinion). SFAS 144 requires that one accounting model be used

for long-lived assets to be disposed of by sale, whether previously held and used or newly acquired, and broadens the

presentation of discontinued operations to include more disposal transactions than were included under the previous

standards. For the Company and other calendar-year companies, SFAS No. 144 is effective beginning January 1, 2002.

The Company does not expect the adoption of SFAS 144 to have a material impact on its results of operations, ﬁ nancial

position or cash ﬂ ows.

In April 2002, the FASB issued Statement of Financial Accounting Standards No. 145, “Rescission of FASB Statements

No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections”. This statement rescinds FASB

Statement No. 4, “Reporting Gains and Losses from Extinguishment of Debt”, and an amendment of that Statement,

Statement No. 64, “Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements”. This Statement also amends

other existing authoritative pronouncements to make various technical corrections, clarify meanings, or describe their

applicability under changed conditions. The provisions of SFAS 145 related to the rescission of SFAS No. 4 shall be applied

in ﬁ scal years beginning after May 15, 2002, although early application is encouraged. Any gain or loss on extinguishment

of debt that was classiﬁ ed as an extraordinary item in prior periods presented that does not meet the criteria in APB

Opinion 30, “Reporting the Results of Operations—Reporting the Effects of Disposal of a Segment of a Business, and

Extraordinary, Unusual and Infrequently Occurring Events and Transactions” for classiﬁ cation as an extraordinary item

shall be reclassiﬁ ed. Debt extinguishments used as part of an entity’s risk management strategy represent one example

of debt extinguishments that do not meet the criteria for classiﬁ cation as extraordinary items in APB Opinion No. 30.

The Company will apply SFAS 145 beginning January 1, 2002. The Company’s application of SFAS 145 will require the

reclassiﬁ cation of the extraordinary gain on early retirement of Yankee bonds of ThCh$23,410,527 (as presented in Note

33 l(l) to other non-operating income, so upon application there will be no presentational difference between Chile and

U.S. GAAP for the early extinguishment of debt.

(p) Economic situation in Argentina

Due to the changes in the economic situation in Argentina, the Argentine Government decided to amend the Convertibility

Law which had been in force since March 1991, and adopted certain measures the main effects of which are the following:

the devaluation of the Argentine peso with respect to the US dollar, the pesiﬁ cation of certain assets and liabilities

in foreign currency held in the country, the pesiﬁ cation of all private contracts entered into as of January 6, 2002,

the introduction of restrictions on the withdrawal of funds deposited at ﬁ nancial institutions, the need to obtain prior

authorization by the Argentine Central Bank (BCRA) to make transfers abroad in respect of ﬁ nancial loan servicing

payments and dividends.

On a consolidated basis, these investments reﬂ ect total assets of 14 percent, total revenues of 27 percent, and total

operating income of 21 percent, of the related consolidated totals as of December 31, 2001. As described in Notes 23

and 31 to these ﬁ nancial statements, the Company has valued investments in Argentina in accordance with Technical

Bulletin No. 64 issued by the Chilean Association of Accountants. The Argentine Government is still analyzing the

possible implementation of additional policies or modiﬁ cations to those already approved. It is not possible to predict

the future evolution of the situation in the country, nor, accordingly, the impact that this uncertainty may have on the

consolidated ﬁ nancial statements of the Company due to the investments held in companies present in Argentina. The

consolidated ﬁ nancial statements have been prepared assuming that the Company’s Argentine subisidiaries and equity

method investments will continue as a going concern and do not include any further adjustments that might result from

Note 34

the outcome of these uncertainties.

Subsequent events:

Situation in Argentina

On January 6, 2002, the Congress of the Republic of Argentina approved Law No. 25,561 entitled Public Emergency

and Reform of the Exchange Regime. The law established: the end of convertibility at parity of the Argentine peso 1

to 1 with the US dollar, fees for public services are converted into Argentine pesos at a rate of exchange of 1 to 1, the

indexation clauses based on price indices of other countries are no longer in effect, and the Argentine Government’s

Executive is authorized to renegotiate concession contracts with public service companies.

By function of the powers conferred to the Executive by this law, an ofﬁ cial exchange rate was established at $1.40

Argentine pesos per US dollar for settled foreign commerce transactions and another rate that is “free” from restriction

for all other transactions. The “free” ﬂ oating exchange rate of the US dollar on the day the exchange market opened

was $1.70 per US dollar. (See Note 2(d)(3)).

Subsequently, the Executive Branch agreed to convert all assets and liabilities using a conversion rate into Argentine

pesos of rate of exchange of 1 to 1, except for deposits maintained in the ﬁ nanial system.

On February 12, 2002, the Executive issued Decree No. 293, which granted authority to the Minister of Economics to

renegotiate concession contracts with public service companies. Within the public services included in the renegotiation

of the contracts, the Decree speciﬁ cally mentions the distribution and commercialization of electric energy.

Based on these factors described above and before negotiations have started with the Argentine government, the

Company estimates that net cash ﬂ ows (operating cash ﬂ ows less ﬁ nancing ﬂ ows) for 2002 will decrease by approximately

US$ 112,000,000, from the total of its Latin American operations which represents an 18.7% of total cash ﬂ ows during

2001.

The Company plans to compensate for this reduction in net cash ﬂ ows, during the renegotiation of concession contracts

with the Argentine Government. The economic criteria of these negotiations have been deﬁ ned in the decree, and

it is the Company’s belief that it will be possible to recouperate the diminished net cash ﬂ ows in a reasonable period

of time.

Despite the difﬁ cult economic postion present in Argentina as described above during the months of January and

February 2002, the Company’s subsidiaries and afﬁ liates in Argentina have continued to operate regularly in the electric

sector and continued to service all client contractual demands.

1
1

7
7

6
6

/
/

At the date of issuance of these ﬁ nancial statements and considering the instable political and economic situation in

Argentina, there is uncertainty regarding the correct application of transactions at the ofﬁ cial or “free” ﬂ oating exchange

rate. Thus, it is not possible to determine the current extent of the effects of the situation in Argentina with certainty,

or the future changes that could result.

b. Merger of Subsidiaries

The partners of Compañía Americana de Multiservicios Ltda. and Compañía Americana de Multiservicios Uno Ltda would

like to merge both entities, so that the ﬁ rst absorbs the second. At the date of issuance of these ﬁ nancial statements

the public deed was in the process of being signed. The ﬁ rst transitional artice of the deed was signed and ratiﬁ ed, so

that the merger was effective as of January 1, 2002.

Dissolution of Subsidiaries

According to the minutes of the Extraordinary General Shareholders’ Meeting held on January 28, 2002, the following

companies have been dissolved: Empresa Eléctrica de Panamá S.A., Interocean Development Inc., Sociedad Panameña

de Electricidad S.A. and Estelmar Holding S.A. The assets and liabilities of these companies have been proportionally

distributed according to the shareholder participation of each one of the partners.

Regulated Assets

The Company has no knowledge of other important events occurring after the close of these ﬁ nancial statements that

could affect them signiﬁ cantly, other than what is described in Note 5.

Note 35

Environment:

Edesur S.A.

As of December 31, 2001, the Company incurred environmental expenses of US$ 1,466,000. As of the same period, the

investment related to these expenses was US$770,000.

Endesa S.A.

During the period from January 1 to December 31, 2001, the Company and its subsidiaries have made disbursements

for a value of Th$5,886,203, which mainly correspond to:

Operating expenses: corresponding to studies, follow-up procedures and laboratory analysis.

Investments related to the following projects:

- Central Ralco’s environmental program.

- Central San Isidro environmental management system (EMS) installation and its ISO 14,001 certiﬁ cation.

- Environmental regulation and commitment project in intranet platform.

- DLN installation for the No. 1 unit of the Tal Tal Power Plant (Region II).

- DLN installation for the TG-9171E of the Cabrero Power Plant (Region VIII).

Central Costanera S.A.

During the period from January 1 to December 31, 2001, the Company made disbursements amounting to

US$239,699.

Edegel S.A.

Based on the environment protection regulations for electrical activities the Company ordered the preparation of an

environmental adaptation and management program to be presented before the MEM. The program presented was

approved and established for a 5-year term (expiring in November 2000) to make the necessary investments and

expenses in order to adapt the operations to the regulations and maximum limits permitted. To date, the Company has

complied with the measures established in the program to adapt its operations to the environmental regulations.

Additionally, the Company is subject to an annual environment audit entrusted to independent entities duly authorized

for this purpose and that are contracted directly by the supervising organization of the energy investment.

As of December 31, 2001, the expense directly related to protection of the environment amounted to ThCh$ 415,265.

ENRIQUE GARCIA ALVAREZ

Chief Executive Ofﬁ cer

JUAN CARLO WIECZOREK C.

General Account

JUAN I. DOMINGUEZ ARTEAGA

Adjunct Chief Executive Ofﬁ cer

1
1

7
7

8
8

/
/

Enersis S.A. and Subsidiaries Relevant Facts

Individual Enersis

Deﬁ nitive Dividend

As of April 2, 2001, the Ordinary Stockholders’ Meeting of Enersis S.A. agrees the distribution of the deﬁ nitive minimum

obligatory dividend, charged to the proﬁ t of the period that ended on December 31, 2000, reaching $1.806 per share, which

totals M$14,976,820.

OPAs

On April 2, 2001, the Ordinary Stockholders’ Meeting of Enersis S.A. agrees to have recourse to the provision contained in the

10th transitory article of Law No. 19,705, of December 20, 2000, that “Regulates the Tender Offer for Shares (POPS, OPA in

Spanish), and Establishes Corporate Government Regime”, so that the current Company controller may exercise the option to

freely alienate the shares issued by Enersis S.A., even though the price is substantially higher than the market price, privided

that such alienation is performed in the next three years, counted from day 1 of the month following the month in which such

law was published. Likewise, the already mentioned Stockholders’ Meeting agrees to carry all necessary agreements to duly

comply with and carry out the aforementioned resolution.

Purchasing Powers

On June 28, 2001, the Board of Directors of Enersis S.A., agreed, by unanimous vote of its present members, to open two

Purchasing Powers in Chile to purchase the totality of the stock issued by Chilectra S.A. and the totality of the stock issued by

Compañía Eléctrica del Río Maipo S.A. that are offered on sale by Enersis S.A. The holders of ADSs issued by Chilectra S.A. shall

be able to sell in the Purchasing Power over Chilectra S.A. by exchanging its ADSs into shares issued by Chilectra S.A.

The Chilectra S.A. shares will be purchased at a price of Ch$2,200, legal currency, per share, and the Rio Maipo shares will be

purchased at a price of Ch$250, legal currency, per share. Such prices will be paid in cash and they are identical to the prices

offered in the Purchasing Powers opened by Enersis S.A. on such companies, as of November 21, 2000.

The Purchasing Powers will be opened as of July 3, 2001, date in which the present relevant fact and other pertinent information

will be published in the Diario El Mercurio de Santiago newspaper. Each Purchasing Power will expire at 14:00 of the ﬁ fteenth

day, counted since the publication of an ad in Diario El Mercurio de Santiago announcing that the number of shareholders of

Chilectra S.A., or Río Maipo S.A., as it corresponds, has become lower than 500. Anyway, both Purchasing Powers will expire

not later than December 26, 2001, at 14:00.

Finally, the Board of Directors of the Company made the decision to declare that it is the intention of Enersis S.A. to propose, in

the corresponding corporate instances and subject to applicable legal provisions at the moment, that the shares of Chilectra S.A.

and Rio Maipo S.A, cease to be registered in the national and foreign stock exchanges as it corresponds, as soon as the conditions

for such are given.

After considering the nature of the operations, whose performance depends on the volume of the purchases and sales become

perfected, and the time in which such purchase and sales take place during the in force period of the Purchasing Powers, it is

not possible to a priori determine the effects that they may produce in the result. It is possible to state, though, that the total

investment that the maximum share purchasing might imply, corresponding to the Purchasing Powers previously mentioned,

would amount to the equivalent in Chilean pesos to approximately US$28,7 million.

Enersis Internacional tender offer to purchase bonds

As of November 6, 2001, the Enersis Internacional partnership, a company 100% owned by Enersis S.A., with domicile in the

Cayman Islands, announced in the United States of America Tender offer to purchase in cash the issuing of bonds in dollars

performed by Enersis S.A. (Cayman Islands Agency) on Nov. 1, 1996, whose expiration date is on Dec. 1, 2016 (the “Offer”).

Such issuing of bonds was originally for a total amount of US$350,000,000 (three hundred ﬁ fty million American dollars, herein

after “US$”) for twenty years, that is, to expire on 2016, at a cover annual rate of 7.4% (hereinafter “the Bonds”), and was

registered in the Securities and Exchange Commission (“SEC”) of the United States of America.

The Enersis Internacional Offer is over the total amount of the Bonds that are circulating in the market and that reach the total

of the originally issued, that is, US$350,000,000. The terms and conditions of the Enersis Internacional offer are recorded in

the Offer to Purchase document dated November 6, 2001. The Offer dealer agent is Chase Manhattan International Limited

(“JPMorgan”).

The exact price to be paid by Enersis Internacional for each US$1,000 of Bond capital will be determined by a formula which

is explained in the Offer to Purchase and that will basically be the estimation of a margin or Spread over the yield to maturity

of the United States Treasure Bond with a coupon rate of 5.0%, expiring on August 15, 2011. Enersis Internacional has offered,

as well, to pay all the Bond holders that accept the Offer an amount equivalent to the interest accrued and not paid since the

payment time of the last Bond coupon.

The Offer period has started with this date and will expire at 17:00, New York time, of November 16, 2001, unless Enersis

Internacional decides to extend it or cancel it in advance (the “Termination Date”). The payment of Bonds to those holders

that shall have accepted the offer will happen at the third labored day of transactions in the New York Stock Exchange since

the acceptance from a holder. Once a holder has accepted the Offer, this operation is irrevocable. The remaining conditions

of the Offer shall be contained in the Offer to Purchase.

The result of the Offer will be communicated to the market after the Termination Date (including any extension of it).

On the other hand, it is worth mentioning that the immediate ﬁ nancing needed to carry on the described operation is duly

negotiated in the in the international credit markets.

Extension of the public offer period

As of November 19, 2001, Enersis Internacional informed the extension of the Offer termination date to the market. The Offer

shall now expire at 17:00, New York time, of Wednesday, November 21, 2001, but all the remaining terms and conditions of

the Offer shall remain unaltered.

Finally, and according to the provisions of communication No. 988 of the Superintendence of Securities and Insurance, the

ﬁ nal effects of the operation described in the results of Enersis S.A. cannot be reasonably quantiﬁ ed at this time. These effects

may only be determined once the deﬁ nitive result of the Offer is known.

Latibex

As of December 17, 2001, the entering of Enersis S.A. stock to the so-called Mercado de Valores Latinoamericano de la Bolsa

de Valores de Madrid (Latin American Securities Market of the Madrid Stock Exchange, Latibex) has been formalized, and the

ﬁ rst transactions of the titles in the European market have already been done.

1
1

8
8

0
0

/
/

Chilectra S.A. and Subsidiaries

ADRs

The Board of Directors of Chilectra S.A., in an ordinary meeting held on July 31, 2001, has agreed to put an end to the ADRs

Program, so that the contract of deposit between Chilectra S.A. and JP Morgan (Morgan Guaranty Trust) expires on February

1, 2002. The effects in the results of the Company are not quantiﬁ able.

Compañía Electrica Del Rio Maipo S.A.

For the term ranging from January 1 and December 31, 2001, the following relevant facts happened:

Equity reduction by power of the law

At the end of the period provided for the issuing, subscription and payment of the shares that represent the equity increase

of Compañía Eléctrica del Río Maipo S.A., it has been reduced by the articles 11 and 24 of Law No. 18,046, from December 9,

2001, to the amount of Ch$14,561,360,076, divided in 360,613,552 shares with no nominal value.

Risk classiﬁ cation

As of May 16, 2001, the company informs the Superintendence of Securities and Insurance that, according to article 90 of Law

No. 18,045 about Securities Market, Compañía Eléctrica del Río Maipo S.A. will suspend the process of risk classiﬁ cation of its

titles, which is being done by its own will through Fitch Chile Clasiﬁ cadora de Riesgo Ltda. and Feller & Rate Clasiﬁ cadora.

Endesa S.A. and Subsidiaries

During the period January-December 2001, and according to the General Rule No. 30, the partnership proceeded to inform the

Superintendence of Securities and Insurance about the following essential or relevant facts.

Endesa

Sale of Participation

As of April 17, 2001, it is informed as an essential fact that, in an extraordinary meeting of the Board of the Company held

in this date, it was agreed to alienate to Sociedad Obrascon Huarte Lain S.A. the stock participation of Empresa Nacional

de Electricidad S.A. (ENDESA) in Sociedad Infraestructura Dos Mil S.A., which corresponds to 60% of its capital stock, and

in Sociedad Concesionaria Autopista del Sol S.A., a partnership in which ENDESA owns 0,10% of the total equity, while the

remaining percentage is owned by Sociedad Infraestructura Dos Mil S.A.

The price of the hereinbefore mentioned alienation is 2,253,000 U.F. (two million, two hundred ﬁ fty three thousand Unidades

de Fomento), exchangeable into American dollars at the time of the execution of the contract of promise of purchase of the

referred stock participation.

The alienation process of the partnership Infraestructura Dos Mil S.A. shares to the partnership Obrascon Huarte Lain S.A., whose

contract should have been executed before December 31, 2001, has extended the subscription to March 31, 2002.

Emgesa S.A. Trial

As of September 7, 2001, it is informed as an essential fact that EMGESA E.S.P., Colombian subsidiary of Empresa Nacional

de Electricidad S.A., in which it owns 22.41% of its stock capital, was notiﬁ ed of a environmental claim, also presented against

the Corporación Autónoma Regional de Cundinamarca (Colombia) and the Empresa de Energía de Bogotá S.A. E.S.P., a

company owned by the Bogotá Municipality that owns 51,5% of Emgesa S.A. E.S.P. The plaintiffs are the residents of the

Sibaté-Cundinamarca Municipality, who are suing in representation of the total residents of such Municipality through a group

action.

The claim was presented to the Administrative Court of Cundinamarca, and aims, according to its text, to obtain the declaration

of liability of the defendants, and the complete repair of all material and moral damages that the plaintiffs may have suffered

regarding the negative affectation and consecutive environmental damage that the defendants might have caused and shall cause

to the Sibaté-Cundinamarca Municipality, as they would have permitted, bombed and shall continue bombing the contaminated

waters of the Bogotá river in the Embalse del Muña reservoir, in order to use it in the generation of electric energy.

The totality of the demanded rendering reach approximately US$1,500,000,000, according to the plaintiffs themselves, for

supposed material and moral damages.

The supposed actions performed by the defendants, in what concerns to Emgesa S.A., E.S.P., in its condition of current owner

and operator of the electric energy chains Guaca-Paraíso y Canoas, Salto I, Salto II y Laguneta, and Empresa de Energía de

Bogotá S.A. E.S.P., in its condition of former owner and operator of the Embalse del Muña reservoir, would consist and would

have consisted, respectively, in the plaintiffs’ opinion, to gather the contaminated waters of Bogotá river in the Embalse del Muña

in order to make use of them in the generation of electric energy. The Corporación Autónoma Regional de Cundinamarca, a

corporate public entity in charge of managing the environment and natural resources within the jurisdiction of Cundinamarca,

is sued for its supposed and permanent omission by allowing the pumping of the contaminated waters of the Bogotá river to

the Embalse del Muña, in the plaintiffs’ opinion as well.

Currently, the local lawyers of Emgesa S.A. E.S.P. in Colombia are analyzing the claim and corresponding defense strategy.

Notwithstanding, we might immediately say that the economic activity performed by our subsidiary Emgesa S.A. E.S.P. is framed

within the most strict attachment to the body of laws in force, that has been awarded all permissions and authorizations from the

competent entities, including those with environmental competence, and that the eventual ecological damage is not imputable,

absolutely, to such company’s behavior, as the water that is utilized in the generation of electric energy is not contaminated

by such company and it cannot be considered as a polluting agent.

Additionally, it must be said that the claim aims to obtain the payment of compensations for supposed damages originated

since many decades in the area, although Emgesa S.A. E.S.P. only generates energy in this reservoir since the end of 1997,

date of its constitution.

Therefore, Emgesa S.A. E.S.P. and my represented are absolutely convinced that the Colombian Justice will ﬁ nally reject this

bold claim.

It is the excessive and unusual amount of the informed complaint and not its content or degree of juridical viability what

has moved the Board of Directors of Empresa Nacional de Electricidad S.A. to communicate it as a relevant fact to such

Superintendence.

Re-purchase of Bonds

As of November 6, 2001, it is informed as an essential fact that the Sociedad Endesa Chile Internacional partnership, 100%

subsidiary of Endesa, domiciled in Cayman Islands, has announced in the United States of America a public offer or Tender

offer to purchase in cash the issuing of bonds in dollars performed by Endesa (Cayman Islands Agency) on Feb. 1, 1997, whose

expiration date is on 2027, as well as for the purchase in cash of the issuing of bonds in dollars performed by Endesa on Feb.

1, 1997, whose expiration date is on 2097 (the “Offer”).

1
1

8
8

2
2

/
/

The ﬁ rst of these two bond issues was originally for a total amount of US$230,000,000 (two hundred thirty million American

dollars, hereinafter “US$”) to thirty years, that is, expiring on 2027, at a cover annual rate of 7.875%. The second of these two

bond issues was originally for a total amount of US$200,000,000 (two hundred million of US$) to one hundred years, that is,

expiring on 2097, at a cover annual rate of 8.125%. Both issues (hereinafter “the Bonds”), were registered in the Securities and

Exchange Commission (“SEC”) of the United States of America.

The Endesa Chile Internacional Offer is over the total amount of the Bonds that are circulating in the market and that reach the

total amount of the originally issued, that is, US$430,000,000. The terms and conditions of the Endesa Internacional offer are

recorded in the Offer to Purchase document dated November 6, 2001. The Offer dealer agent is Chase Manhattan International

Limited (“JPMorgan”).

The exact price to be paid by Endesa Chile Internacional for each US$1,000 of Bond capital will be determined by a formula

which is explained in the Offer to Purchase and that will basically consist in calculating a margin or Spread over the yield

to maturity of the United States Treasure Bond with a coupon rate of 5.375%, expiring on February 15, 2031. Endesa Chile

Internacional has offered, as well, to pay all Bondholders that accept the Offer an amount equivalent to the interest accrued

and not paid by the Bonds, excluding the payment date for this calculation.

The Offer period has started with this date and will expire at 17:00, New York time, of November 16, 2001, unless Endesa Chile

Internacional decides to extend it or cancel it in advance (the “Termination Date”). The payment of Bonds to those holders

that shall have accepted the offer will happen at the third labored day of transactions in the New York Stock Exchange since

the acceptance from a holder. Once a holder has accepted the Offer, this operation is irrevocable. The remaining conditions

of the Offer shall be contained in the Offer to Purchase.

The result of the Offer will be communicated to the market after the Termination Date (including any extension of it).

On the other hand, it is worth mentioning that the immediate ﬁ nancing needed to carry on the described operation is duly

negotiated in the in the international credit markets.

Finally, and according to the provisions of the communication No. 988 of the Superintendence of Securities and Insurance,

the ﬁ nal effects of the operation described in the results of Endesa cannot be reasonably quantiﬁ ed at this time. These effects

may only be determined once the deﬁ nitive result of the Offer is known.

Extension of Bond re-purchase period

As of November 19, 2001, it is informed as an essential fact as follows:

As was informed to the Superintendence of Securities and Insurance on November 6, 2001, the partnership Endesa Chile

Internacional, 100% subsidiary of Endesa, announced in the United States of America a public offer or Tender offer to purchase

in cash the issuing of bonds in dollars performed by Endesa’s Agency abroad on February 1, 1997, whose expiration date is

on 2027, as well as for the purchase in cash the issuing of bonds in dollars performed by Endesa on February 1, 1997, whose

expiration date is on 2097 (the “Offer”).

As of today, Endesa Chile Internacional informed the extension of the Offer termination date to the market. The Offer shall

now expire at 17:00, New York time, of Wednesday, November 21, 2001, but all the remaining terms and conditions of the

Offer shall remain unaltered.

Finally, and according to the provisions of the communication No. 988 of the Superintendence of Securities and Insurance,

the ﬁ nal effects of the operation described in the results of Endesa cannot be reasonably quantiﬁ ed at this time. These effects

may only be determined once the deﬁ nitive result of the Offer is known.

End of Bond re-purchase period

As of November 22, 2001, it is informed as a relevant fact as follows:

As was informed to the Superintendence of Securities and Insurance on November 19, 2001, the partnership Endesa Chile

Internacional, 100% subsidiary of Empresa Nacional de Electricidad S.A. (“Endesa”) extended the termination date of the public

offer (the “Offer”) for the total or partial purchase in cash of the following issues of bonds in dollars: (i) Endesa Bonds expiring

on 2027, and (ii) Endesa Bonds expiring on 2097.

The Offer expired on Wednesday, November 21, 2001. The nominal value of bonds purchased with expiration in 2027 was

US$23,719,000 and the nominal value of the bonds purchased with expiration in 2097 was US$160,264,000. These consolidated

operations show a non-operational proﬁ t (tax-free) for Endesa of approximately US$27 million, amount that will be accounted

for in this trimester.

Datibex

As of December 17, 2001, it is informed as an essential fact that the entering of Empresa Nacional de Electricidad S.A. stock

to the so-called Mercado de Valores Latinoamericano de la Bolsa de Valores de Madrid (Latin American Securities Market of

the Madrid Stock Exchange, Latibex) has been formalized, and the ﬁ rst transactions of the titles in the European market have

already been done.

Autopista Los Libertadores S.A.

As of October 26, 2001, it is informed as an essential fact that as of October 24, 2001, Sociedad Concesionaria Autopista Los

Libertadores S.A has proceeded to formalize a bond issuing agreement for an amount of UF 4,000,000, aiming to obtain

long-term reﬁ nancing.

Autopista del Sol S.A.

As of October 17, 2001, it is informed as an essential fact that Sociedad Concesionaria Autopista del Sol S.A. has proceeded to

formalize a bond issuing agreement for an amount of UF 5,065,000, in order to obtain long-term reﬁ nancing.

1
1

8
8

4
4

/
/

Consolidated Management Analysis

Financial statements for the year ended December 31, 2000 and 2001

Economic-ﬁ nancial summary

As at December 31, 2001, the Company achieved a Net Proﬁ t of $ 40,926 million compared to the proﬁ t of $ 92,875 million

as at December 2000.

With respect to the decrease in proﬁ t in the period December to December, it is important to consider that the signiﬁ cant proﬁ t

achieved in 2000 was due mainly to an extraordinary income of some $ 150,500 million produced by the sale of the Company’s

investments in Aguas Cordillera, Aguas Puerto and Transelec. Such divestments were not repeated during the year 2001.

An essential element in the positive result in 2001 was the signiﬁ cant growth in operating income that grew by 36% or $ 195,917

million. The subsidiaries that contributed most to this improvement in operating income were Endesa, Cerj and Edesur.

This improved operating income comprises mainly $ 111,194 million from the distribution business (57%) and $ 76,360 million

from the generating business (39%).

This positive achievement is particularly remarkable considering it was attained in the midst of a fairly depressed regional

economic scenario throughout the year 2001 that was made signiﬁ cantly worse by the events that took place in Argentina

from November 2001 on.

Furthermore, another positive aspect achieved during 2001 was the greater balance reached between the generation and

the distribution businesses in most of the countries where we operate. This has contributed to a greater stability in aggregate

cash ﬂ ows.

Finally, in the area of ﬁ nancial operations, we must highlight the repurchase of Yankee Bonds carried out by Enersis and its

subsidiary, Endesa Chile that produced a ﬁ nal proﬁ t of $ 23.411 million after taxes.

With regard to the evolution of the Minority Interests, this decreased by $ 57.133 million, essentially as a result of the lower proﬁ ts

from afﬁ liated companies and, to a lesser degree, of the increase in the shareholding in Chilectra and Río Maipo, investments

made by the Company during the past two years.

Performance of distribution business

In this segment, we highlight the increase in physical sales achieved by Chilectra and Río Maipo (Santiago), Edesur (Buenos

Aires) and Edelnor (Lima) which, unfortunately, were not able to compensate the decrease in sales registered by Codensa

(Bogotá), Cerj (Río de Janeiro) and Coelce (Ceará). In the case of the last two, the fall was due to the rationing of power due

to the drought in Brazil during 2001, and implied , for the whole group, a 1.2% reduction in aggregated physical sales or 593

GWh.

In this same line of business, there was also a sustained improvement in the productivity ratio during 2001 in all subsidiaries in the

ﬁ ve countries where they operate. The average productivity rose from 1,223 clients per employee to 1,379 clients per employee,

an improvement of 13%. This was the result of the addition of 317,000 new clients as well as a reduced staff complement

related to a more efﬁ cient distribution of human resources within the Group that led to a signiﬁ cant reduction in cost of salaries

that will continue to be reﬂ ected in future periods.

Performance of generating business

The Operating Income of this business segment rose by 30%, due principally to the improved results in Chile, Peru and Colombia

while they declined in Brazil and Argentina.

In Chile, the improvement in operating income was the result of an increase of 34.9% in average tariffs and an increase of

13.2% in the generation of hydroelectricity. In Peru, the increase was due mainly to a 17.6% rise in physical sales, reﬂ ecting

the greater generating capacity, and to the increase, in October 2000, of 191 MW of new additional capacity. In Colombia,

operating income rose as a result of a 9.2% increase in physical sales and a 16.4% rise in average tariffs. In Brazil, the fall in

operating income is due to a lower level of generation of hydroelectricity which implied a greater need to purchase power.

Finally, in Argentina the fall is explained by the drop in physical sales at Central Costanera and to lower spot prices that could

not be entirely compensated by the increase in generation of hydroelectricity at El Chocón as a result of a greater availability

of water.

Details of the variations described above can be found in the following pages, in the Analysis of the Financial Statements,

which includes comments on the principal accounts in the Income Statement, Financial Statements and Principal Cash Flows,

compared with the information corresponding to December 31, 2000.

As of December 17, 2001, the shares of both Enersis and Endesa Chile, are being traded in the Latin American Stock Market,

Latibex, listed under the Madrid Stock Market within the framework of globalization of the principal companies in the region.

Markets in which the company operates

Enersis’ commercial activities are handled through subsidiaries that operate the various businesses in the countries where the

company has a presence. For Enersis, the most important activities are the Distribution and Generation of electricity.

The following tables illustrate the evolution of the key ratios in the different countries

Distribution Business

Company

Chilectra
Río Maipo
Edesur
Edelnor
Cerj
Coelce
Codensa

Energy sales
(GWh) ( * )
Dec-00 Dec-01

Energy losses
(%)

Clients
(th)

Clients per employee
(th)

Dec-00

Dec-01

Dec-00

Dec-01

Dec-00

Dec-01

9,089
1,186
12,597
3,583
7,656
5,894
8,776

9,585
1,245
12,909
3,685
6,739
5,352
8,673

5.2%
5.4%
10.3%
9.9%
19.7%
13.3%
10.5%

5.4%
6.4%
9.9%
8.9%
22.7%
13.0%
11.8%

1,262
287
2,108
852
1,581
1,796
1,802

1,289
294
2,097
867
1,691
1,917
1,850

1,455
3,121
886
1,379
1,128
1,128
1,860

1,785
3,764
925
1,557
1,249
1,309
2,276

Total

48,781

48,188

11.5%

11.9%

9,688

10,005

1,223

1,379

(*) It includes sales to ﬁ nal clients, tools, and intercompany sales

1
1

8
8

6
6

/
/

Generating Business

Country

Chile
Argentina
Perú
Colombia
Brasil

Total

Market
of
operations

SIC y SING
SIN
SICN
SIN
SICN

Energy sales
(GWh)

Market
share

Dec-00

Dec-01

Dec-00

Dec-01

20,086
15,549
3,604
13,356
3,887

18,673
12,988
4,239
14,591
3,743

56,482

54,234

55.4%
21.6%
20.9%
19.7%
1.1%

49.0%
13.5%
23.0%
23.3%
1.2%

I.- ANALYSIS OF THE FINANCIAL STATEMENTS

1. -Analysis of the Income Statements

The proﬁ t obtained as at December 31, 2001 amounted to $ 40,926 million that is 56% or $ 51,949 million lower than the proﬁ t

of $ 92,875 million at the same date in the previous year.

It is important to point out that despite the lower proﬁ t, operating income during the period rose by 36% and the fall in proﬁ t is

mainly the result of proﬁ ts obtained on the sale of assets in 2000, speciﬁ cally of the investments in Aguas Cordillera S.A., Aguas

Puerto S.A. and Transelec S.A., which produced extraordinary revenues of approximately $ 150,500 million.

The following table illustrates the comparisons and variations of each item in the Income Statement:

Income Statement (million Ch$)

Dec-00

Dec-01

Dec 01-00

%Var 01-00

Operating Revenues
Operating Costs
Operating Margin
Selling and Administrative Expenses
Operating Income

Proﬁ t(Loss) in Related Companies
Inet Other Non Operating Income
Net Financial Margin
Positive Goodwill Amortization
Monetary Corrección
Exchange Difference
Non Operating Income

Income tax
Iminority interest
Negative Goodwill Amortization
Net Income

2,676,745
(1,839,840)
836,905
(300,255)
536,650

2,970,272
(1,966,322)
1,003,950
(271,383)
732,567

74
334,574
(413,477)
(69,625)
(14,808)
(1,215)
(164,477)

(142,062)
(178,641)
41,405
92,875

(10,387)
13,875
(381,144)
(77,988)
2,112
(29,964)
(483,496)

(132,706)
(121,508)
46,069
40,926

293,527
(126,482)
167,045
28,872
195,917

(10,461)
(320,699)
32,333
(8,363)
16,920
(28,749)
(319,019)

9,356
57,133
4,664
(51,949)

R.A.I.I.D.A.I.E. (*)
Earnings per share $

1,014,739
11.20

1,171,563
4.94

156,824
(6.27)

(*) Earnings before taxes, interests, depreciation, amortization and extraordinary items.

11.0%
(6.9%)
20.0%
9.6%
36.5%

(14136,5%)
(95.9%)
7.8%
(12.0%)
114.3%)
2366,2%
(194.0%)

6.6%
32.0%
11.3%
(55.9%)

15.5%
(55.9%)

a.- Operating Income

Operating Income as at December 31, 2001 amounted to $ 732,567 million, an increase of 36% or $ 195,917 million with

respect to the same period of 2000. The increase in operating income came mainly from the subsidiaries Endesa, Cerj and

Edesur.

In the Generating Business, the consolidated operating income of Endesa Chile rose by 30.4% during the period, amounting to

$ 337,840 million. This growth in operating income can be explained basically by the improved performance of the operations

in Chile, Peru and Colombia though partly affected by the reduction in the operating income from Argentina and Brazil.

In Chile, operating income increased by 102% or $ 132,627 million due principally to the rise by 34.9% in average sales prices

and to the increase by 13.2% in the generation of hydroelectricity as a result to the improvement in the supply of water in the

country. This implied a reduction of $ 18,569 million in the cost of purchasing power and fuel.

In Peru, the increase by 21.2% in operating income is mainly due to the rise in physical sales of power, reﬂ ecting the greater

generating capacity the Company had during this year as a result of adequate levels of water in the reservoirs and of the increase

of 191 MW in the level of capacity to produce hydroelectricity. The last of these units went into operation in October 2000.

In Colombia, operating income rose by 14% to $ 72,211 million as a result of the increase in average sales prices due to the

restrictions on the transmission of electricity in Colombia at the beginning of 2001 and to the growth by 9.2% in sales of

physical power.

In Brazil, the operating income of Endesa Chile Cachoeira Dourada decreased by 10.6% to $ 27,106 million as a result of a fall

in hydroelectric generation during the year which led to a greater need to purchase power.

The generating subsidiaries in Argentina suffered a fall of 11.1% in operating income that amounted to $ 41,787 million. This

reduction is mainly the result of lower physical sales at Central Costanera due to the end of the contracts with the distribution

companies in Buenos Aires and to lower spot prices during the year 2001. This was partly compensated by the increase of

173.4% registered by El Chocón and explained by a greater generation of hydroelectricity during the period as a result of larger

ﬂ ows and the higher water levels in the reservoirs in the region.

The Distribution Business has shown a signiﬁ cant increase in operating income from practically all its subsidiaries, especially Cerj

and Edesur whose operating income rose by $ 56,876 million and $ 26,236 million, respectively. Cerj’s increase was principally

due to a greater volume of sales of power and to lower remunerations expenses following staff cuts at the plant. At Edesur,

an Argentine subsidiary, the increase in operating income was due mainly to greater physical sales of power, a reduction in

power losses and lower remuneration costs following staff cuts.

Consolidated physical sales amounted to 48,188 GWh during the period ending on December 31, 2001. This implied a small

reduction of 1% with respect to the same period of 2000 that had sales of 48,781 GWh due mainly to the rationing imposed

by the Brazilian authorities.

1
1

8
8

/
/

The operating income of the subsidiaries of the Enersis Group for the periods ending on December 31, 2001 and 2000

are shown in the following table:

Operating income variation by subsidiary

Company

(thousand Ch$)
Dec-01

Dec-00

Var 01-00

%Var 01-00

Chilectra S.A.
Río Maipo S.A.
Edesur S.A.
Edelnor S.A.
Cerj
Coelce
Codensa S.A.
Endesa S.A.
Compañia Americana de Multiservicios Uno Ltda.
Inmobiliaria Manso de Velasco Ltda.
Compañia Americana de Multiservicios Ltda.
Synapsis soluciones y servicios IT Ltda.

74,020
10,502
88,180
28,932
11,097
29,974
20,446
259,154
6,268
8,252
2,658
5,107

79,289
10,029
114,416
33,632
67,973
42,438
27,762
337,840
6,926
2,912
5,112
7,170

5,269
(473)
26,236
4,700
56,876
12,464
7,316
78,686
658
(5,340)
2,454
2,063

7.1%
(4.5%)
29.8%
16.2%
512.6%
41.6%
35.8%
30.4%
10.5%
(64.7%)
92.3%
40.4%

Operating Income by Line of Business

The table below illustrates the operating income and expenses for the periods ending on December 31, 2001 and 2000, broken

down by line of business:

Operating income by business December 2001 and 2000 (Million Ch$)

Company

Generation

Distribution

Dec-00

Dec-01

Dec-00

Dec-01

Dec-00

Eng. services &
Real Estate

Parent Co &
Other services

Adjustments
Dec-01 Dec-00 Dec-01 Dec-00 Dec-01

Total

Dec-00

Dec-01

Operating Revenues
Operating Costs
Operating Margin
Selling & Adm, Expenses

1,944,085
879,072 978,692
(595,709) (617,995) (1,424,868)
519,217
283,363 360,697
(255,168)
(31,594)
(30,620)

2,106,635 109,049
(81,306)
(1,503,579)
27,743
603,056
(6,811)
(227,813)

97,679
(71,074)
26,605
(8,030)

59,437
(39,257)
20,180
(28,731)

89,926 (314,898) (302,659) 2,676,745 2,970,273
(64,700) 301,300 291,026 (1,839,840) (1,966,322)
836,905 1,003,951
(11,633)
25,226
(271,384)
(300,255)
25,692
(29,639)

(13,598)
21,075

Operating Income

252,743 329,103

264,049

375,243

20,932

18,575

(8,551)

(4,413)

7,477

14,059

536,650

732,567

b.- Non-Operating Income

The non-operating result was a loss of $ 483,496 million, which represents an increase of 194% or $ 319,019 million in comparison

to the loss as at December 2000.

The net ﬁ nancial margin was a loss of $ 381,144 million that, when compared to the same period of the previous year, reﬂ ects

a decrease in costs by 8% as a result of lower interest rates on the international markets with respect to the year before that

led to a reduction of $ 32,333 million in ﬁ nancial costs.

Investments in related companies. As at December 2001, these amounted to a net loss of $ 10,387 million in comparison with

a proﬁ t of $ 74 million for the same period of the previous year. This negative variation of $ 10,461 million is caused mainly by

the effects of the exchange rates in the results of the related companies of Endesa Chile.

Amortization on lower value of investments. As at December 31, 2001, this reﬂ ects an increase in costs of $ 8,363 million and

amounted to $ 77,988 million. The increased amortization is the consequence of the Lower Value produced by the purchase

of shares in Chilectra and Río Maipo.

Non-operating income and expenses as at December 31, 2001 amounted to a net proﬁ t of $ 13,875 million, reﬂ ecting a fall

of $ 320,699 million with respect to the year before when the proﬁ t reached $ 334,574 million. The principal reasons for this

fall in the results are detailed below:

•

A reduction of $ 198,975 in comparison with the proﬁ ts registered in 2000 following the divestments in Aguas

Cordillera S.A., Aguas Puesto S.A. and Transelec and a reduction of $ 74,144 million in the proﬁ t on the sale of ﬁ xed

assets.

•

A reduction of $ 15,783 million as at December 31, 2001 in comparison with last year due to the conversion over to

Chilean Accounting Rules (Technical Bulletin Nº 64) mainly of the subsidiaries in Brazil and Argentina. This was principally

due to the devaluation of the Brazilian Real and the Argentine Peso with respect to the US Dollar.

•

A reduction of $ 9,944 million in the compensation from exchange insurance that fell from a proﬁ t of $ 4,359 million

in December 2000 to a loss of $ 5,585 million in the current year

•

Increase of $ 24,492 million in provisions for contingencies and lawsuits.

Increase of $ 15,730 million in staff beneﬁ ts related mainly to the obligatory pension plan introduced during the period

by the Brazilian authorities.

•

This is partly compensated by the proﬁ t of $ 23,410 million on the repurchase of Bonds.

Price-level restatement and exchange differences. These show a rise of $ 16,053 million in the loss with respect to the same

period of the previous year, going from a loss of $ 16,023 million as at December 31, 2000 to a loss of $ 27,852 million in this

exercise. This is mainly due to the effects of the devaluation of the Peso with respect to the US Dollar during the current period.

This was compensated to a great extent by the exchange insuance explained above.

Interest rate risks

On a consolidated basis, as at December 31, 2000, 54% of the total debt was expressed in variable terms (principally Libor

USD and Chilean TAB), whilst 46% was at ﬁ xed rates and secure.

As at December 31, 2001, the debt at variable rates represented 43% of the total debt, whilst 57% was at ﬁ xed rates and

secure.

The reduction in the percentage of debt at a variable rate during this year is explained basically by the reﬁ nancing of the

obligations at ﬁ xed rates and by closing operations to hedge the Libor USD rate for a value of USD 650 million of which USD

425 million were done by Enersis and USD 225 million by Endesa Chile.

1
1

9
9

0
0

/
/

The Company manages its interest rate risk by concentrating its debt structure on the long term with a suitable combination

of debts at ﬁ xed and variable interest rates.

Foreign currency risk

The Company’s exposure to an exchange risk is brought about by the assets and liabilities denominated in foreign currency,

mainly in US Dollars.

On a consolidated basis, as at December 31, 2000, Enersis had 68% of its total debt expressed in US Dollars. Bearing in mind

the Dollar/UF forward position, the weight of this debt in US Dollars was reduced to 58%.

As at December 31, 2001, 72% of the debt was expressed in US Dollars. When considering the US Dollar/UF forward policy

mentioned below, the percentage of the debt expressed in US Dollars is reduced to 65%.

The reason behind the largest part of our debt being denominated in US Dollars is the fact that an important proportion of

our revenues is directly or indirectly related to the Dollar. Thus, the tariffs in the majority of the countries in which we have

operations are tied to a large extent to the evolution of the US Dollar, particularly in Argentina, Chile and Peru. In countries

where the indexation of the US Dollar is less, the companies take a greater proportion of their loans in local currency.

As we have mentioned before, despite the hedging, we are exposed to the ﬂ uctuations in the Peso/US Dollar rates of exchange.

These are managed through the use of ﬁ nancial derivative instruments, basically US Dollar/UF forward contracts, with which

the exchange risk is hedged.

The exchange risk exposure is currently handled on a consolidated basis, taking into consideration the portion of this risk that

our Chilean subsidiaries have not covered. The Company’s policy is to hedge between 60% and 70% of the booked exposure

to exchange risks.

On a consolidated basis, as at December 31, 2001, the Company had US Dollar/UF forward contracts for USD 506 million whilst

as at December 31, 2000, the total was USD 902 million. The reduction is due to a decrease in the exposure to the variations

in the Dollar exchange rate on our books.

Although the actual exchange risk to which we are exposed depends on the ﬂ uctuation of the exchange rates at which the

Company’s assets and liabilities are maintained, for accounting purposes, our results are also affected bearing in mind the

contents of Technical Bulletin Nº 64. In accordance with this Chilean accounting regulation, debts in foreign currency that were

utilized to ﬁ nance investments in countries with an “unstable currency” are matched to their corresponding investment and the

variations in the US Dollar/Chilean Peso rate on those matched debts are not reﬂ ected by entries in the Income Statement.

2. - Analysis of the ﬁ nancial statements

The Company’s total assets reﬂ ect an increase of $ 975,189 million with respect to the same period of the previous year. This

is principally due to:

Assets (million Ch$)

Dec-00

Dec-01

Dec 01-00

%Var 01-00

Current Assets
Fixed Assets
Other Assets

Total Assets

996,649
8,684,284
1,732,032

1,128,589
9,344,708
1,914,857

131,940
660,424
182,825

11,412,965

12,388,154

975,189

13.2%
7.6%
10.6%

8.5%

•

The increase in Fixed Assets as a result of applying the methodology of carrying the non-monetary assets in unstable

countries in historic Dollars, as required by Technical Bulletin Nº 64.

•

Current Assets include Term Deposits for $ 95,549 million and Sales Debtors for $ 59,335 million, compensated by a

reduction of $ 10,648 million in forward contracts.

•

The rise in Other Assets can be explained by the increase of $ 86,795 million in deferred expenses.

Liabilities (million Ch$)

Dec-00

Dec-01

Dec 01- 00

%Var 01- 00

Short Term Liabilities
Long Term Liabilities
Minority interest
Equity

1,583,569
5,072,614
3,622,063
1,134,719

1,525,544
5,728,501
3,954,923
1,179,186

(58,025)
655,887
332,860
44,467

(3.7)%

12.9%
9.2%
3.9%

Total Liabilities

11,412,965

12,388,154

975,189

8.5%

Total debt increased by 9% or $ 597,862 million due mainly to the higher exchange rate applied to obligations with banks

and ﬁ nancial institutions and bonds.

Minority interests rose by $ 332,860 million as a result of the increase in the equity of the overseas subsidiaries in line with the

methodology of carrying non-monetary liabilities (equity) on the books in historic US Dollars. This was partially offset by the

purchase of shares in the minority interests, Chilectra and Río Maipo.

With regard to equity, we should point out that this increased by $ 44,467 million with respect to December 2000. This variation

is explained by the increase of $ 19,245 million in Other Reserves, the decrease of $ 15,704 million in Retained Earnings and

the booking of the proﬁ t for the period of $ 40,926 million.

1
1

9
9

2
2

/
/

Below we illustrate the evolution of the principal ﬁ nancial ratios:

Indicator

Unit

Dec-00

Dec-01 Var Dec 01- 00 %Var 01-00

Liquidity

Indebtedness

Proﬁ tability

Current liquidity
Acid Ratio (1)
Working Capital
Leverage
% Short term debt
% Long term debt
Interest Coverage (2)
ROE
ROA

(1) Current assets net of expenses
(2) RAIIDAIE divided by interest expenses

times
times
MM$
times
%
%
times
%
%

0.63
0.62
(586,920)
1.40
0.24
0.76
2.09
8.18%
0.8%

0.71
0.70
(462,968)
1.41
0,22
0,78
2.69
3.47%
0.3%

0.8
0.8
123,952
0.01
(0.02)
0.02
0.60
-4.7%
-0.5%

12.7%
12.9%
21.1%
0.7%
(7.8%)
2.4%
28.7%
(57.6%)
(59.5%)

The liquidity ratio as at December 2001 was 0.71 that reﬂ ects an improvement of 0.8 points with respect to the same date of

the previous year.

The debt ratio as at December 31, 2001 was 1.41 times, which reﬂ ects an improvement of 0.01 points when compared to the

same period of the year 2000.

Furthermore, return on equity was 3.47%. As at the same date in the previous year, this was 8.18%.

3.- Principal cash ﬂ ows

During the period, the Company generated positive net ﬂ ows worth $ 95,017 million composed of the following:

Effective Cash Flow (million Ch$)

Dec-00

Dec-01

Dec 01- 00

%Var 01-00

Operating Cash Flow
Financing Cash Flow
Cash Flow on Investments
Net Cash Flow

523,001
(790,572)
171,472
(96,100)

643,612
(59,625)
(488,970)
95,017

120,611
730,947
(660,442)
191,117

23.1%
(92.5%)
(385.2%)
(198.9%)

Operating activities generated a net positive ﬂ ow of $ 643,612 million, 23% more than that produced in the same period of the

previous year. This ﬂ ow comprises mainly the proﬁ t for the period of $ 40,926 million plus the net charges to income that do

not represent cash ﬂ ow for $ 544,262 million. Added to these is a reduction in assets that affect the operating ﬂ ow for $ 141,361

million, compensated in part by the reduction in liabilities that affect the operating ﬂ ows by $ 204,444 million.

Financing activities produced a negative ﬂ ow of $ 59,625 million due mainly to: the payment of loans for a value of $ 1,815,595

million, the payment of dividends for a total of $ 140,260 million, the payment of Bonds for $ 154,631 million and Other

Payments for $ 32,356 million. These are partially compensated by the loans received and the Bond issue for $ 1,880,485 and

$ 272,209 million, respectively.

Investment activities generated a net negative ﬂ ow of $ 488,970 million, due fundamentally to the net incorporation of ﬁ xed

assets worth $ 331,605 million, other investments made for $ 182,418 million and investments in subsidiaries for $ 12,505

million. These were partly compensated by the sale of ﬁ xed assets and other income for $ 37,785 million.

II. BOOK VALUE AND MARKET VALUE OF THE ASSETS

With regard to the more important assets, we mention the following:

The value of the items in ﬁ xed assets have been adjusted in accordance with the accounting criteria established by the Chilean

Superintendency of Securities and Insurance in its Circulars Nº 550 and 556 issued in 1985. In the case of the foreign company,

Inversiones Distrilima S.A., the value of the ﬁ xed assets were adjusted in accordance with the exception criteria indicated in

Technical Bulletin Nº 45 issued by the Chilean College of Accountants, the norm in force at the time the investment was made

and which was not modiﬁ ed by Technical Bulletin Nº 51 that replaced it.

Depreciation is calculated on the updated value of the goods in accordance with the years of useful life remaining for each

item.

Investments in related companies are valued at their proportional equity value. In the case of foreign companies, as from the

second quarter of 1998, this methodology has been applied on the basis of the ﬁ nancial statements prepared in accordance

with the norms established in Technical Bulletin Nº 64 of the Chilean College of Accountants.

Intangible values have been adjusted by price-level restatement and are amortized according to the norms indicated in Technical

Bulletin Nº 55 of the Chilean College of Accountants.

The assets expressed in foreign currency are shown at the exchange rate reigning as at the date of closure of the period.

Investments in ﬁ nancial instruments with repurchase/resale agreements are shown at their purchase value plus the proportion

of the interest calculated on the implicit rate of each operation.

Accounts and bills receivable from related companies are classiﬁ ed according to their short and long-term maturities. The

operations are adjusted to equal conditions similar to those that are normally applied in the market.

In summary, assets are valued according to generally accepted accounting principles and norms and to instructions given on

this matter by the Superintendency of Securities and Insurance explained in Note 2 of the Financial Statements.

1
1

9
9

4
4

/
/

1
1

9
9

6
6

/
/

Audited Unconsolidated Financial Statements

For the years then ended December 31, 2000 and 2001

INDEX TO THE AUDITED UNCONSOLIDATED FINANCIAL STATEMENTS

Accounts Inspector’s Report

Report of Independent Accountants

Unconsolidated Balance Sheets as of December 31, 2000 and 2001

Unconsolidated Statements of Income for the years ended December 31, 2000 and 2001

198

199

200

202

Unconsolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 2000 and 2001

203

Unconsolidated Statements of Cash Flows for the years ended December 31, 2000 and 2001

Notes to the Unconsolidated Financial Statements

Enersis S.A. Relevant Facts

Parent Company Management Analysis

204

205

232

235

Application of Constant Chilean Pesos

The consolidated ﬁ nancial statements included herein have been restated for general price-level changes and expressed

in constant Chilean pesos of December 31, 2001 purchasing power.

Accounts Inspector’s Report

Marcela Araya
Accounts Inspector

Marco Acevedo
Accounts Inspector

Santiago, February 26, 2002

Report of Independent Accountants

(Translation of a report originally issued in Spanish – See Note 2 to the ﬁ nancial statements)

To the Shareholders of Enersis S.A.:

We have audited the accompanying balance sheets of Enersis S.A. (the “Company”) as of December 31, 2000 and 2001, and the
related statements of income, changes in shareholders’ equity and cash ﬂ ows for the years then ended. These ﬁ nancial statements
are the responsibility of the Company’s management. Our responsibility is to express an opinion on these ﬁ nancial statements
based on our audits. We did not audit the ﬁ nancial statements of the subsidiary Endesa – Chile S.A., whose total assets and revenues
constitute 30 percent and 18 percent, in 2000, and 30 percent and 23 percent in 2001, respectively, of the related consolidated
totals. Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates
to the amounts included for those entities, is based solely on the report of the other auditors.

We conducted our audits in accordance with generally accepted auditing standards in Chile. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the ﬁ nancial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the ﬁ nancial statements. An audit
also includes assessing the accounting principles used and signiﬁ cant estimates made by management, as well as evaluating the
overall ﬁ nancial statement presentation. We believe that our audits and the report of other auditors provide a reasonable basis
for our opinion.

The ﬁ nancial statements referred to above have been prepared to reﬂ ect the individual ﬁ nancial position of Enersis S.A. based on
the criteria described in Note 2(a), before proceeding to the line-by-line consolidation of the subsidiaries detailed in Note 8(a).
Therefore, for adequate interpretation, these ﬁ nancial statements should be read and analyzed in conjunction with the consolidated
ﬁ nancial statements of Enersis S.A. and its subsidiaries which are required by generally accepted accounting principles in Chile. This
report is presented only for the information and use of the Board of Directors, the Company’s management and the Superintendency
of Securities and Insurance.

In our opinion, based on our audits and the report of other auditors, the ﬁ nancial statements referred to above present fairly, in all
material respects, the ﬁ nancial position of Enersis S.A. as of December 31, 2000 and 2001, and the results of its operations and its
cash ﬂ ows for the years then ended in conformity with generally accepted accounting principles in Chile.

As described in Notes 8(e) and 25(a) to these ﬁ nancial statements, the Company has valued investments in Argentina in accordance
with Technical Bulletin No. 64 issued by the Chilean Association of Accountants. On a consolidated basis, these investments reﬂ ect
total assets of 14 percent, total revenues of 27 percent, and total operating income of 21 percent, of the related consolidated totals.
Due to the unstable political and economic situation in Argentina and considering the effects of the Public Emergency Law, the
Company’s subsidiaries and equity method investments are exposed to conditions which could affect the valuation of their assets,
liabilities and equity and generate uncertainty as to their ability to pay obligations and continue operations. These ﬁ nancial statements
have been prepared assuming that the Company’s Argentine subsidiaries and equity method investments will continue as a going
concern and do not reﬂ ect the effects or eventual adjustments that may result from the resolution of these uncertainties.

Cristián Bastián E.

ARTHUR ANDERSEN – LANGTON CLARKE

Santiago (Chile)
February 26, 2002

1
1

9
9

8
8

/
/

Audited Unconsolidated Balance Sheets

Translation of ﬁ nancial statements originally issued in Spanish – See Note 2
(Restated for general price-level changes and expressed in thousands of constant Chilean pesos as of December 31, 2001, and thousands of US dollars)

Assets

Current assets:
Cash
Time deposits
Marketable securities
Notes receivable
Miscellaneous receivables
Amounts due from related companies
Income taxes recoverable
Prepaid expenses
Deferred income taxes
Other current assets

As of December 31,

2000
ThCh$

2001
ThCh$

2001
ThUS$

36,260
-
64
760
15,195,856
25,775,928
7,938,830
15,379
16,081,228
121,151,728

538,698
3,242,367
-
737
9,371,937
76,396,897
11,643,727
22,859
2,805,857
110,123,424

823
4,952
-
1
14,313
116,674
17,782
35
4,285
168,181

Total current assets

186,196,033

214,146,503

327,046

Property, plant and equipment, net

13,677,861

13,292,794

20,301

Other assets:
Investments in related companies
Goodwill, net
Negative goodwill, net
Long–term receivables
Amounts due from related companies
Intangibles
Less: Accumulated amortization
Other assets

Total other assets

Total assets

2,379,652,948
853,587,693
(1,041,731)
-
469,783,759
1,382,224
(199,483)
3,163,918

2,352,356,825
821,037,312
(1,072,131)
475,381
644,499,929
1,382,224
(268,724)
14,023,809

3,592,536
1,253,894
(1,637)
726
984,285
2,111
(410)
21,417

3,706,329,328

3,832,434,625

5,852,922

3,906,203,222

4,059,873,922

6,200,269

The accompanying notes are an integral part of these ﬁ nancial statements

Liabilities and Shareholders’ Equity

Current liabilities:
Due to banks and ﬁ nancial institutions current portion
Current portion of bonds payable
Dividends payable
Accounts payable
Notes payable and other accounts payable
Amounts payable to related companies
Accrued expenses
Withholdings
Income taxes payable
Deferred income
Other current liabilities

2000
ThCh$

As of December 31,
2001
ThCh$

18,245,673
2,691,842
644,079
461,918
2,543,058
257,034,386
2,093,347
74,193
12,002,124
1,419,415
113,458,020

40,756,250
10,104,488
377,639
473,180
1,071,201
102,565,446
2,505,161
892,739
16,675
411,337
111,022,831

2001
ThUS$

62,243
15,432
577
723
1,636
156,639
3,826
1,363
25
628
169,555

Total current liabilities

410,668,055

270,196,947

412,647

Long-term liabilities:
Due to banks and ﬁ nancial institutions
Bonds payable
Amounts payable to related companies
Accrued expenses
Other long-term liabilities

599,914,301
473,146,520
1,284,370,354
1,572,412
1,812,743

963,418,719
619,365,472
1,021,991,372
1,767,386
3,947,637

1,471,340
945,899
1,560,793
2,699
6,029

Total long-term liabilities

2,360,816,330

2,610,490,586

3,986,760

Shareholders’ equity:
Paid-in capital
Additional paid-in capital – share premium
Other reserves
Retained earnings
Net income for the year

729,328,347
32,398,114
7,491,989
272,625,237
92,875,150

729,328,347
32,398,114
26,384,539
350,149,143
40,926,246

1,113,835
49,479
40,295
534,750
62,503

Total shareholders’ equity

1,134,718,837

1,179,186,389

1,800,862

Total liabilities and shareholders’ equity

3,906,203,222

4,059,873,922

6,200,269

The accompanying notes are an integral part of these ﬁ nancial statements

2
2

0
0

/
/

Audited Unconsolidated Statements of Income

Operating income:
Sales
Cost of sales
Gross proﬁ t
Administrative and selling expenses

Years ended December 31,
2001
ThCh$

2001
ThUS$

2000
ThCh$

4,159,886
(847,105)
3,312,781
(19,427,826)

4,175,558
(820,292)
3,355,266
(20,040,255)

6,377
(1,253)
5,124
(30,606)

Operating loss

(16,115,045)

(16,684,989)

(25,481)

Non-operating income and expenses:
Interest income
Equity participation in income of related companies
Other non-operating income
Equity participation in losses of related companies
Amortization of goodwill
Interest expense
Other non-operating expenses
Price-level restatement
Foreign currency translation

63,308,855
226,192,196
105,562,555
(12,281,800)
(43,189,598)
(200,226,544)
(10,307,906)
227,453
(24,517,588)

45,635,420
241,518,946
28,639,122
(9,839,356)
(49,000,967)
(156,981,932)
(15,808,213)
1,536,998
(36,216,375)

69,695
368,849
43,738
(15,027)
(74,835)
(239,744)
(24,142)
2,347
(55,310)

Non-operating income, net

104,767,623

49,483,643

75,571

Income before income taxes and amortization
of negative goodwill
Income tax beneﬁ t
Income before amortization of negative goodwill
Amortization of negative goodwill

88,652,578
4,207,703
92,860,281
14,869

32,798,654
8,064,316
40,862,970
63,276

50,090
12,316
62,406
97

Net income for the year

92,875,150

40,926,246

62,503

The accompanying notes are an integral part of these ﬁ nancial statements

Audited Unconsolidated Statements
of Changes in Shareholders’ Equity

Number of
shares
Thousands

Paid-in
capital
ThCh$

Additional
paid-in
capital
ThCh$

Other
reserves
ThCh$

Retained
earnings
ThCh$

Net income
(loss) for the
years
ThCh$

Total
ThCh$

As of January 1, 2000
Transfer of prior year loss to retained earnings
Changes in equity of afﬁ liates
Cumulative translation adjustment
Issuance of shares
Price-level restatement
Net income for the year

6,800,000
-
-
-
1,491,020
-
-

23,295,280
398,624,586 24,184,786
-
-
-
- (18,382,462)
-
1,170,476
-
-
-
6,035,445
286,758,950
1,183,427
1,203,739
22,015,443
-
-
-

330,716,485
(78,158,729)
-
-
-
11,870,214
-

(78,158,729)
78,158,729
-
-
-
-
90,082,590

698,662,408
-
(18,382,462)
1,170,476
292,794,395
36,272,823
90,082,590

As of December 31, 2000

8,291,020

707,398,979 31,423,970

7,266,721

264,427,970

90,082,590 1,100,600,230

Restated as of December 31, 2001 (1)

8,291,020

729,328,347 32,398,114

7,491,989

272,625,237

92,875,150 1,134,718,837

As of January 1, 2001
Transfer of prior year income to retained earnings
Dividends
Cumulative translation adjustment
Price-level restatement
Net income for the year

8,291,020
-
-
-
-
-

707,398,979 31,423,970
-
-
-
-
-
-
974,144
21,929,368
-
-

7,266,721
-
-
18,892,550
225,268
-

264,427,970
90,082,590
(14,976,824)
-
10,615,407
-

90,082,590 1,100,600,230
-
(14,976,824)
18,892,550
33,744,187
40,926,246

(90,082,590)
-
-
-
40,926,246

As of December 31, 2001

8,291,020

729,328,347 32,398,114 26,384,539

350,149,143

40,926,246 1,179,186,389

(1) Restated in thousands of constant pesos as of December 31, 2001.

2
2

0
0

2
2

/
/

Audited Unconsolidated Statements of Cash Flows

Cash ﬂ ows from operating activities:
Net income for the year
Gain (loss) from sales of assets:
Loss from sales of ﬁ xed assets
Gain on sales of investments
Charges (credits) to income which do not represent cash ﬂ ows:
Depreciation
Amortization of intangibles
Equity participation in income of related companies
Equity participation in losses of related companies
Amortization of goodwill
Amortization of negative goodwill
Price-level restatement
Foreign currency translation
Changes in assets which affect cash ﬂ ows:
Increase in trade receivables
Decrease in other assets
Changes in liabilities which affect cash ﬂ ows:
Decrease in accounts payable associated with operating results
Increase in interest payable
Decrease in income tax payable
Increase (decrease) in other accounts payable
associated with non-operating results
Net decrease in value-added tax and other similar taxes payable

2000
ThCh$

Years ended December 31,
2001
ThCh$

2001
ThUS$

92,875,150

40,926,246

62,503

-
(83,662,791)

786,097
67,757
(226,192,196)
12,281,800
43,189,598
(14,869)
(227,453)
24,517,588

(428,272)
41,935,808

(11,383,528)
7,186,264
(4,207,703)

(1,597,144)
(1,809,030)

5,625
-

776,885
69,241
(241,518,946)
9,839,356
49,000,967
(63,276)
(1,536,998)
36,216,375

(29,439)
81,386,875

(15,297,423)
31,281,561
(8,064,316)

15,777,470
(2,208,549)

9
-

1,186
106
(368,849)
15,027
74,835
(97)
(2,347)
55,310

(45)
124,295

(23,362)
47,773
(12,316)

24,095
(3,373)

Net cash ﬂ ows used in operating activities

(106,682,924)

(3,438,346)

(5,250)

Cash ﬂ ows from ﬁ nancing activities:
Issuance of shares
Proceeds from the issuance of debt
Proceeds from bond issuances
Proceeds from other loans obtained from related companies
Dividends paid
Payment of debt
Payment of bonds
Payment of loans obtained from related companies
Payment of other loans obtained from related companies
Payment of bond issuance costs
Other disbursements for ﬁ nancing

305,169,385
22,090,228
-
147,527,405
(238,256)
(325,123,150)
(6,930,794)
(123,416,037)
(4,630,154)
-
-

-
708,926,167
99,340,735
6,965,213
(15,394,425)
(393,889,224)
(3,300,903)
(149,319,991)
(156,548,844)
(967,133)
(5,573,871)

-
1,082,677
151,714
10,637
(23,510)
(601,550)
(5,041)
(228,043)
(239,083)
(1,477)
(8,512)

Net cash provided by ﬁ nancing activities

14,448,627

90,237,724

137,812

Cash ﬂ ow from investing activities:
Sale of permanent investments
Proceeds of loans from related parties
Other investment income
Additions to property, plant and equipment
Long-term investments
Loans granted to related companies
Other loans granted to related companies
Other investment disbursements

-
326,793,311
9,458,609
(640,533)
(297,913,918)
(111,449,158)
(85,924,901)
-

241,104,507
93,059,244
13,009,803
(71,286)
(11,060,425)
(178,338,316)
-
(20,151)

-
142,121
19,869
(109)
(16,892)
(272,360)
-
(31)

Net cash provided by (used in) investing activities

81,427,917

(83,421,131)

(127,402)

(10,806,380)
2,133,770
(8,672,610)
8,708,870

3,378,247
366,556
3,744,803
36,260

Cash and cash equivalents end of year

36,260

3,781,063

5,160
560
5,720
55

5,775

Notes to the Audited Unconsolidated
Financial Statements

Translation of ﬁ nancial statements originally issued in Spanish – See Note 2

(Restated for general price-level changes and expressed in thousands of constant Chilean pesos as of December 31, 2001, except as stated)

Note 1

Note 2

Description of Business:

Enersis S.A. (the “Company”) is registered in the Securities Register under No. 0175 and is regulated by the Chilean

Superintendency of Securities and Insurance (the “SVS”). The Company issued publicly-registered American Depositary Receipts

in 1993 and 1996. Enersis S.A. also reports to United States Securities and Exchange Comission of the United States.

Summary of Signiﬁ cant Accounting Policies:

(a) General:

The ﬁ nancial statements of the Company have been prepared in accordance with generally accepted accounting principles

in Chile and the regulations established by the SVS (collectively “Chilean GAAP”), except for the investments in related

companies which are reported on a single line in the balance sheet at their equity value, and therefore, have not been

consolidated line-by-line. This treatment does not modify the net income or equity of the Company for the year.

The preparation of ﬁ nancial statements in conformity with Chilean GAAP requires management to make estimates and

assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities

as of the date of the ﬁ nancial statements, and the reported amounted amounts of revenues and expenses during the

reporting period. Actual results could differ from those estimates.

The accompanying unconsolidated ﬁ nancial statements reﬂ ect the ﬁ nancial position and results of operations of the

agency formed by the Company in the Grand Cayman Islands in 1996.

(b) Periods covered:

These ﬁ nancial statements reﬂ ect the Company’s ﬁ nancial positions as of December 31, 2000 and 2001, and the results

of its operations, the changes in its shareholders’ equity and its cash ﬂ ows for the years ended December 31, 2000

and 2001.

The cumulative inﬂ ation rate in Chile as measured by the Chilean Consumer Price Index (“CPI”) for the three-year period

ended December 31, 2001 was approximately 10.66%.

Chilean GAAP requires that the ﬁ nancial statements be restated to reﬂ ect the full effects of loss in the purchasing power

of the Chilean peso on the ﬁ nancial position and results of operations of reporting entities. The method described

below is based on a model that enables calculation of net inﬂ ation gains or losses caused by monetary assets and

liabilities exposed to changes in the purchasing power of local currency. The model prescribes that the historical cost

of all non-monetary accounts be restated for general price-level changes between the date of origin of each item and

the year-end.

2
2

0
0

4
4

/
/

The ﬁ nancial statements of the Company have been price-level restated in order to reﬂ ect the effects of the changes in

the purchasing power of the Chilean currency during each year. All non-monetary assets and

liabilities, all equity accounts and income statement accounts have been restated to reﬂ ect the changes in the CPI from

the date they were acquired or incurred to year-end (see also Note 17).

The purchasing power gain or loss included in net income reﬂ ects the effects of Chilean inﬂ ation on the monetary assets

and liabilities held by the Company.

The restatements were calculated using the ofﬁ cial consumer price index of the National Institute of Statistics and based

on the “prior month rule,” in which the inﬂ ation adjustments are based on the CPI at the close of the month preceding

the close of the respective period or transaction. This index is considered by the business community, the accounting

profession and the Chilean government to be the index that most closely complies with the technical requirement to

reﬂ ect the variation in the general level of prices in Chile, and consequently it is widely used for ﬁ nancial reporting

purposes.

The values of the Chilean consumer price indices used to reﬂ ect the effects of the changes in the purchasing power of

the Chilean peso (“price-level restatement”) are as follows:

November 30, 2000
November 30, 2001

Change over
Previous
November 30,

4.7%
3.1%

Index

106.82
110.10

By way of comparison, the actual values of the Chilean consumer price indices as of the balance sheet date are as follows:

December 31, 2000
December 31, 2001

Change over
previous
December 31,

4.5%
2.6%

Index

106.94
109.76

The above-mentioned price-level restatements do not purport to represent appraisal or replacement values and are only

intended to restate all non-monetary ﬁ nancial statement components in terms of local currency of a single purchasing

power and to include in net results for each year the gain or loss in purchasing power arising from the holding of

monetary assets and liabilities exposed to the effects of inﬂ ation.

Index-linked assets and liabilities

Assets and liabilities that are denominated in index-linked units of account are stated at the year-end values of the

respective units of account. The principal index-linked unit used in Chile is the Unidad de Fomento (“UF”), which is

adjusted daily to reﬂ ect the changes in Chile’s CPI. Certain of the Company’s investments are linked to the UF. As the

Company’s indexed liabilities exceed its indexed assets, the increase in the index results in a net loss on indexation.

Values for the UF are as follows (historical Chilean pesos per UF):

December 31, 2000
December 31, 2001

Ch$

15,769.92
16,262.66

Comparative ﬁ nancial statements

For comparative purposes, the historical December 31, 2000 and 2001 consolidated ﬁ nancial statements and their

accompanying notes have been presented in constant Chilean pesos as of December 31, 2001. Amounts previously

presented in constant Chilean pesos as of each balance sheet date have been adjusted by the percentage changes in

the CPI to December 31, 2001, as follows:

Period

2000
(1) Equivalent to the amounts for 2000 multiplied by the change in the CPI for 2001.

Change in Index

3.1% (1)

This updating does not change the prior periods’ statements or information in any way except to update the amounts

to constant Chilean pesos of similar purchasing power.

Convenience translation to U.S. dollars

The ﬁ nancial statements are stated in Chilean pesos. The translations of Chilean pesos into US dollars are included

solely for the convenience of the reader, using the observed exchange rate reported by the Chilean Central Bank as of

December 31, 2001 of Ch$ 654.79 to US$ 1.00. The convenience translations should not be construed as representations

that the Chilean peso amounts have been, could have been, or could in the future be, converted into US dollars at this

or any other rate of exchange.

(d) Assets and liabilities in foreign currency:

Assets and liabilities denominated in foreign currency are detailed in Note 23. These amounts have been stated at the

observed exchange rates reported by the Central Bank of Chile as follows:

Currency

United States dollar (Observed)
Euro
Unidad de Fomento (UF)

Symbol used
Ch$

US$
_
UF

2000
Ch$

573.65
538.84
15,769.92

2001

654.79
578.18
16,262.66

During the years ended December 31, 2000 and 2001, the Argentine peso has been pegged to the US dollar at a rate of

1 Argentine peso to 1 US dollar. In early December 2001, restrictions were put in place that prohibited cash withdrawals

above a certain amount and foreign money transfers, with certain limited exceptions. While the legal exchange rate

remained at 1 peso to 1 US dollar, ﬁ nancial institutions were allowed to conduct only limited activity due to these controls,

and currency exchange activity was effectively halted except for personal transactions in small amounts. In January 2002,

the Argentine government announced its intent to create a dual currency system with a “ofﬁ cial” ﬁ xed exchange rate of

1.4 pesos to 1 US dollar for import, and export transactions and a “free” ﬂ oating exchange rate for other transactions. On

January 11, 2002, the exchange rate market holiday ended and closing new “free” ﬂ oating exchange rates ranged from

1.6 to 1.7 pesos to 1 US dollar. In accordance with SVS Circular No. 81 the conversion of Argentine subsidiary ﬁ nancial

statements reﬂ ect the conversion of 1.7 pesos to 1 US dollar.

(e)

Property, plant and equipment:

Property, plant and equipment are recorded at contributed amounts or cost, as appropriate, plus price-level restatement.

The charge to income by depreciation of the period as amount to ThCh$786,097 and ThCh$776,885 for the years ended

December 31, 2000 and 2001.

2
2

0
0

6
6

/
/

In 1986, an increase based upon a technical appraisal of property, plant and equipment was recorded in the manner

authorized by the SVS in Circulars No.’s 550 and 566 dated October 15 and December 16, 1985, respectively, and

Communication No. 4.790, dated December 11, 1985.

(f) Depreciation:

Depreciation expense is calculated on the revalued balances using the straight-line method over the estimated useful lives

of the assets. The depreciation charged to income amounted to ThCh$786,097 and ThCh$776,885 for the years ended

December 31, 2000 and 2001, respectively. The charges are classiﬁ ed under “Cost of sales” in amounts of ThCh$779,347

and ThCh$751,050, and under “Administrative and selling expenses” in amounts of ThCh$6,750 and ThCh$25,835 for

the years ended December 31, 2000 and 2001, respectively.

(g) Allowance for doubtful accounts:

There were no write-offs of uncollectible accounts receivable during the years ended December 31, 2000 and 2001.

(h)

Intangibles, other than goodwill:

Intangibles other than goodwill correspond mainly to easements and are amortized according to the standards deﬁ ned

in Technical Bulletin No. 55 of the Chilean Association of Accountants.

(i)

Investments in related companies:

Investments in related companies are included in Other non-current assets using the equity method. This valuation

method recognizes in income the Company’s equity in the net income or loss of each investee on the accrual basis

(Note 8).

Investments in foreign afﬁ liates are recorded in accordance with Technical Bulletin No. 64 of the Chilean Association

of Accountants.

(j) Goodwill and negative goodwill:

Goodwill and negative goodwill are determined according to Circular No. 368 of the SVS. Amortization is determined

using the straight-line method, considering the nature and characteristic of each investment, foreseeable life of the

business and investment return, and does not exceed 20 years.

(k) Bonds:

Bonds payable are recorded at the face value of the bonds. The difference between the face value and the placement

value, equal to the premium or discount, is deferred and amortized over the term of the bonds.

(l)

Income taxes and deferred income taxes:

In accordance with circular No. 986 issued in 1991 by the SVS and Technical Bulletin No. 41 issued by the Chilean

Association of Accountants, the Company records the effects of deferred taxes resulting from signiﬁ cant timing differences

that will not be fully offset when they reverse by similar new differences.

In accordance with circular No. 1466 issued in 2000 by the SVS, deferred taxes are presented in accordance with BT’s

No.’s 60 and 68 of the Chilean Association of Accountants, which is effective as of January 1, 2000.

(m) Severance indemnity:

The severance indemnity that the Company is obliged to pay to its employees under the collective bargaining agreements

is stated at the present value of the beneﬁ t under the vested cost method, discounted at 9.5% for the years ended

December 31, 2000 and 2001, and assuming an average employment span which varies based upon years of services

with the Company.

(n) Pension and post-retirement beneﬁ ts:

Pension and post-retirement beneﬁ ts are recorded in accordance with the respective Collective Bargaining Contracts of

the employees based on the actuarially determined projected beneﬁ t obligation.

(o)

Financial derivative contracts:

As of December 31, 2000 and 2001, the Company has entered into foreign currency forward, interest rate swaps and

collars contracts with various ﬁ nancial institutions to manage exposure related to certain foreign currency denominated

balance sheet positions. Forward contracts are recorded in accordance with Technical Bulletin No. 57 of the Chilean

Association of Accountants, and are held with related companies for investment purposes.

(p) Research and development costs:

Costs incurred in research and development by the Company are either general in nature (water-level studies, hydroelectric

research, seismic-activity surveys) which are expensed as incurred, or studies related to speciﬁ c construction projects

which are capitalized.

(q) Statements of cash ﬂ ows:

The Consolidated Statements of Cash Flows have been prepared in accordance with the indirect method.

Investments considered as cash equivalents, as indicated in point 6.2 of Technical Bulletin No. 50 issued by the Chilean

Association of Accountants, include time deposits, investments in ﬁ xed income securities classiﬁ ed as marketable securities,

repurchase agreements classiﬁ ed as other current assets, and other balances classiﬁ ed as other accounts receivable

with maturities less than 90 days.

For classiﬁ cation purposes, cash ﬂ ows from operations include collections from clients and payments to suppliers, payroll

and taxes.

(r)

Reclassiﬁ cations:

Certains amounts in the prior years’ ﬁ nancial statements have been reclassiﬁ ed in order to conform with the current

Note 3

year’s method of presentation.

Change in Accounting Principle:

There were no changes in accounting principles during the current year that would effect the comparison with the prior

year’s ﬁ nancial statements.

2
2

0
0

8
8

/
/

Note 4

Transactions with Related Companies:

Balances of accounts receivable and payable classiﬁ ed according to the nature of the transaction are as follows as of

December 31, 2000 and 2001:

a. Notes and accounts receivable:

Company

As of December 31,

Short-term

2000
ThCh$

2001
ThCh$

Long-term

2000
ThCh$

2001
ThCh$

Chilectra S.A.
Synapsis, Soluciones y Servicios IT Ltda.
Inmobiliaria Manso de Velasco Ltda.
Cía. Americana de Multiservicios Ltda.
Compañía Eléctrica del Río Maipo S.A.
Enersis Internacional
Agencia Chilectra S.A.
Enersis de Argentina S.A.
Empresa Eléctrica de Panamá S.A.
Edelnor S.A.
Sociedad Panameña de Electricidad S.A.
Companhia de Eletricidade do Río de Janeiro
Enersis Investment S.A.
Interocean Developments Inc.
Luz de Bogotá S.A.
Edesur S.A.
Luz de Rio Ltda.
Cerj Overseas
Codensa S.A.
Empresa Eléctrica de Colina Ltda.
Endesa S.A. (Chile)
Cía. Americana de Multiservicios Uno Ltda.
Elesur S.A.
Inversiones Distrilima S.A.
Ingendesa S.A.
Infraestructura 2000 S.A.
Túnel el Melón S.A.
Smartcom S.A.
Luz Andes Ltda.
Autopista Los Libertadores S.A.
Endesa S.A. (España)
Endesa Inversiones Generales S.A.
Autopista del Sol S.A.
Compañía Eléctrica Tarapacá S.A. (Celta)
Endesa Internacional S.A.

2,893,101
178,340
15,475,935
4,064,031
296,084
110,416
3,637
1,021
23,270
56,281
317
17,731
58
181
20,529
50,828
14,171
15,579
12,097
151
553,122
1,898,050
312
503
38,073
46,594
5,516
-
-
-
-
-
-
-
-

3,815,026
77,318
10,792,183
6,341,342
78,350
523,072
10,691
1,130
43,759
62,985
350
19,631
-
1,079
22,729
58,364
15,689
1,099,361
13,393
1,114
47,851,369
4,870,517
16,600
488
67,321
175,137
50,658
17
165
1,627
353,985
15,765
2,542
10,754
2,386

217,021,249
-
-
-
5,992,644
33,676,790
213,093,076
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-

259,039,035
-
-
-
-
36,708,459
300,709,305
-
15,303,630
-
-
-
-
-
-
-
-
32,739,500
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-

Total

25,775,928

76,396,897

469,783,759

644,499,929

b. Notes and accounts payable:

Company

Chilectra S.A.
Synapsis, Soluciones y Servicios IT Ltda.
Inmobiliaria Manso de Velasco Ltda.
Cía. Americana de Multiservicios Ltda.
Compañía Eléctrica del Río Maipo S.A.
Enersis Internacional
Endesa S.A. (Chile)
Edelnor S.A.
Cía. Americana de Multiservicios Uno Ltda.
Enersis de Argentina S.A.
Enersis Investments S.A.
Edesur S.A.
Elesur S.A.
Smartcom S.A.
Infraestructura 2000 S.A.
Túnel el Melón S.A.
Endesa Inversiones Generales S.A.
Ingendesa S.A.
Interocean Developments Inc.

As of December 31,

Short-term

2000
ThCh$

2001
ThCh$

Long-term

2000
ThCh$

2001
ThCh$

117,063,898
6,117,517
182,436
272,025
25,862,634
13,421
52,941,743
13,881
8,129,699
19,871
34,672,396
13,210
11,711,657
19,998
-
-
-
-
-

77,204,560
4,607,654
70,128
142,181
3,144,762
15,857
398,995
15,368
78,072
35,097
-
14,626
16,785,722
19,396
410
61
27,887
376
4,294

30,966,400
-
-
-
-
59,116,556
-
-
-
-
160,956,430
-
1,033,330,968
-
-
-
-
-
-

58,569,056
-
-
2,208,423
4,922,615
-
-
-
-
-
-
-
956,291,278
-
-
-
-
-
-

Total

257,034,386

102,565,446

1,284,370,354 1,021,991,372

2
2

1
1

0
0

/
/

Effects in income (expense) for each year-ended December 31 are as follows:

Company Name

Chilectra S.A.

Inmobiliaria Manso de Velasco Ltda.

Cía Americana de Mulitiservicios Ltda

Synapsis, Soluciones y Servicios IT Ltda.

Compañía Eléctrica del Río Maipo S.A.

Enersis Internacional
Enersis Investment S.A.
Chilectra Internacional
Interocean Development Inc.
Empresa Eléctrica de Panamá S.A.
Empresa distribuidora del Sur S.A.
Elesur S.A.
Endesa S.A. (Chile)
Endesa inversiones Generales S.A.
Compañía Americana de Multiservicios Uno Ltda.

Atacama Finance Co.

Through the Agency :
Agencia Caymán de Chilectra S.A.
Empresa Eléctrica de Panamá S.A.
Enersis Investment S.A.
Enersis Internacional
Chilectra Argentina S.A.
Sociedad Panameña de Electricidad S.A.
Interocean Developments Inc.
Cerj Overseas
Luz de Panamá S.A.
Endesa Agencia
Compañía Eléctrica del Cono Sur S.A.
Chilectra Internacional

Nature of
Transaction

Income (expense)

2000
ThCh$

2001
ThCh$

Loans
Property rentals
Services
Materials
Loans
Property rentals
Services
Loans
Services
Materials
Loans
Services
Loans
Services
Loans
Loans
Loans
Loans
Loans
Services
Loans
Loans
Property rentals
Loans
Property maintenance
Services
Loans

Loans
Loans
Loans
Loans
Usufruct dividend loss
Loans
Loans
Loans
Loans
Loans
Loans
Loans

(13,908,715)
4,156,301
4,403,709
(826)
2,796,319
(818,337)
1,430
292,961
194,603
(274,914)
(637,621)
(536,923)
223,258
587,700
(354,326)
415,278
9,004
339,028
45,796
4,069,306
(71,361,781)
10,534,882
-
1,542,556
(709,855)
405,087
517,552

18,677,991
5,508,655
(4,677,845)
2,060,087
(5,608,079)
302
4,853,217
5,680,831
1,455,814
181,135
869,170
(196,640)

9,208,102
4,159,238
4,277,980
-
1,909,251
(454,927)
-
243,818
191,011
(154,800)
(533,583)
(541,626)
(42,267)
534,597
121,387
-
-
-
-
6,789,680
(50,012,000)
(286,787)
(203,608)
311,055
(458,541)
389,289
-

20,301,811
1,216,637
-
(1,900,570)
(15,032,698)
-
-
1,134,545
-
628,596
-
-

Total

(29,263,890)

(18,204,410)

The transfer of short-term funds between related companies, which are not for collection or payment of services, is on the

basis of a current cash account, at a variable interest rate based on market conditions. The resulting accounts receivable

and accounts payable are essentially on 30 day terms, with automatic rollover for the same period and settlement in

line with cash ﬂ ows.

The most signiﬁ cant transactions in accounts receivable and accounts payable are as follows:

Company Name

Type

Due Date

Currency

Capital

Chilectra S.A.

Accounts receivable

09/29/03

Accounts payable
Accounts payable
Accounts payable
Accounts payable

12/31/03
08/29/04
08/29/04
08/14/03

Cia. Americana de Multiservicios Ltda.

Accounts payable

06/05/04

Cía. Eléctrica del Río Maipo S.A.

Accounts payable

07/25/04

Elesur S.A.

Through the agency :
Agencia Caymán de Chilectra S.A.

Accounts payable
Accounts payable
Accounts payable

05/13/03
05/13/03
08/29/03

Accounts receivable
Accounts receivable

07/10/07
12/12/03

Cerj Overseas

Accounts receivable

08/02/04

Enersis International

Accounts receivable
Accounts receivable

11/21/03
12/07/03

Empresa Eléctrica de Panamá S.A.

Accounts receivable

12/22/03

US$

UF
UF
UF
US$

UF
UF
UF

US$
US$

US$

US$
US$

US$

395,606,279

2,003,541
339,609
452,501
20,012,988

135,797

302,694

35,827,779
22,873,999
101,103

456,941,413
2,304,000

50,000,000

22,061,423
34,000,000

23,371,813

Interest
Rate

7.56%

5,97%
5.98%
5.98%
5.38%

6.56%

4.82%

4.66%
5.38%
5.38%

7.07%
2.98%

7.88%

3.19%
3.00%

6.99%

Note 5

Deferred income taxes:

Income taxes (recoverable) payable as of each year-end are as follows:

Income tax provision – current
Income tax installments
Total

As of December 31,

2000
ThCh$

7,758,685
180,145
7,938,830

2001
ThCh$

11,513,829
129,898
11,643,727

The Company incurred taxable losses in the amount of ThCh$ 110,436,055 and ThCh$ 87,130,898 for the years ended

December 31, 2000 and 2001, respectively.

2
2

1
1

2
2

/
/

The balance of taxed retained earnings and the related tax credits are as follows:

Year

2000
2001

Retained Deﬁ cit
ThCh$

-
(17,630,654)

Credit
ThCh$

-
-

In accordance with BT No. 60 and 69 of the Chilean Association of Accountants, and Circular No. 1,466 of the SVS, the

Company has recorded consolidated deferred income taxes as of December 31, 2000 and 2001 as follows:

As of December 31, 2000

As of December 31, 2001

Asset

Liability

Asset

Liability

Short-term
ThCh$
212,912
-

16,563,317

77,079

(18,333)

Long-term
ThCh$
-
-

Short-term
ThCh$
-
-

Long-term
ThCh$
1,489,525
61,928

78,516

753,072

420,483

5,311

(4,636)

(80,677)

Short-term
ThCh$
-
-

2,820,905

69,927

38,618

85,964

13,258

187,979

Long-term
ThCh$
-
-

Short-term
ThCh$
-
-

Long-term
ThCh$
1,852,190
93,539

88,931

251,907

587,026

5,494

12,721

156,766

1,655,226

(3,373)

(164,134)

Depreciation
Severance indemnities

Tax losses

Deferred income

Deferred charges

Vacation accrual

Other events

Other provisions

Bonds discounts

Complementary accounts, net

Valuation allowance

Total

16,834,975

78,516

753,747

1,891,259

3,216,651

88,931

410,794

4,036,568

2000
ThCh$

Net short -term deferred tax assets

Net long-term deferred tax liability

16,081,228

(1,812,743)

2001
ThCh$

2,805,857

(3,947,637)

According to Law No. 19,753, the income tax rate for ﬁ rst category taxes will increase from 15% to 16% during 2002,

16.5% in 2003, and 17% in 2004. As of December 31, 2001, the new tax rate increased deferred income tax assets and

liabilities by ThCh$ 232,231 and ThCh$ 502,690, respectively. These deferred tax amounts are presented in the balance

sheet as current or noncurrent, depending on the amortization period that management has determined. Additionally,

the increased tax rate has resulted in a greater tax expense of ThCh$ 270,459.

Income tax expense for the year ended December 31, 2000 and 2001 is as follows:

Tax expense
Income tax provision

Deferred taxes
Adjustment to tax expense prior year
Beneﬁ t for tax losses
Amortization of complementary accounts
Change in complementary accounts
Other changes or credits

As of December 31,

2000
ThCh$

(12,002,124)

-
16,563,317
(1,593,105)
1,239,615
-

2001
ThCh$

(1,249,470)
10,229,123
102,541
(1,001,203)
(16,675)

Total

4,207,703

8,064,316

Note 6

Other current assets:

Other current assets as of each year-end are as follows:

Forward contracts and swaps (1)
Deferred expenses
Post-retirement beneﬁ ts
Interest rate collars
Bond discount
Others

Total
(1) See detail in Note 20.

As of December 31,

2000
ThCh$

115,920,897
4,683,479
35,402
-
337,005
174,945

2001
ThCh$

107,385,560
787,226
34,338
787,194
979,785
149,321

121,151,728

110,123,424

Note 7

Property, plant and equipment:

The composition of property, plant and equipment at each year-end is as follows:

Buildings and infrastructure
Machinery and equipment
Equipment in transit
Sub-total

Technical appraisal
Total property, plant and equipment

Less: accumulated depreciation
Total property, plant and equipment, net

As of December 31,

2000
ThCh$

19,992,617
1,421,538
1,010,327
22,424,482

31,933
22,456,415

(8,778,554)
13,677,861

2001
ThCh$

19,992,617
1,502,357
1,312,457
22,807,431

31,914
22,839,345

(9,546,551)
13,292,794

2
2

1
1

4
4

/
/

Note 8

Investment in related companies:

Investments are summarized as follows:

Related Companies

Number of Shares Percentage

Owned

Carrying Value

Equity in net earnings (losses)

Related
Equity

ThCh$

2000

ThCh$

2001

ThCh$

2000

ThCh$

2001

ThCh$

Empresa Nacional de Electricidad S.A.
Chilectra S.A.

4,919,488,794
359,602,436

59.98
98.24

1,404,416,926
483,782,188

Enersis Investment S.A.
Enersis Internacional

Interocean Developments Inc.
Empresa Eléctrica de Panamá S.A.

Empresa Distribuidora Sur S.A.
Distrilec Inversora S.A.

Inmobiliaria Manso de Velasco Ltda.

-
360,557,687

21,960
186,081,623

143,996,758
101,684,374

29,462,253

100.00

100.00
80.99

16.02
20.43

99.99

-
293,490,193

132,793,176
130,732,979

657,526,145
370,573,441

48,773,158

801,821,151
424,252,616

360,141,411
256,970,537

119,142,402
103,721,761

91,672,962
65,882,910

45,014,840

842,382,354
475,266,873

66,925,263
47,425,812

- 22,889,774
38,464,693

293,490,194

42,021,602
69,711,842

-
54,747,417

132,793,176
105,893,600

105,367,472
75,724,715

(1,121,850)
(10,854,593)

5,318,212
(9,002,504)

9,101,387
6,528,527

13,018,931
9,360,525

48,773,141

7,777,446

5,433,176

Companhia de Eletricidade do Río de Janeiro

136,290,186,189

7.99

475,231,502

34,570,357

38,009,639

(264,043)

Compañía Eléctrica del Río Maipo S.A.

Inversiones Distrilima S.A.

Compañía Americana de Multiservicios Uno Ltda.

Synapsis, Soluciones y Servicios IT Ltda.

Compañía Americana de Multiservicios Ltda.

Endesa Market Place

Enersis de Argentina S.A.

Electric Investment

Codensa S.A.

Enersis Energía de Colombia S.A.

Synapsis Colombia S.A.

Central Termelétrica Fortaleza S.A.

Luz de Bogotá S.A.

Constructora El Gobernador

356,078,645

58,311,641

29,462,253

10,569,721

4,359,440

210

119,999

30,000,000

20,246,908

98.74

14.79

99.99

99.93

15.00

99.99

21,612,434

21,406,839

21,340,646

8,404,859

8,862,187

155,063,394

21,108,772

22,933,876

1,138,987

1,772,256

11,161,354

7,310,711

5,121,713

3,898,874

95,160

8,678,712

5,027,646

2,321,269

810,596

99,995

11,161,350

4,687,229

4,069,975

7,309,980

4,996,589

5,313,725

5,118,191

584,831

2,259,687

3,993,070

(303,148)

(326,608)

95,159

5,591,941

15,018,563

17,008,146

- 1,080,269,268

99.99

0.10

48.82

25.71

293,346

574,766

10,712,307

624,508,581

15,529,421,297,372

- 19,885,420

293,346

574

5,229,748

- 160,587,923

(2,209)

(246,201)

444

2,877,018

Total

2,379,652,948 2,352,356,825

213,910,396 231,679,590

In accordance with Technical Bulletin No. 64 of the Chilean Association of Accountants for the years ended December

31, 2000 and 2001, the Company has recorded foreign exchange gains and losses on liabilities related to net investments

in foreign countries that are denominated in same currency as the functional currency of those foreign investments.

Such gains and losses are included in the cumulative translation adjustment account in shareholders’ equity, and in

this way, act as a hedge of the exchange risk affecting the investments. As of December 31, 2001 the corresponding

amounts are as follows:

Company

Country of Origin

Edesur S.A.
Edelnor S.A.
Companhia de Eletricidade do Río de Janeiro
Luz de Bogotá S.A.
Investluz S.A.

Argentina
Perú
Brasil
Colombia
Brasil

Investment
ThCh$

215,447,128
45,024,920
193,828,458
164,125,446
81,214,637

Reporting
Currency

US$
US$
US$
US$
US$

Liability
ThCh$

195,637,576
33,495,134
154,029,298
211,802,052
89,225,234

Total

699,640,589

684,189,294

Investments year 2001

The investments made by Enersis during the year ended December 31, 2001 amounted

to ThCh$11,060,425, which are described as follows .

Acquisitions

Central Termelétrica Fortaleza S.A.
Chilectra S.A.
Compañía Electrica del Río Maipo S.A.
Panaguide Corporation Inc.
Endesa Market Place
Electric Investment
Companhia de Electricidade do Río de Janeiro

As of December 31,

2000
ThCh$

-
198,706,282
13,621,454
(47)
1,124,204
17,078,117
67,383,908

2001
ThCh$

5,739,102
4,837,695
483,628
-
-
-
-

Total

297,913,918

11,060,425

d. Dissolution of investment vehicles

During the period ended as of December 31, 2001, Electric Investment S.A. and Enersis Investment S.A. have been

dissolved and have been absorbed by Enersis S.A.

Subsidiaries in Argentina

The Company has direct and indirect investments in Argentina, which are recorded according to the Chilean Association

of Accountants, Technical Bulletin No. 64. These investments represent 14.3% of total assets, 26.9% of total revenues,

and 20.8% of total operating income. The application of SVS Circular No. 81 for the Company’s Argentine subsidiaries

amounted to a charge of approximately US$3,000,000, net of minority interest.

Note 9

Goodwill:

In accordance with current standards, recognition has been given to the excess of purchase price of the proportional

equity in the net assets acquired (goodwill) in the purchase of shares as of December 31, 2000 and 2001, as follows:

Company

Empresa Nacional de Electricidad S.A.
Distrilec Inversora S.A.
Chilectra S.A.
Inversiones Distrilima S.A.
Compañía Electrica del Río Maipo S.A.
Empresa Distribuidora Sur S.A.
Luz de Bogotá S.A.

As of December 31,

2000

2001

Amortization
ThCh$

Net Balance
ThCh$

Amortization
ThCh$

Net Balance
ThCh$

(41,707,067)
(225,448)
(976,740)
(1,235)
(34,597)
(244,511)
-

731,610,791
3,995,159
103,683,693
17,285
10,633,471
3,647,294
-

(41,707,069)
(249,599)
(5,998,849)
(1,367)
(549,956)
(270,704)
(223,423)

689,903,722
4,173,539
109,150,041
17,768
10,487,406
3,767,305
3,537,531

Total

(43,189,598)

853,587,693

(49,000,967)

821,037,312

2
2

1
1

6
6

/
/

Following current standards, recognition has been given to the excess of the equity in the net assets purchased over the

purchase price (negative goodwill) in the purchase of shares as of December 31, 2000 and 2001 as follows:

Company

As of December 31,

2000

Amortization
ThCh$

Net Balance
ThCh$

2001
Amortization Net Balance

ThCh$

Synapsis Soluciones y Servicios IT Ltda.
Companhia de Electricidade do Río de Janeiro

14,869

(167,280)
(874,451)

14,870
48,406

(152,411)
(919,720)

Total

14,869

(1,041,731)

63,276

(1,072,131)

Note 10

Due to banks and ﬁ nancial institutions current portion:

Current portion of long-term debt due to banks and ﬁ nancial institutions:

Foreign Currency

Local Currency

Total

US$

Other foreign currencies

Ch$

Financial Institution

2000

ThCh$

2001

ThCh$

2000

ThCh$

2001

ThCh$

2000

ThCh$

2001

2000

2001

ThCh$

2000

ThCh$

2001
ThCh$

Bank of América

1,043,419

5,235,323

BBVA

BNP España

Citibank

Dresdner Bank

HSBC

569,287

3,463,868

411,577

1,231,899

394,607

228,970

20,961

Santander Central Hispano

8,009,615

1,056,350

Bank of Tokyo Mitsubishi

ABN Amro

- 32,750,868

- 499,884

Banco Negocios Argentaria

3,957,674

Midland Bank

Argentaria Bank

99,804

27,817

Total

18,245,673

40,756,250

1,043,419

5,235,323

569,287

3,463,868

411,577

1,231,899

394,607

228,970

20,961

8,009,615

1,056,350

32,750,868

499,884

3,957,674

99,804

27,817

18,245,673

40,756,250

Percentage of debt in foreign currency:
Percentage of debt in local currency:

As of December 31,

2000
%
100.00
0.00

2001
%
100.00
0.00

Total

100.00

Note 11

Other current liabilities:

Other current liabilities as of each year-end are as follows:

Forward contracts and swaps
Interest rate collars
Cross-Currency swaps

Total

Note 12

Due to banks and ﬁ nancial institutions:

As of December 31,

2000
ThCh$

2001
ThCh$

113,458,020

-
-

109,864,260
1,362,334
(203,763)

113,458,020

111,022,831

Long–term debt:

As of December
31, 2000

Financial Institution Currency

long term
portion
ThCh$

After 1
years but
within 2
years
ThCh$

As of December 31, 2001
After 3
years but
within 5
years
ThCh$

After 5
years but
within 10
years
ThCh$

After 2
years but
within 3
year
ThCh$

Bank of América
Banco Negocios
Argentaria
BNP España
Citibank
Dresdner Bank
HSBC
Santander Central
Hispano
BBVA
Midland Bank
Argentaria Bank
ABN Amro

US$

82,150,064

26,783,907

US$
US$
US$
US$
US$

130,115,292
50,271,818
34,060,636
173,792,631
-

116,512,331
-
8,871,497
4,140,032
-

-
-
35,253,894
75,363,332
9,821,850

93,798,668
31,593,618
-
-
65,479,000

-
-
-
-
-

261,916,000
363,408,450
-
-
-

Total

US$

599,914,301 338,094,269

625,324,450

-
-
-
-
-

Percentage of debt in foreign currency:
Percentage of debt in local currency:

As of December 31,

2000
%
100.00
0.00

2001
%
100.00
0.00

Total

100.00

After 10
years
ThCh$

Total long Annual
interest
rate
%

term
portion
ThCh$

-
-
-
-
-

26,783,907

3.46

-
-
2.58
2.93
2.96

2.99
2.70
-
-
3.31

-
-
35,253,894
75,363,332
9,821,850

355,714,668
395,002,068
-
-
65,479,000

963,418,719

2
2

1
1

8
8

/
/

Note 13

Bonds payable:

a) Details of the current portion of bonds payable is as follows at each year-end:

Face Value
Series

Interest
Currency

Maturity
Outstanding
ThCh$

Par Value
Rate
%

B-1
B-2
1
2
3

UF
UF
US$
US$
US$

422,614
-
-
-
-

5.50
5.75
6.90
7.40
6.60

Date

Jun 15, 2009
Jun 15, 2022
Nov 21, 2006
Nov 21, 2016
Nov 21, 2026

2000
ThCh$

-
-
986,214
1,233,960
471,668

2001
ThCh$

7,021,839
102,447
1,091,861
1,366,147
522,194

2,691,842

10,104,488

Details of the long-term portion of bonds payable is as follows at each year-end:

Face Value
Series

Interest
Currency

Maturity
Outstanding
ThCh$

Par Value
Rate
%

Date

2000
ThCh$

2001
ThCh$

B-1
B-2
1
2
3

UF
UF
US$
US$
US$

3,374,406
2,500,000
300,000,000
350,000,000
150,000,000

5.50
5.75
6.90
7.40
6.60

Jun 15, 2009
Jun 15, 2022
Nov 21, 2006
Nov 21, 2016
Nov 21, 2026

-
-
177,429,944
207,001,603
88,714,973

54,876,822
40,656,650
196,437,000
229,176,500
98,218,500

473,146,520

619,365,472

Instrument

269
269
Yankee Bonds
Yankee Bonds
Yankee Bonds

Total

Instrument

269
269
Yankee Bonds
Yankee Bonds
Yankee Bonds

Total

Bonds payable are comprised of the following:

i) Series A:

On September 10, 1999, the Company registered a bearer bond issue, as of June 7, 1999 for a maximun amount of

UF 7,000,000 as follows:

Series

Total amount
in UF

No of bonds
per series

Face value
in UF

7,000,000

700

10,000

The scheduled maturity of the bonds is 30 years, interest is payable semi-annually with the principle payable in one

installment on June 15, 2029. Annual interest is 5.8%, compounded semi-annually. No placements from this registration

have been made as of December 31, 2001.

ii)

Enersis S.A. Series B1-B2

On September 11, 2001, Enersis S.A. registered two series of bearer bonds as of June 14, 2001, as follows:

Series

B1
B1
B2
B2

Total amount
In UF

No. of bonds
per series

Face value
In UF

1,000,000
3,000,000
1,000,000
1,500,000

1,000
300
1,000
150

1,000
10,000
1,000
10,000

The scheduled maturity of the Series B-1 bonds is 8 years, interest and principal payable semi-annually. Annual interest

is 5.50%, compounded semi-annually.

The scheduled maturity of the Series B-2 bonds is 21 years, principle payments beginning after 5 years, interest and

principal payable semi-annually. Annual interest is 5.75%, compounded semi-annually.

iii) Enersis S.A. Yankee Bonds

On November 21, 1996, the Company, acting through its agency in the Cayman Islands, issued corporate notes (Yankee

Bonds) for US$ 800 million in three series, as follows:

Series

1
2
3

Total amount
In US$

300,000,000
350,000,000
150,000,000

Years to
maturity

Statedannual
interest rate

10
20
30

6.90%
7.40%
6.60%

Interest is payable on a semi-annual basis and principal is due upon maturity. The Series 3 bond holders have an option

to require the Company to redeem all or any US$ 1,000 portion thereof on December 31, 2003 at a redemtion price

equal to face value.

Bond discounts of Enersis S.A. and its afﬁ liates of ThCh$ 11,819,650 and ThCh$ 23,554,931 as of December 31, 2000 and

2001, respectively are included in Other Assets.

Repurchase of Yankee Bonds

During November 2001, the Company made a tender offer to repurchase all or a portion of the Series 2 Yankee Bonds.

The offer expired November 21, 2001 and the Company repurchased a total of US$ 100,266,000 in bonds with accrued

interest, at a price of US$ 95,536,000, generating a ﬁ nancial gain of US$ 8,201,000 (ThCh$ 5,369,952), which is included

in Other non-operating income (see Note 16(a)).

2
2

0
0

/
/

Note 14

Accrued expenses:

Short-term accruals:

The accrued expenses included in current liabilities as of each year-end are as follows:

Bonus and other fringe beneﬁ ts
Other accrued expenses

As of December 31,

2000
ThCh$

1,527,340
566,007

2001
ThCh$

1,698,631
806,530

Total

2,093,347

2,505,161

Long-term accruals:

Long-term accruals include severance indemnities to personnel, calculated in accordance with the policy described

in Note 2, and the accrual for post-retirement beneﬁ ts. An analysis of the changes in the accruals in each year is as

follows:

Opening balance as of January 1
Increase in accrual
Payments during the period
Sub-total
Complementary pension and others

As of December 31,

2000
ThCh$

739,215
1,454,840
(1,145,083)
1,048,972
523,440

2001
ThCh$

1,017,432
1,024,345
(799,952)
1,241,825
525,561

Total

1,572,412

1,767,386

Note 15

Shareholders’ equity:

Issuance

As of October 10, 2000, the Company ﬁ nalized a private offering of shares, which commenced September 11, 2000,

issuing a total of 1,491,020,100 shares for total proceeds of ThCh$ 292,794,395, or US$ 520,000,000.

Dividends

There are no restrictions on the payment of dividends. The following dividends were paid as of each period-end:

Dividend
Number

Payment date

Historical value
Ch$ per share

Type of dividend

Related to

April 2001

1.806391

Final

2000

Number of shares

Series

First

Subscribed

As of December 31, 2001
Number of shares
Paid

With voting rights

8,291,020,100

Subscribed and paid capital is as follows as of the year-end:

Series

First

As of December 31, 2001

Capital subscribed
ThCh $

Capital paid
ThCh$

729,328,347

Net losses from operations and accumulated net earnings (losses) of development-stage subsidiaries are as

follows:

Company

Central Termeléctrica Fortaleza S.A.
Empresa Nacional de Electricidad S.A.

Total

Other reserves

As of December 31, 2001
Net Earnings (Losses)

Of the period
ThCh$

Accumulated
ThCh$

(352,381)
(47,006)

(352,381)
44,287

(399,387)

(308,094)

Other reserves are composed of the following as of December 31, 2001.

Accumulated net losses of development-stage subsidiaries
Reserve for variations in equity
Reserve for accumulated conversion differences

Total

As of December 31, 2001
ThCh$

(308,094)
2,318,686
24,373,947

26,384,539

Detail of changes in the cumulative translation adjustment are as follows for the year ended December 31, 2001:

Initial Balance
ThCh$

Reserve for Assets Reserve for Liabilities

ThCh$

Final Balance
ThCh$

Cumulative translation
Adjustment

5,082,010

129,217,211

(109,925,274)

24,373,947

Total

5,082,010

129,217,211

(109,925,274)

24,373,947

2
2

/
/

The changes in the cumulative translation adjustment due to gains and losses on assets and liabilities for the year ended

December 31, 2001 are as follows:

Total

Note 16

Other income and expenses:

The detail of other non-operating income in each year is as follows

As of December 31,
2001
ThCh$

1,194,316
1,988,910
3,646,102
7,704,951
4,083,256
1,366,696
4,445,832
100,857
(156,973)

24,373,947

Gain on repurchase of bonds
Adjustments to investments in related companies
Cost of projects, inspections and other
Gain on sale of investments (1)
Gain on forward contracs
Gain on interest rate swaps
Others

Total

(1) Before taxes

b. Other non-operating expenses in each year are as follows:

Adjustments to investments in related companies
Loss on forward contracts
Cost of projects, inspections and other
Usufruct contract
Other

Year ended December 31,

2000
ThCh$

-
5,712,674
10,503,382
83,662,791
5,314,780
-
368,928

2001
ThCh$

5,369,952
1,176
13,016,716
-
7,933,740
1,449,557
867,981

105,562,555

28,639,122

Year ended December 31,

2000
ThCh$

160,274
3,159,830
437,737
5,608,079
941,986

2001
ThCh$

206,346
-
-
15,032,698
569,169

Total

10,307,906

15,808,213

Note 17

Price-Level Restatement:

The (charge) credit to income for price-level restatement as of each year-end is as follows.

As of December 31,

Assets
Accounts receivable from subsidiaries
Long-term accounts receivable from subsidiaries
Fixed assets
Investment in subsidiaries
Investment in other companies
Amortization of goodwill
Other current assets
Other long-term assets
Credit to income for asset accounts
Net credits from assets

2000
ThCh$

3,781,891
21,803,457
655,678
81,224,805
2,791,103
35,740,525
484
3,215,594
1,004,659
150,218,196

Liabilities and Shareholders’ equity
Current accounts payable to subsidiaries
Long-term accounts payable to subsidiaries
Long-term portion of debt due to banks and ﬁ nancial institutions
Long-term portion of bonds payable
Shareholders’ equity
Other long-term liabilities
Credit (charge) to income for liability and shareholders’ equity accounts
Net charges from liabilities and shareholders’ equity accounts

(4,969,356)
(50,488,333)
(36,977,634)
(20,548,482)
(37,305,988)
-
299,050
(149,990,743)

2001
ThCh$

(41,850)
15,664,740
423,364
52,391,458
10,426,410
26,135,604
298
629,477
3,099,743
108,729,244

(703,133)
(31,540,634)
(22,338,578)
(14,226,520)
(33,744,187)
(3,474,147)
(1,165,047)
(107,192,246)

Net credit to income

227,453

1,536,998

Note 18

Foreign currency translation:

The (charge) credit to income for foreign currency translation as of each year-end is as follows:

Assets

Liabilities

Current assets

Currency

As of December 31,

2000

ThCh$

2001

ThCh$

Current liabilities

Currency

2000

ThCh$

2001

ThCh$

As of December 31,

Cash

Amounts due from related companies

Time deposits

Other current assets

Long-term receivables

Amounts due from related companies

Other current assets

US$

81,155

124,255

Accounts payable to related companies US$

(3,647,306)

(6,321,448)

7,536,721

2,230,537

Debt due to banks

2,622,450

157,012

Bonds payable

999,981

50,102

Other liabilities

Long-term liabilities

US$

(1,552,939)

(302,887)

(743,046)

(1,091,808)

(411,334)

9,209,723

51,851,195

Accounts payable to related companies US$

(514,654)

(5,371,305)

66,133

Debt due to banks

US$

(9,444,820)

(69,796,712)

(29,064,853)

(7,400,115)

Total (loss) gain

20,450,030 54,479,234

Total (loss) gain

(44,967,618)

(90,695,609)

Net charges to income

(24,517,588)

(36,216,375)

2
2

4
4

/
/

Note 19

Bond issuance costs:

The bond issuance costs related to the registration and issuance of the Enersis S.A. Series B-1 and Series B-2 Bonds

incurred as of December 31, 2001 are as follows:

Registration taxes
Broker commission
Other issuance costs

Total

Serie B-1
ThCh$

780,373
104,050
19,630

904,053

Serie B-2
ThCh$

487,782
50,811
12,268

550,861

Bond issuance costs are included in Other Current Assets and Other Assets, and will be amortized over the life of the

bonds. The amortization period for the Series B-1 is 8 years, Series B-2 is 21 years.

Note 20

Financial derivatives:

As of December 31, 2001 the Company held the following ﬁ nancial derivative contracts with ﬁ nancial institutions with the

object of decreasing exposure to interest rate and foreign currency risk according to the following detail:

Type (1)

FR
S
S
S
S
EO
EO
EO
EO

Nominal
Amount
US$

164,000,000
92,163,783
100,000,000
50,000,000
50,000,000
50,000,000
50,000,000
275,000,000
50,000,000

Date of
Maturity

Item

Sales/
Purch.

Hedged
Item

As of December 31, 2001
Closing
Hedged
Amount
ThCh$

Initial Hedged
Amount
ThCh$

I Quarter 02
II Quarter 09
I Quarter 03
I Quarter 04
III Quarter 04
II Quarter 04
II Quarter 06
III Quarter 04
III Quarter 05

Exchange rate
Exchange rate
Interest rate
Interest rate
Interest rate
Interest rate
Interest rate
Interest rate
Interest rate

P
P
P/S
P/S
P/S
P/S
P/S
P/S
P/S

(2)
Bonds
Bank Obligations
Bank Obligations
Bank Obligations
Bank Obligations
Bank Obligations
Bank Obligations
Bank Obligations

-
61,749,743
65,479,000
32,739,500
32,739,500
32,739,500
32,739,500
180,067,250
32,739,500

(1) Fr=Forward, EO=European Option, S=Swap
(2) Non-hedging instruments

Note 21

Commitments and contingencies:

Litigation and other legal actions

Court : 21st Civil Court of Santiago

Process number : C-2437-1999

Cause : Lawsuit in summary process interposed by the lawyer Mr. Eduardo Rodriguez Guarachi. The lawyer has

represented to the court that Enersis pay him US$ 250,000 for professional services rendered.

Process status: First petition ruling period.

Amounts involved: US$ 250,000.

ii.

Court : International court of the International Chamber of Commerce, París, France

Process number : 11046/KGA

Cause : On May 30, 2000, Pecom Energia S.A. and PCI Power Edesur Holding Limited (together, ¨Pérez Companc¨)

commenced an action against Endesa-Chile, Chilectra and Enersis before the Arbitration Court of the International

Chamber of Commerce, Paris, France. Pérez Companc has petitioned the court to either recognize its alleged right to

nominate both a director and an alternate director in addition to the directors whom it already has the right to nominate;

or to state that Pérez Companc and the Enersis group should each have an equal number of directors in Distrilec

Inversora. Enersis, Endesa-Chile and Chilectra have contested Pérez Companc’s action. Process status: Final allegations

presented, awaiting decision.

Amounts involved: A ﬁ xed amount for the case was set between US$ 180 million and US$ 200 million.

Process status : Final allegations presented, awaiting decision.

Amounts involved : A ﬁ xed amount for the case was set between US$ 180 million and US$ 200 million.

iii.

Court : Honorable resolutive commission

Process number : 577-99

Cause : Requirements of the “Fiscal Nacional Economico” against Enersis S.A. for the increase of ownership in Endesa-

Chile S.A., asserting the transaction has considerably increased the vertical integration in the electric sector, affecting

free competition.

Process status : The discussion stage has ended and the corresponding complaints have been made. The case is now

in the sentencing stage. It is important to note the Commission decided not to receive the case in trial. Additionally,

the petitions of the Fiscalía Nacional Económica have changed since the beginning of the case, limiting the request to

the inability of Enersis S.A. and Endesa Chile to have common directors and the necessity for these companies to hire

different external auditors.

Amounts involved: Undetermined.

iv.

Chilean Internal Revenue Service review on taxable income for the 1999, 2000 and 2001

tax years, and the tax trial in ﬁ rst petition for the difference of First Category Income Tax

and Reintegration of Monthly Tax Prepayments for absorbed net income in the amount of

ThCh$ 62,400, corresponding to the 1998 tax year.

Court : 25th Civil Court of Santiago

Process number : 3151-00

Cause : Complaint ﬁ led for compensation of damages by Mrs. Odette Legrand Halcartegaray against

Enersis S.A..

Process status : First petition sentencing stage

Amounts involved: ThCh$ 50,000

vi.

Court : 2nd Labor Court of Santiago

Process number : 6061-2001

Cause : Complaint ﬁ led for severance pay for years of service on December 19, 2001 by Mr. Guillermo

Calderón Ortega against Enersis S.A.

Process status : First petition reconciliation and evidence stage.

Amounts involved: ThCh$ 50,000

Restrictions.

As of December 31, 2001, the Company did not have any restrictions.

2
2

6
6

/
/

Note 22

Note 23

Guaranties.

As of December 31,2000 and 2001, the Company had letters of credit outstanding of ThCh$ 1,153, and

ThCh$ 943,967, respectively.

Sureties obtained from third parties:

As of December 31, 2000 and 2001, the Company did not have any sureties from third parties.

Foreign Currencies:

As of December 31, 2000 and 2001, foreign currency denominated assets and liabilities are as follows:

Assets.

Account

Current Assets
Cash
Time deposits
Marketable securities
Miscellaneous receivables
Current notes receivable
Current accounts receivables from related companies

Recoverable expenses
Prepaid expenses
Deferred income taxes
Other current assets

Total current assets

Property, plant and equipment
Buildings and infrastructure
Machinery and equipment
Others
Technical reappraisal
Depreciation
Total property, plant and equipment

Other assets
Investment in related companies

Goodwill

Negative Goodwill

Long-term receivables
Long-term accounts receivables from related companies

Intangibles
Accumulated amortization
Others
Total other assets
Total assets

Currency

As of December 31,

2000
ThCh$

2001
ThCh$

Ch$
US$
Ch$
Ch$
Ch$
UF
Ch$
US$
Ch$
Ch$
Ch$
Ch$
US$

Ch$
Ch$
Ch$
Ch$
Ch$

Ch$
Euros
US$
Ch$
US$
Ch$
US$
Ch$
Ch$
UF
US$
Ch$
Ch$
Ch$

36,260
-
64
15,195,856
760
976,211
23,083,631
1,716,086
7,938,830
15,379
16,081,228
5,189,591
115,962,137
186,196,033

19,992,617
1,421,538
1,010,327
31,933
(8,778,554)
13,677,861

538,698
3,242,367
-
9,371,937
737
1,038,280
70,777,158
4,581,459
11,643,727
22,859
2,805,857
2,737,864
107,385,560
214,146,503

19,992,617
1,502,357
1,312,457
31,914
(9,546,551)
13,292,794

2,166,417,946
-
213,235,002
845,927,955
7,659,738
(167,280)
(874,451)
-
4,261,023
1,731,620
463,791,116
1,382,224
(199,483)
3,163,918
3,706,329,328
3,906,203,222

1,943,625,269
584,831
408,146,725
809,541,169
11,496,143
(152,411)
(919,720)
475,381
-
-
644,499,929
1,382,224
(268,724)
14,023,809
3,832,434,625
4,059,873,922

Current liabilities :

Account

Currency

Short-term debt due to banks and
ﬁ nancial institutions

Bonds payable

Dividends payable
Accounts payable

Notes payable
Accounts payable to related companies

Accrued expenses

Withholdings

Income taxes payable

Deferred income

Other current liabilities

Total current liabilities

US$

US$
UF

Ch$
Ch$

Ch$
UF

Ch$
US$

Ch$

US$

Amount

ThCh$

2,691,842
-

644,079
461,918

2,543,058
11,697,246

186,304,852
46,964

2,093,347

74,193

12,002,124

1,419,415

31,239,871

251,218,909

Within 90 days

91 days to 1 year

2000

2001

2000

2001

Avg Rate

Amount

Avg Rate

Amount

Avg Rate Amount

Avg Rate

ThCh$

-
-

9.67
-

8,016,750

2.87

18,245,673

-
-

377,639
473,180

1,071,201
16,876,539

85,327,864
85,243

2,505,161

892,739

16,675

411,337

1,158,571

-
-

9.14
-

-
-

-
13,084,564

-
45,900,760

-
-

-
6.12

-
5.38

5.58

109,864,260

5.06

82,218,149

5.58

32,739,500

2.5

2,980,202
7,124,286

6.7
5.5

-
-

-
275,800

-
-

227,077,159

159,449,146

43,119,788

Long-term liabilities, December 31, 2001

Account

1 to 3 years

3 to 5 years

5 to 10 years

More than 10 years

Currency

Amount

ThCh$

Avg Rate

Amount

Avg Rate

Amount

Avg Rate Amount

Avg Rate

ThCh$

Debt due to banks and ﬁ nancial institutions US$

963,418,719

Accounts payable to related companies

Bonds payable

Accrued expenses

Income taxes payable

US$

Ch$

1,008,887,067

13,104,305

14,900,647

3,947,637

3.85

4.90

5.38

5.5

196,437,000

6.9 327,395,000

17,381,727

5.51

32,715,282

5.57

30,535,816

525,561

1,241,825

7.16

5.75

Total long-term liabilities

2,004,258,375

17,381,727

229,677,843

359,172,641

Long-term liabilities, December 31, 2000

1 to 3 years

3 to 5 years

5 to 10 years

More than 10 years
Avg Rate

Account

Currency

Amount

Avg Rate

Amount

Avg Rate

Amount

Avg Rate Amount

ThCh$

Debt due to banks and ﬁ nancial institutions US$

599,914,301

Accounts payable to related companies

Bonds payable

Accrued expenses

Income taxes payable

Total long-term

US$

Ch$

1,033,330,968

1,812,743

6.81

6.06

30,966,399

6.10

220,072,987

177,429,945

523,441

7.75

7.06 295,716,575

7.06

1,048,971

liabilities

1,635,058,012

30,966,399

398,026,373

296,765,546

2
2

8
8

/
/

Note 24

Note 25

Sanctions:

As of December, 2000 and 2001, there were no outstanding sanctions for the Company, directors, or management.

Subsequent events:

Situation in Argentina (unaudited)

On January 6, 2002, the Congress of the Republic of Argentina approved Law No. 25,561 entitled Public Emergency and

Reform of the Exchange Regime. The law established: the end of convertibility at parity of the

Argentine peso 1 to 1 with the US dollar, fees for public services are converted into Argentine pesos at a rate of exchange

of 1 to 1, the indexation clauses based on price indices of other countries are no longer in effect, and the Argentine

Government’s Executive is authorized to renegotiate concession contracts with public service companies.

By function of the powers conferred to the Executive by this law, an ofﬁ cial exchange rate was established at $1.40

Argentine pesos per US dollar for settled foreign commerce transactions and another rate that is “free” from restriction

for all other transactions. The “free” ﬂ oating exchange rate of the US dollar on the day the exchange market opened

was $1.70 per US dollar. (See Note 2(d)).

Subsequently, the Executive Branch agreed to convert all assets and liabilities using a conversion rate into Argentine

pesos of rate of exchange of 1 to 1, except for deposits maintained in the ﬁ nanial system.

On February 12, 2002, the Executive issued Decree No. 293, which granted authority to the Minister of Economics to

renegotiate concession contracts with public service companies. Within the public services included in the renegotiation

of the contracts, the Decree speciﬁ cally mentions the distribution and commercialization of electric energy.

Based on these factors described above and before negotiations have started with the Argentine government. The

Company estimates that net cash ﬂ ows (operating cash ﬂ ows less ﬁ nancing cash ﬂ ows) for 2002 will decrease by

approximately US$ 112,000,000, from the total of its Latin American operations which represented an 18.7% of total

cash ﬂ ows during 2001.

The Company plans to mitigate this reduction in net cash ﬂ ows through the renegotiation of concession contracts with

the Argentine Government. The economic criteria of these negotiations have been deﬁ ned in the decree, and it is the

Company’s belief that it will be possible to recouperate the diminished net cash ﬂ ows in a reasonable period of time.

Despite the difﬁ cult economic postion present in Argentina as described above during the months of January and

February 2002, the Company’s subsidiaries and afﬁ liates in Argentina have continued to operate regularly in the electric

sector and continued to service all contractual client demands.

At the date of issuance of these ﬁ nancial statements and considering the instable political and economic situation in

Argentina, there is uncertainty regarding the correct application of transactions at the ofﬁ cial or “free” ﬂ oating exchange

rate. Thus, it is not possible to determine the current extent of the effects of the situation in Argentina with certainty,

or the future changes that could result.

b. Merger of Subsidiaries

The company is in the process of merging its subsidiaries Compañía Americana de Multiservicios Ltda. and Compañía

Americana de Multiservicios Uno Ltda. so that the ﬁ rst absorbs the latter, effective as of January 1, 2002. At the date of

issuance of these ﬁ nancial statements the public deed was in the process of being signed.

Dissolution of Subsidiaries

According to the minutes of the Extraordinary General Shareholders’ Meeting held on January 28, 2002, the following

companies have been dissolved: Empresa Eléctrica de Panamá S.A., Interocean Development Inc., Sociedad Panameña

de Electricidad S.A. and Estelmar Holding S.A. The assets and liabilities of these companies have been proportionally

distributed according to the shareholder participation of each one of the partners.

Note 26

Environment:

As the Company is a holding company and does not have any operations, there are no environmental disclosures required.

ENRIQUE GARCIA ALVAREZ

Chief Executive Ofﬁ cer

JUAN CARLO WIECZOREK C.

General Account

JUAN I. DOMINGUEZ ARTEAGA

Adjunct Chief Executive Ofﬁ cer

2
2

3
3

0
0

/
/

Enersis S.A. Relevant Facts

Provisional Dividend

The Board of Directors of Enersis S.A., as of February 2, 2001, agreed upon unanimous vote of its members not to distribute,

in February 2001, a provisional dividend charged to the results of December 2000, due to not satisfying the requirements

provided for such action in the Dividend Policy of the Company.

Deﬁ nitive Dividend

As of April 2, 2001, the Ordinary Stockholders’ Meeting of Enersis S.A. agreed the distribution of the deﬁ nitive minimum

obligatory dividend, charged to the proﬁ t of the period that ended on December 31, 2000, reaching $1.806 per share, which

totals M$14,976,820.

OPAs

On April 2, 2001, the Ordinary Stockholders’ Meeting of Enersis S.A. agrees to have recourse to the provision contained in the

10th transitory article of Law No. 19,705, of December 20, 2000, that “Regulates the Tender Offer for Shares (POPS, OPA in

Spanish), and Establishes Corporate Government Regime”, so that the current Company controller may exercise the option to

freely alienate the shares issued by Enersis S.A., even though the price is substantially higher than the market price, privided

that such alienation is performed in the next three years, counted from day 1 of the month following the month in which

such law was published. Likewise, the already mentioned Stockholders’ Meeting agrees to carry all necessary agreements to

duly comply with and carry out the aforementioned resolution.

Provisional dividend

The Board of Directors of Enersis S.A., as of April 27, 2001, agrees upon unanimous vote of its present members not to distribute,

in May 2001, a provisional dividend charged to the results of March 2001, according to the policy in force on this matter, due to

not satisfying the requirements provided for such action in the dividend Policy of the Company.