Enel Americas
Annual Report 2016

Plain-text annual report

Enel Américas Annual Report t r o p e R l a u n n A s a c i r é m A l e n E Santiago Stock Exchange ENELAM New York Stock Exchange ENIA Enel Américas was established initially under the name Compañía Chilena Metropolitana de Distribucion Electrica S.A., and on December 1, 2016 the company changed its name to Enel Américas S.A. The Company’s paid-in capital on December 31, 2016 reached $4,621,809,178 thousand, and was represented by 58,324,975,387 shares. Its shares are traded in the Chilean stock exchanges and in the New York Stock Exchange in the form of American Depositary Receipts (ADR). The main business of the Company is the operation, development, generation, distribution, transmission, transformation and/ or sale of energy in any of its forms or nature, directly of through other companies, as well as providing engineering advisory in the country and abroad, and also the management of its investment in subsidiaries and associate companies. Total assets amounts to $11,281,555,506 thousand on December 31, 2016. Enel Américas controls and manages a group of companies that operates in the electricity markets in four countries in Latin America (Argentina, Brazil, Colombia and Peru). In 2016, net income attributable to the controlling company reached $383,060 million and operational income was $1,217,155 million. By the end of 2016, the Company employed 10,324 people through its subsidiaries companies in South America.  Enel Américas Annual Report 2016  Table of Contents > Letter from the Chairman > Open Power > 2016 Milestones > Main Financial and Operational Indicators > Identification of the Company and Constitutive Documents > Ownership and Control > Management > Human Resources > Exchange Transactions > Dividends > Investment and Financing Policy for 2016 > Company’s Business > Investments and Financial Activities > Risk Factors > Company Reorganization > Regulatory Framework of the Electricity Industry > Description of the Business by Country > Ownership Structure > Significant Events of the Company > Identification of Subsidiaries and Associates Companies > Responsibility Statement > Consolidated Financial Statement > Management’s Analysis of Consolidated Financial Statements > Summarized Financial Statements of the Subsidiaries 4 10 12 16 20 26 32 52 62 68 74 78 90 102 120 124 156 182 188 238 254 258 548 590  Letter from the Chairman Dear shareholders, You are holding the Annual Report and Financial Statements of Enel Américas S.A., which corresponds to the period ended on December 31, 2016. Enel Américas runs the Corporate Reorganization electricity generation, transmission and distribution In 2015 we started a corporate reorganziation process of businesses in four countries in Latin America (Argentina, the former Enersis S.A., whose purposes were to simplify Brazil, Peru and Colombia) through its subsidiaries. the corporate structure of the Company and to separate the assets in Chile from the rest of the Region. It was First of all, I would like to thank the Members of the Board of a long and extremely complex process, which involved Enel Américas, whom in April 2016 once again gave me their several jurisdictions. trust and responsibility to chair the Company. The exercise 2016 has been hard and carried big changes, because the In 2016, as Chairman of the Company I had the electricity business worldwide was highly dynamic and responsibility to lead the second stage of the corporate showed increasing competition and high level of demand. reorganziation process, whereby at the Extraordinary Within this context, I would like to acknowledge this Shareholders’ Meeting held on September 28, 2016, the gratitude to the professionals, executives and technicians former Enersis Américas, Endesa Américas and Chilectra working in the different subsidiaries of the Company, as well Américas merged, by incorporation, into Enersis Américas. as to Luca D’Agnese, General Manager of Enel Américas, Additionally, that same day the shareholders of the who has leaded successfully the great teams of this resulting company, aware of the value that meant to be part Company to face the challenges of this year. of an important group worldwide such as Enel, approved Today, after the successful ending of the corporate whose modification was performed on December 1st, 2016, reorganziation process that began in 2015, new challenges after the merger process was completed. the name change of Enersis Américas to Enel Américas, are added. We have to consolidate the incorporation of the distribution company CELG to the business in Brazil, we Upon these changes, on December 1st, 2016, Enel need to reach the efficiencies set for the Company in the Américas began trading at the New York Stock Exchange. Strategic Plan for 2019 and also to capitalize the business The Company participated in the so-called “ring the bell”, in Argentina after the enactment of the new regulatory recognition that only few companies have had, and of framework. We will try to reach the best results for our which we are very proud. shareholders while facing these challenges. Looking the year with perspective, I firmly believe that the work carried out, and the alternatives showed to those shareholders that didn’t choose to continue with us as part of this new company, the IPO and the Withdrawal Right, constituted not only a transparent, fair and entirely 4 Enel Américas Annual Report 2016 adequate with regards to legality process, but also a We think that this acquisition represents an excellent model. As you know, the amount paid to those currently investment for the Company in a country where we have former shareholders, whom decided to make use of some seen great growth potential for the years to come. of these two mechanisms, was far below the parameters defined by the Company, thus showing that the proposed reorganziation process was completely positive for Enel Américas. Today we are the most important private electricity company in the Region, and to keep that position we see great possibilities of growth for our generation and distribution businesses, which we will continue to achive not only through our permanent aim at efficiency, but also through our active search for new acquisition opportunities. Acquisition of CELG in Brazil During the second half of 2016, through Enel Brasil, we increased our share capital of the electricity distribution company Celg Distribuição S.A. (“CELG”) to 94.8%. This company operates in the Brazilian state of Goiás, and covers a territory of 337 thousand square kilometers, and the standing concession is in force until 2045 for 2.9 million customers. With this acquisition, the client base of Enel Américas in Brazil increased from 7 to 10 million. 5 New Regulatory Framework in Argentina Efficiencies and Results of the Period Dear shareholders, another key point that we have defined as fundamental from 2016 onwards, is the efficiencies In Argentina, there was an important regulatory framework plan we are boosting in order to increase the company’s change in 2016 for the electricity industry, which carried out return. In 2016 we obtained savings of 160 million dollars, an opportunity for our business. After a period where prices result that exceeded preliminary estimates. These savings and tariffs were frozen, in February 2016 a new tariff regime were comprised by 8% reduction in the distribution began to operate, with which consumption subsidies were business, equivalent to 77 million dollars, while in the reduced. generation business the reduction was 10%, or 24 million dollars. Nevertheless, we continue our work to search We have developed an ambitious working plan with an for efficiencies. We remind you that, as a Company, investment of 900 million dollars between 2017 and 2019, we committed with the Strategic Plan introduced in in accordance with our Strategic Plan. We will look for November 2016, to save 358 million dollars in 2019. mechanisms to reduce energy losses and improve our facilities, thus significantly increase our quality of service, With regards to the Financial Results of 2016, and within and always thinking of our customers. an extremely volatile economic context in the Region, I would like to highlight the financial strength demonstrated by Enel Américas whereby showing very positive results to its shareholders in line with the objectives announced last year. In 2016 the Company’s net EBITDA from extraordinary effects increased more than 16% compared to 2015. In terms of net results, it reached US$844 million, which accounted net from extraordinary effects, would have assumed nearly 24% growth from the previous year. 6 Enel Américas Annual Report 2016 Additionally, the robustness of the cash generated by the Company has allowed the maintenance of attractive dividends policy of the Company in 50%, meaning a distribution of approximately 192,530 million pesos accounted against annual net profits. I would like to finish this letter by expressing my gratitude once again to the Directors, executives and employees of Enel Américas for their huge dedication and effort carried out in 2016, and also to emphasize our commitment to become more efficient and more useful for the communities we serve. Francisco de Borja Acha Besga Chairman 7 Edificio Corporativo Santa Rosa 76 Lanzamiento Cambio de Marca. 30 Noviembre 2016 ENEL AMÉRICAS IS In the last decades, Enel has delivered energy, innovation and progress to the world. The Company has touched the lives of hundred thousand people changing the way they relate with the energy. Today, understanding that the world is not the same and that the way to do things has changed, Enel Américas takes the responsibility to lead the changes of the energy sector to create a new world, sustainable and with the support of people. This change of philosophy is called Open Power and demands to Enel Américas and its subsidiaries in Peru, Colombia, Brazil and Argentina to be open. Today, the challenge is to open the energy to more people, partners and technologies. It means to open it to new uses and ways to manage energy. Open Power seeks to create a shared culture with a long-term vision, a mission defined in five points and four values that define the DNA of the Enel Group. MISSION Open energy to more people to ne w technologies O pen energy O ffer p e o ple n e w w a y s to m a n a g e e n erg y o m p a h e C e k p e n t h t o m o r e s t a O y n o l d e r s r g y O p e n e n e t o n e w a p p l i i o n s t a c VISION Open Power to solve relevant global challenges. VALUES Responsibility Each one of us is responsible for the success of the group, at every level. We place our energy at the service of people to improve their lives and make them more sustainable. Innovation We live and work curiously, we make efforts to go beyond the ordinary and we overcome our fears, in order to open the energy to new uses, technologies and people. We learn from our mistakes and from our successes. Trust We act in a skilled, honest and transparent way, in order to gain our colleagues, clients and stakeholders’ confidence, and we also value the individual differences. At the same time, we trust in their ability to create and share value. Proactivity We take care of our job in first person. We interpret permanently the scenarios and global challenges to anticipate changes, thus redefining our priorities when needed. MISSION to more people Open energy to ne w technologies O pen energy w a y s to m a n a g e e n erg y O ffer p e o ple n e w o m p e n t h k t o m o r e s t a r g y O p e n e n e t o n e w a p p l i e C O a e p h y n o l d e r s i o n s t a c VISION Open Power to solve relevant global challenges. VALUES Responsibility Each one of us is responsible for the success of the group, at every level. We place our energy at the service of people to improve their lives and make them more sustainable. Innovation We live and work curiously, we make efforts to go beyond the ordinary and we overcome our fears, in order to open the energy to new uses, technologies and people. We learn from our mistakes and from our successes. Trust We act in a skilled, honest and transparent way, in order to gain our colleagues, clients and stakeholders’ confidence, and we also value the individual differences. At the same time, we trust in their ability to create and share value. Proactivity We take care of our job in first person. We interpret permanently the scenarios and global challenges to anticipate changes, thus redefining our priorities when needed.  Milestones in 2016 MARCH Emgesa and Codensa reached the energy consumption reduction of their offices by nearly 50% During the first week of the Savings Mode program’s implementation, Emgesa and Codensa reached the energy consumption reduction in the work places by nearly 50%. This decrease was accomplished due to different initiatives carried out in the companies, among which stands out the one that consisted on completely turn off the lights of every work place from 6 pm, with the exception of those not allowed by the operation of the Companies. Fitch Ratings assigns “BBB” international scale rating and “AA” national scale rating to Enel Américas On March 2, 2016, Fitch Ratings rated Enersis Américas (currently Enel Américas) at international scale rating “BBB and “AA” at national scale rating. Outlook is stable. The rating was ratified later on, on September 28 and November 30, 2016. APRIL Shareholders of Enel Américas appointed the new Board of Directors of the Company Shareholders of Enel Américas S.A. at the Ordinary Shareholders Meeting appointed the new Board of Directors of the Company, comprised by Messrs. Borja Acha, José Antonio Vargas, Livio Gallo, Enrico Viale, Hernán Somerville, Patricio Gómez Sabaini and Domingo Cruzat. The Directors of Enel Américas appointed Mr. Borja Acha as Chairman of the Board. Also, the independent directors Patricio Gómez Sabaini, Domingo Cruzat and Hernán Somerville formed the Directors’ Committee; the latter was appointed Chairman of the Directors’ Committee. Feller Rate assigns “AA-” national scale rating to Enel Américas On April 4, 2016, Feller Rate rated Enersis Américas (currently Enel Américas) “AA-” at national scale rating with stable outlook. The rating was ratified later on July 7, 2016. Colece in Brazil receives the Golden Helmet Award Enel Distribução Ceará was awarded for its investment in work safety practices for MSA – The Safety Company. The objective of this acknowledgement is to promote professionals and companies to carry out actions to prevent workplace accidents, including the use of industrial helmets. In Colombia, Codensa and Terpel subscribed an agreement to develop electric charging points in gas stations Codensa and Terpel subscribed an agreement of intent to jointly work for the future installation of electric charging points at Terpel’s gas stations. The objective of this initiative is to increase the opportunity for mass distribution of electric mobility in segments such as taxis, private vehicles, corporate fleet and governmental fleet enabling the recharge of electric vehicles in public places in the medium term in different cities of the country. The target is to begin in Bogota, and the project will expand afterwards to other regions. JANUARY El Quimbo restarts operations On January 8, Emgesa was notified of the ruling issued by the Third Criminal Court of Neiva, which determined that, on a transitional basis and effective immediately, the hydroelectric power plant El Quimbo may restart operations. Pursuant to this order, on January 10, 2016, Emgesa carried out a work plan to comply with the ruling and started the generation of the energy supply. Enel Distribución Perú supplies energy to the Jorge Chávez International Airport On January 1st, 2016, for a six-year period, Enel Distribución Perú began supplying energy to the Jorge Chávez International Airport, after being awarded the good pro of the private tender hosted by Lima Airport Partners (LAP). The electricity company supplies energy with a capacity of 8 MW, and is estimated to increase to 11 MW in 2021. Currently, the annual consumption of the airport is 37 GWh. FEBRUARY Standard & Poor’s assigns “BBB” rating to Enel Américas On January 3, 2016, Standard & Poor’s rated Enersis Américas (currently Enel Américas) “BBB” with stable outlook at international scale rating, being “investment grade. “ This rating was ratified later on February 23 and December 1st, 2016. Peru: 11 kilometers of new electricity grids in Pisquillo and Tiroler The towns of Pisquillo (Huaral) and Tiroler (Huacho) now have electricity grids built by Enel Distribución Perú, thus contributing to promote progress and development to every neighbor in this area of Norte Chico. These grids will meet the demand of 4MW for agribusiness customers of the area, which will represent important production costs savings for them, while disregarding important oil consumption, thus contributing with the environmental sustainability. Enel Generación Perú was awarded a hydroelectric project in renewables energy tender offer Enel Generación Perú was awarded an energy supply contract for a 20-year period with the HER project (Hydro Energy Recovery) Huampaní, part of the Fourth Energy Supply Tender Offer with Renewable Energy Resources. The project includes the installation of two turbines over the discharge chute of the power plant, with total capacity of 0.7 MW. 12 Enel Américas Annual Report 2016 JULY Enel Generación Perú sold to Conelsur its transmission assets for US$60 million Enel Generación Perú and its subsidiary Chinango, companies that belong to the Enel Group in Peru, sold the transmission lines of 220 kV and 60 kV to Conelsur, company associated with the Chilean company owned by the Canadian Transelec Rentas Holding S.A., entering into Peruvian market through this operation. The assets acquisition comprises 21 transmission lines of 220 kV and 60 kV, with a total of 650 kilometers long. AUGUST Enel Américas calls an Extraordinary Shareholders Meeting The Board of Directors of Enel Américas S.A. unanimously agreed to call an Extraordinary Shareholders Meeting for the approval of the merger of Endesa Américas and Chilectra Américas’ assets into Enersis Américas. Additionally, it was decided to put to vote the name and business name change of Enersis Américas S.A. for Enel Américas S.A. MAY The Board of Directors of Enel Américas agreed to start the merger process of Endesa Américas and Chilectra Américas into Enel Américas On May 6, the Directors of the Company unanimous approved the formal start of the merger through absorption process, with which Enel Américas incorporated Endesa Américas and Chilectra Américas. In addition, this Board of Directors’ meeting appointed Mr. Rafael Malla Osorio as independent expert of the Company, and also appointed Banco Itaú as independent evaluator. JUNE Enel Generación Perú will supply energy to Furukawa Corporation The signing of the contract comprises capacity of up to 3.65 MW for a 10-year period. Furukawa is a corporate group whose core business is to provide glass for the construction industry, specifically for the industrial, commercial and service areas, and has four lines of business: distribution, building, industrial aluminum and decoration. Colece in Brazil receives the Abradee Award 2016 For the sixth consecutive time, Enel Distribução Ceará of Brazil was awarded the best energy distribution company in Brazil by Abradee, the Brazilian Association of Electrical Energy Distribution. At the 18th version of the Abradee Award, the Company also won first place in the Corporate Social Responsibility category. Codensa launches the first hackathon of the energy sector most important of Colombia “CHALLENGE – E Codensa” was the first virtual Hackathon of the energy sector in the country, which convened talents that developed hardware or software solutions to contribute with the energy efficiency. Seventy-four proposals were received, fifteen teams were selected, and only one was the winner of the main prize of 20 million Colombian pesos for his proposal of smart lighting system proposal. Enel Américas determined a new price for the IPO The Board of Directors of Enel Américas at the session held on August 31, 2016 agreed to modify permanently the price of the IPO over Endesa Américas, which was announced in the Shareholders Meeting of last December 18, and the new price was fixed at $300 pesos per share. Likewise, the Board of Directors agreed that the date to launch the IPO is September 13, 2016. Codensa was awarded with the Andesco award of Corporate Social Responsibility in the category Best Corporate Governance Environment for public services companies and communications for its initiative and management of the Customer Ombudsman Office In the context of the XVIII Andesco Congress of Public Services, TIC and TV, Codensa was awarded with the Best Corporate Governance Environment for public services companies and communications award. This Andesco award has recognized for eleven years the effort carried out by Colombian companies in the Corporate Social Responsibility field, and it was granted to the company for its program Customer Ombudsman, first and unique program voluntarily performed by a public services company in Colombia. 13 Codensa created an innovative monitoring service center to optimize customer service Codensa presented an innovative Monitoring Service Center, space that permits the remote monitoring and in real time the behavior of every customer service channel that the company has, thus enabling the creation of contingency processes to relieve them and improve response times. OCTOBER Enel Group changes the names of its companies Edegel, Eepsa and Edelnor in Peru Last October 25, the distribution company Edelnor changed its name to Enel Distribución Perú. The Company supplies energy to nearly 1,4 million clients in Lima, equivalent to 20% market share. Also, Enel Generación Perú and Enel Generación Piura are the new names of Edegel and Eepsa respectively. Both generation companies of Enel represent a total installed capacity of 1,940 MW. Emgesa enters the Derivex energy derivatives market Emgesa began its participation in the Derivex market while opening its purchase and sales orders of energy transactions at the Energy Exchange. The Derivex market is a system where purchase and sales transactions over energy derivatives volumes and prices are performed, while negotiating a price at a fixed amount, to be delivered at a specified short-term period. SEPTEMBER The Extraordinary Shareholders’ Meeting of Enersis Américas S.A. approved the merger y name change to Enel Américas S.A. On September 28, 2016 the shareholders of the former Enersis Américas S.A. approved at the Extraordinary Shareholders Meeting the merger by absorption of Endesa Américas and Chilectra Américas to Enersis Américas. At the same shareholders’ meeting it was approved the name change of Enersis Américas S.A. to Enel Américas S.A. Enel Distribución Perú, energy leader in service quality Enel Distribución Perú leads the service quality ranking for the third consecutive year in accordance with the last “Yearly Statistics on Service Quality for 2015” report prepared by the Energy and Mining Investment Supervisor Organization (Osinergmin). This study evaluates the performance of the fourteen Peruvian energy distribution companies to determine the service quality, in accordance with the average number of power outages and their duration. Melhores da Dinheiro Award, IstoÈ Dinheiro Magazine For the second consecutive year, Enel Brasil leaded the energy sector at the As Melhores da Dinheiro award, published by IstoÈ Dinheiro magazine. In addition of leading the electricity industry, Enel Brasil was recognized in the Corporate Social Responsibilities, Financial Sustainability, Corporate Governance and Innovation and Quality categories, and ranked second in Human Resources category. The Group ranked 63 at the general ranking that includes the companies of the industries, and Enel Brasil ranked 20 among the largest groups of participants. Pilot plan for the Ecological Restoration of El Quimbo More than 22,000 new trees of different native species of tropical dry forest started to grow successfully in the area covered by the Pilot Plan for the Ecological Restoration of El Quimbo Hydroelectric Power Plant. Codensa enters smart metering era Codensa launched the largest smart metering project in the country, representing the first step for the digitization of its energy distribution system. For the first time a Colombian energy company enforces a project of such size, which will benefit the city and municipalities at the forefront of these technologies uses at the service of customers. 14 Enel Américas Annual Report 2016 Edesur inaugurated the works for the repowering of Caballito substation With an investment of $110 million Argentine pesos, the distribution company Edesur changed two 40 MVA transformers for two 80 MVA transformers, thus doubling the installed capacity, added 10 new feeders and 16 new medium tension power lines. Additionally, the internal equipment was renewed for one with improved technology and a new board with two sections of 13.2 KV (high voltage) to feed that station and will provide more reliability to the grid, which will benefit nearly 124 thousand customers in the west area of Buenos Aires. NOVEMBER In Brazil, Ampla and Coelce changed their names to Enel On November 8, 2016 the distribution companies of the Enel Group in Brazil, Ampla and Coelce, which operate in Rio de Janeiro and Ceará respectively, changed their names to Enel Distribução Rio and Enel Distribução Ceará. In addition, the Brazilian company for energy solutions of Enel, Pratil, became Enel Soluções. These name changes represent the new identity, philosophy and global positioning of the Enel Group. Enel Américas presented the best offer for the bidding process for the Brazilian distribution company CELG Enel Américas, through its subsidiary Enel Brasil, presented the best financial offer for the acquisition of approximately 94.8% of Celg Distribução share capital, company that operates in the Brazilian region of Goiás, during a public tender organized by the Brazilian government through the national development bank BNDES. The financial offer was 2,187 million Brazilian reais, equivalent to approximately USD$ 640 million. Enel Distribución Perú inaugurated the Malvinas substation Enel Distribución Perú inaugurated the Electric Transmission Substation (SET) Malvinas, located in downtown Lima. In 2016 Emgesa invested more than 94 billion Colombian pesos in the modernization and maintenance of its thermal generation power plants With an investment of more than 94 billon Colombian pesos, Emgesa, company part of the Enel Group, performed the maintenance and modernization works in the generation units of the thermal power plants Cartagena and Termozipa during the second half of the year, plants that have the capacity to generate energy jointly, at maximum production, equivalent to 5% of the total demand of the country at an average month. The modernizations performed in the thermal units will ease the guarantee of the operations’ reliability for 20 additional years and the permanent energy supply for Colombia. In addition, any type of failure will be minimized, thus enabling to perform scheduled maintenances and also will be friendlier with the environment, thanks to the implementation of control systems. In Argentina, the new high and medium voltage control center was inaugurated As part of the Investment Plan carried out by Edesur for 2016, that amounted to 2,700 million Argentine pesos, and with the objective of improving the quality of service for customers, in December 2016 the New High and Medium Voltage Control Center at Edesur’s headquarters, at Montserrat neighborhood, Buenos Aires, started operations. The new facilities in the area will speed up the working times to solve failures that may take place in the electricity grid and also will decrease response times. DECEMBER The merger and name change of Enersis Américas S.A. to Enel Américas S.A. took place On December 1, 2016 the merger through absorption of Endesa Américas and Chilectra Américas into Enersis Américas was formalized. That same day and as agreed at the Extraordinary Shareholders’ Meeting held on September 28, 2016, Enersis Américas changed its name to Enel Américas S.A. Enel Américas opened the trading session at the New York stock exchange. On December 2, 2016, the CEO of Enel, Francesco Starace and the General Manager of Enel Américas, Luca D’Agnese, started the trading opening ceremony of the largest stock exchange in the world, the New York Stock Exchange. With this milestone, the corporate reorganization process that lasted almost one year and a half came to an end, and allowed the division of the operations developed in Chile from those performed in the rest of the region. Moody´s reaffirmed the rating of Enel Américas at “Baa3” Moody´s reviewed and reaffirmed the corporate rating of Enel Américas on December 30, 2016, and assigned “Baa3” rating. Outlook is stable. Enel Américas S.A performed the exchange of shares On December 29 and through a Significant Event, Enel Américas informed that the exchange of shares became effective to the former shareholders of Chilectra Américas and Endesa Américas. As agreed, for each share of Chilectra Américas, four shares of Enel Américas were handed over. Meanwhile, shareholders of Endesa Américas obtained, 2.8 shares of Enel Américas S.A. for each share. Edesur in Argentina performed improvements at Quilmes Substation In December, Edesur inaugurated Quilmes substation. The work was the installation of a new 40 MVA transformer that increases installed capacity from 120 to 160 MVA, the installation of 6 new feeding wires and the 35 kilometers of Medium Voltage grid. Additionally, all the internal equipment was renewed incorporating additional technology. As such, and with an investment of 133 million Argentine pesos, the quality of service for nearly 130 thousand customers will be improved in the south area of Buenos Aires. 15 Main Financial and Operating Indicators 17 Total Assets As of December 31 of each year (figures in million nominal pesos)(1) 2011 13,733,871 2014 15,921,322 2013 15,177,664 2015 15,449,154 2012 13,317,834 2016 11.281.556 Total Current Liabilities 6,837,717 6,354,065 6,670,199 7,642,104 7,259,346 6.006.307 Operating Revenues 6,534,880 6,577,667 6,264,446 7,253,876 5,301,440 5,197,286 Ebitda Net Income (2) Liquidity Ratio Debt Ratio (3) 2,127,368 375,471 1,982,924 377,351 2,251,489 658,514 2,300,020 610,158 1,615,112 661,587 1.643.369 383,060 1.03 0.99 0.99 0.91 1.31 0.78 1.23 0.92 1.01 0.65 1.25 1.14 Generation Business 2011 2012 2013 2014 2015 2016 As of December 31 of each year ARGENTINA Number of employees Number of generating units Installed capacity (MW) Electricity generated (GWh) Energy sales (GWh) Number of employees Number of generating units Installed capacity (MW) Electricity generated (GWh) Energy sales (GWh) BRAZIL COLOMBIA Number of employees Number of generating units Installed capacity (MW) Electricity generated (GWh) Energy sales (GWh) Number of employees Number of generating units Installed capacity (MW) Electricity generated (GWh) Energy sales (GWh) Number of employees Number of generating units Installed capacity (MW) Electricity generated (GWh) Energy sales (GWh) PERU TOTAL 473 20 3,652 10,713 11,381 202 13 987 4,129 6,828 498 30 2,914 12,051 15,112 247 25 1,668 8,980 9,450 1,420 88 9,221 35,873 42,771 501 20 3,652 11,207 11,852 197 13 987 5,183 7,291 517 30 2,914 13,251 16,304 263 25 1,657 8,570 9,587 1,478 88 9,210 38,211 45,034 628 25 4,522 14,422 16,549 200 13 987 4,992 6,826 563 29 2,925 12,748 16,090 316 27 1,842 8,489 9,497 1,707 94 10,276 40,651 48,962 645 25 4,522 14,390 15,276 208 13 987 5,225 7,108 589 32 3,059 13,559 15,773 324 27 1,949 9,062 9,916 1,766 97 10,517 42,236 48,073 657 25 4,522 15,204 15,770 194 13 987 4,398 6,541 484 36 3,459 13,705 16,886 292 27 1,983 8,801 9,283 1,627 101 10,951 42,108 48,480 632 29 4,537 13,124 13,312 185 13 992 3,665 9,448 551 36 3,509 14,952 18,015 310 27 1,977 8,698 9,800 1,678 105 11,014 40,439 50,575 18 Enel Américas Annual Report 2016 Distribution Business 2011 2012 2013 2014 2015 2016 As of December 31 of each year ARGENTINA Energy sales (GWh)(4) Number of customers Energy losses Number of employees Customers / employees Energy sales (GWh)(4) Number of customers Energy losses Number of employees Customers / employees Energy sales (GWh) (4) Number of customers Energy losses Number of employees Customers / employees Energy sales (GWh)(4) Number of customers Energy losses Number of employees Customers / employees Energy sales (GWh)(4) Number of customers Energy losses Number of employees Customers / employees BRAZIL COLOMBIA PERU Total 17,233 2,388,605 10.50% 2,849 838 17,338 2,388,675 10.6% 2,948 810 18,137 2,444,013 10.80% 3,320 736 17,972 2,464,117 10.75% 3,823 645 18,492 2,479,559 12.30% 4,142 596 18,493 2,504,558 12.04% 4,290 584 19,193 5,867,888 16.20% 2,496 2,351 20,694 6,050,522 16.30% 2,382 2,540 21,767 6,301,582 16.10% 2,370 2,659 22,842 6,500,500 16.42% 2,415 2,732 22,776 6,754,327 17.30% 2,348 2,877 22,809 6,943,600 16.10% 2,244 3,237 12,857 2,616,909 8.10% 1,101 2,377 13,364 2,712,987 7.50% 1,127 2,407 13,342 2,686,919 7.00% 1,036 2,594 13,660 2,772,376 7.19% 1,043 2,658 13,946 2,865,159 7.30% 947 2,771 13,632 3,248,447 7.10% 1,337 2,430 6,572 1,144,034 8.20% 550 2,080 6,863 1,203,061 8.20% 607 1,982 7,045 1,254,624 7.90% 616 2,037 7,338 1,293,503 7.95% 619 2,090 7,624 1,336,610 8.30% 570 2,191 7,780 1,367,044 7.80% 620 2,216 55,855 12,017,436 10.75% 6,996 1,718 58,259 12,355,245 10.65% 7,064 1,749 60,291 12,687,138 10.45% 7,342 1,728 61,812 13,030,496 10.58% 7,900 1,649 62,838 13,435,655 11.3% 8,007 1,678 62,714 14,063,649 10.76% 8,491 1,656 (1) Accounting figures pursuant to the instructions and regulations issued by the SVS. (2) Net Results attributable to the dominant company. (3) Total Liabilities/Equity plus Minority Interest. (4) Due to changes in the criteria, non-billable consumptions (CNF) are not included in 2014, 2015 and 2016. 19 20 Enel Américas Annual Report 2016 Identification of the Company and Constitutive Documents 21 22 Enel Américas Annual Report 2016  Identification of the Company Name or company name Domicile Type of company Tax ID Address Postal code Phones P.O. Box Securities Registration number External Auditors Subscribed and paid-in capital (Th$) Web site Email Investor Relations phone Ticker in Chilean stock exchanges Ticker in New York stock exchange ADR’s Custodian Bank ADR’s Depositary Bank National credit rating agencies International credit rating agencies Enel Américas S.A.(1) Santiago of Chile, being able to establish agencies or subsidiaries in other parts of the country or abroad Publicly traded company 94,271,000-3 Santa Rosa Nº 76, Santiago, Chile 833-009 SANTIAGO (56-2) 2353 4400 - (56-2) 2 378 4400 1557, Santiago Nº 175 Ernst & Young 4,621,809,178 www.enelamericas.com comunicacion.enelchile@enel.com (56-2) 2353 4682 ENELAM ENIA Banco Santander Chile Citibank N.A. Feller Rate, Fitch Chile Clasificadora de Riesgo Limitada Fitch Ratings, Moody´s and Standard & Poor´s (1) The Extraordinary Shareholders’ Meeting held on September 28, 2016 agreed the change of the company name from Enersis Américas to Enel Américas S.A., effective on December 1, 2016. 23  Constituent Documents The company that gave rise to Enel Américas S.A. stage of the corporate reorganization plan denominated was formed initially under the name Compañía Chilena “The Merger” was approved. Therefore, Enersis Américas Metropolitana de Distribución Eléctrica S.A. by public S.A., the absorbing entity, acquired all the assets and deed dated June 19, 1981, granted by the notary Patricio liabilities of the subsidiaries Chilectra Américas S.A. and Zaldívar Mackenna in Santiago, and modified by public Endesa Américas S.A., succeeding them in every right and deed on July 13 the same year and in the same notary. The obligation and incorporating to Enersis Américas S.A. the company’s incorporation was authorized and its bylaws entirety of shareholders and equity of Chilectra Américas approved by Resolution 409-S of July 17, 1981 of the S.A. and Endesa Américas S.A. Securities and Insurance Commission (SVS). The extract of the incorporation authorization and approval of the bylaws In addition, it was agreed that after the Merger, on was registered in the Santiago Trade Registry on page December 1, 2016, Enersis Américas S.A would change 13,099 Nº7,269 for the year 1981, and were published in its name to “Enel Américas S.A.”. Such meeting was the Official Gazette of July 23, 1981. The bylaws of Enel formalized in a public deed of October 18, 2016, granted Américas have undergone a number of modifications ever in the Notary Iván Torrealba Acevedo, whose excerpt was since. registered on pages 79,974 N°43,179 of the Commerce Registry in 2016 of the Property Register in Santiago and On August 1, 1988, the company’s name was changed to was published in the Official Journal on October 29, 2016. Enersis S.A. In April 2015 Enersis S.A. started a corporate reorganization process. As part of this process, on December 18 2015 the Company’s Extraordinary Shareholders Meeting was held, where shareholders of Enersis S.A. approved the first stage of the reorganization process called “the Division”. Therefore, the division of the Company was approved, and the entity “Enersis Chile S.A.” was created, which represented the unique vehicle for the control of generation and distribution assets that the Group owns in Chile and, the former Enersis S.A. was named “Enersis Américas S.A.”, which controls the businesses in the other countries of the region (Argentina, Peru, Brazil and Colombia). The Division was formalized in a public deed of January 8, 2016, granted in the Notary Iván Torrealba Acevedo in Santiago, whose excerpt was registered on pages 4013 N° 2441 of the Commerce Registry in 2016 of the Property Register in Santiago and was published in the Official Journal on January 22, 2016. A supplementary extract was registered on pages 10.743 N° 6.073 in the same Registry, year and the Property Register and was published in the Official Journal on February 10, 2016. The Extraordinary Shareholders Meetings of Enersis Américas S.A. and its subsidiaries Endesa Américas S.A. and Chilectra Américas S.A. were held on September 28, 2016. Among other topics, at these meetings the second 24 Enel Américas Annual Report 2016  Corporate Purpose The corporate purpose of the Company is stated in the In addition to its main objects and always acting within the limits statutory modification approved by the Extraordinary established by the Investment and Financing Policy approved Shareholders Meeting held on October 28, 2016, formalized by the Shareholders Meeting, the Company may invest in: in a public deed of October 18, 2016, granted in the Notary Iván Torrealba Acevedo in Santiago, whose excerpt was First. The acquisition, operation, construction, rental, registered on pages 79,974 N°43,179, of the Commerce administration, intermediation, trading and disposal of all kinds Registry in 2016 of the Property Register in Santiago and was of movable and immovable assets, either directly or through published in the Official Journal on October 29, 2016. subsidiaries or associate companies. The Company’s purpose is to perform in the country or Second. All kinds of financial assets, including shares, bonds abroad the exploration, development, operation, generation, and debentures, commercial paper and in general all kinds of distribution, transmission, transformation and/ or sales titles or securities and company contributions, either directly or of energy in any of its forms and nature, or directly or through subsidiaries or associate companies. through intermediate companies, likewise, and also telecommunications activities and the provision of engineering consultancy in the country and abroad. It may also invest and manage its subsidiaries and associate companies, whether generators, transmitters, distributors or traders of electricity or whose business is any of the following: (i) energy, in any of its forms or nature, (ii) the supply of public utilities or whose main raw material is energy, (iii) telecommunications and information technology, and (iv) trading over internet. In complying with its main objects, the company will carry out the following functions: a) Promote, organize, build, modify, dissolve or liquidate companies of any nature, which have similar corporate objects to its own. b) Propose investment, financing and business policies to subsidiary companies, as well as accounting criteria and systems that these should follow. c) Supervise subsidiary management. d) Provide subsidiary or associate companies with the necessary financing for their business development and provide management services; financial, technical, legal and auditing advice; and in general any type of service that appears necessary for their best performance. 25 Ownership Structure 27 28 Enel Américas Annual Report 2016  Ownership Structure Ownership Structure The company capital is divided into 58,324,975,387 shares (including 872,333,871 shares of treasury shares), with no nominal value and holds the same single series. As of December 31, 2016, all shares were subscribed and paid-in, and were distributed as follows: Number of shares 19,794,583,473 9,967,630,058 8,364,037,354 5,631,047,778 194,337,382 8,630,884,059 3,179,779,653 2,562,675,630 58,324,975,387 Shareholding 33.94% 17.09% 14.34% 9.65% 0.33% 14.80% 5.45% 4.39% 100.00% Total Shares Shareholder Enel Latinoamérica S.A. Enel Iberoamérica S.R.L. Pension Funds ADR’S (Citibank N.A. according to circular N°1.375 of the SVS) Foreign Investment Funds Custodian banks on behalf of third parties Stockbrokers, insurance companies, mutual funds Other shareholders Identification of Controllers As defined in Title XV of Law No. 18,045, Enel Américas S.A. is controlled by Enel SpA., Italian company, through the Spanish company Enel Iberoamérica, S.R.L., with 51.0282% of shares issued by Enel Américas S.A., and Enel SpAcontrols 100% of Enel Iberoamérica, S.R.L. Enel SpA’s Shareholders Ministero dell’Economia e delle Finanze de Italia Institutional Investors Retail Investors https://www.enel.com/en-gb/investors/shareholders Total The controller’s members don’t have a joint action agreement. 23.6% 54.0% 22.4% 100.0% 29  List of the Twelve Main Shareholders of the Company As at December 31st, 2016, Enersis was owned by 24,587 shareholders. The twelve main shareholders were: Name or Company Name Enel Latinoamérica S.A. (1) Enel Iberoamérica S.R.L. (1) Citibank N.A. As per S.V.S. Circular 1,375 Banco de Chile on behalf of non-resident third parties Banco Itaú on behalf of foreign investors Banco Santander on behalf of foreign investors AFP Provida S.A. for C pension fund AFP Capital S A for C pension fund AFP Cuprum S A for C pension fund AFP Habitat S.A. for C pension fund Enel Américas S.A. (2) AFP Provida S.A. for B pension fund Subtotal 12 shareholders Other 24,575 shareholders TOTAL 24,587 SHAREHOLDERS Tax ID Number of Shares Shareholding 59,072,610-9 59,206,250-K 59,135,290-3 97,004,000-5 97,023,000-9 97,036,000-K 76,265,736-8 98,000,000-1 76,240,079-0 98,000,100-8 94,271,000-3 76,265,736-8 19,794,583,473 9,967,630,058 5,631,047,778 4,108,765,679 2,508,359, 677 1,696,564,437 1,545,089,684 944,688,502 903,572,660 785,483,441 742,504,179 490,138,454 33.94% 17.09% 9.65% 7.04% 4.30% 2.91% 2.65% 1.62% 1.55% 1.35% 1.27% 0.84% 49,118,428,022 9,206,547,365 84.22% 15.78% 58,324,975,387 100.00% (1) By public deed of December 20, 2016, granted at the Notary Andrés Domínguez Nafría, Notary at Madrid and its College of Notaries, formalized an agreement on December 19, 2016 between Enel Latinoamérica, S.A. and Enel Iberoamérica, S.R.L., that consists of the merger by absorption of the first y the second entity, thus extinguishing Enel Latinoamérica, S.A. and becoming Enel Iberoamérica, S.R.L. the legal successor in all of its rights, obligations and every relation to third parties, for every legal affect. The merger was dully registered at the Commercial Register of Madrid on January 13, 2017 and also at the Register of Shareholders of the Company, nonetheless the effects of the register at the Commercial Register of Madrid regress to the date of the presentation, which took place on December 21, 2016.” (2) Corresponds to the shares originated after the Public Tender Offer of Endesa Américas for Enel Américas S.A. 30 Enel Américas Annual Report 2016  Most Significant Changes in Ownership On December 29, 2016, the Company increased its number of shares from 49,092,772,762 shares to 58,324,975,387 shares due to the exchange of shares of Endesa Américas and Chilectra Américas for Enel Américas, after “The Merger” of these three companies. As such, and because the shares register as of December 31, 2016 is not comparable with last year’s register, the most important changes detailed below show the main institutional changes only: Shareholder Tax ID Dv Enel Latinoamérica S.A. 59,072,610 Enel Iberoamérica SRL Citibank N.A. as per S.V.S Circular 1,375 AFP Provida S.A. Banco de Chile on behalf of non-resident third parties AFP Habitat S.A. AFP Capital S.A. AFP Cuprum S A Banco Itaú on behalf of foreign investors Banco Santander on behalf of foreign investors Electronic Stock Exchange of Chile Banchile C. De B. S.A. 59,206,250 59,135,290 76,265,736 97,004,000 98,000,100 98,000,000 98,001,000 76,645,030 97,036,000 96,551,730 96,571,220 9 K 3 8 5 8 1 7 K K 8 8 Number of shares on 12/31/2015 Number of shares on 12/31/2016 19,794,583,473 19,794,583,473 9,967,630,058 9,967,630,058 4,984,301,300 5,631,047,778 1,740,805,548 2,623,011,837 Variation % -6.38% -3.21% -0.50% 0.95% Number of Shares Variation 0 0 646,746,478 882,206,289 2,499,152,073 4,108,765,679 1.95% 1,609,613,606 1,541,930,759 1,481,560,005 1,119,381,465 1,878,800,411 1,166,861,779 1,804,422,529 -0.60% 0.94% 0.72% -60,370,754 759,418,946 637,560,750 1,407,046,008 2,508,359,677 1.43% 1,101,313,669 1,195,688,888 1,696,564,437 0.47% 500,875,549 20,179,829 584,304 314,569,242 450,500,908 -0.04% 0.13% -19,595,525 135,931,666 Exchange Transactions Performed by Related Individuals during 2015 and 2016 Shareholder TAX ID Buyer/ Seller Transaction date Number of shares traded Price per share traded (Pesos) Total amount traded (Pesos) Francisco Fernandez Morandé 7,006,374-3 Buyer 11/09/2015 2,796 178.78 499,869 Purpose of the transaction Financial Investment Relation with the Company Director Related Summary of Directors’ Committee and Shareholders Comments and Proposals Enel Américas S.A. received neither comments nor proposals with regards to the progress of company business between January 1st and December 31st, 2016 from the Directors’ Committee or Shareholders who own or represent 10% or more of the shares issued with voting rights as stated in Articles 74 of Law No. 18,046 and 136 of the Regulation to Public Companies. 31 Administration 33  Board of Directors 1 5 2 6 3 7 4 1. CHAIRMAN Francisco de Borja Acha Besga Attorney at Law Universidad Complutense de Madrid DNI: 05263174-S From 04.28.2016 2. VICE CHAIRMAN José Antonio Vargas Lleras Attorney at Law Universidad Colegio Mayor del Rosario, Colombia DNI: 79.312.642 From 28.04.2016 3. DIRECTOR Enrico Viale Engineer Degree Universidad Politécnica de Turín MBA Escuela de Negocios Universidad de Santa Clara DNI: AU 2580379 From 04.28.2016 4. DIRECTOR Livio Gallo Electronic Engineer Universidad Politécnica de Milán DNI: AV 0246369 From 04.28.2016 5. DIRECTOR Hernán Somerville Senn Lawyer Universidad de Chile Master of Comparative Jurisprudence Universidad de New York DNI: 4,132,185-7 From 04.28.2016 6. DIRECTOR Domingo Cruzat Amunátegui Industrial civil engineer Universidad de Chile MBA The Wharton School of Pennsylvania University DNI: 6,989,304-K From 04.28.2016 7. DIRECTOR Patricio Gómez Sabiani Business Administration Degree George Mason University, Virginia Master in Business Administration George Washington University, Washington DC Passport: 16941675N From 04.28.2016 34 Enel Américas Annual Report 2016 A Board of Directors comprised of seven members, who remain in office for a three-year period and may be re-elected, manages Enel Américas. The Board was appointed at the Ordinary Shareholders’ Meeting held on April 28, 2016. According to the Corporations Law, if a Director’s vacancy occurs, the whole board shall be renewed at the next ordinary shareholders’ meeting the corporation shall hold, and, in the meanwhile, the board may name a substitute. The Company doesn’t consider any substitute members. In the last two years, the following were also Directors of Enel Américas: Francesco Starace Vice Chairman of the Board Nuclear Engineer Universidad Politécnica di Milano Passport: YA5358349 Francesca Di Carlo Director Degree in Economics Universidad La Sapienza, Roma Passport: AA2224406 Alberto De Paoli Director Degree in Economics Universidad La Sapienza, Roma Passport: YA4226864 Rafael Fernández Morandé Director Industrial Civil Engineer Pontificia Universidad Católica de Chile DNI: 6,429,250-1 Herman Chadwick Piñera Director Lawyer Pontificia Universidad Católica de Chile DNI: 4,975,992-4 35  Board of Directors’ and Directors’ Committee Compensations Pursuant to Article 33 of Law No. 18,046 Corporations Law, the Ordinary Shareholders’ Meeting held on April 28, 2015 approved the compensations for the Board of Directors and Directors’ Committee for the 2016 accounting period. The compensations for the Directors’ Committee consist on an annual variable remuneration equal to one per thousand of the net profits of the period. As an advance payment, a monthly compensation was defined, part of which is at any event and part of it eventually, and it’s imputable to the aforementioned annual variable compensation. The compensation for the Directors’ Committee consists on an annual variable remuneration equal to cero point one thousand seven hundred seventy five of the net profits of the period. It was determined to pay in advance one-month fee, one part in all events and a variable part, attributable to the referred variable annual remuneration. 36 Enel Américas Annual Report 2016 Total compensation expenses in 2016 were $381,870,270 and are shown in the following table. The Board of Directors did not incur in any expenses for external consulting services. Total compensation expenses in 2015 were $ 564,993,635 and are shown in the following table. The Board of Directors did not incur in any expenses for external consulting services. 2016 Figures in Ch$ Position Name Chairman Francisco de Borja Acha Vice Chairman Jose Antonio Vargas Lleras Director Livio Gallo Enrico Viale Director Herman Somerville Senn (1) Director Domingo Cruzat Amunátegui (1) Director Patricio Gomez Sabaini (1) Director Rafael Fernandez Morandé (2) Director Hernán Chadwick (2) Director General Total Fixed Remuneration Ordinary and Extraordinary Sessions Committee Fixed Compensation Committee Fixed Compensation Variable Compensation TOTAL 2016 $ 56,262,623 $ 36,099,761 $ 18,751,800 $ 12,031,368 0 $ 123,145,552 $ 42,372,841 $ 29,303,277 $ 42,372,841 $ 29,303,277 $ 6,796,484 $ 18,552,388 $ 6,796,484 $ 18,552,388 $ 108,299,283 $ 178,113,081 $ 14,124,280 $ 14,124,280 $ 6,181,721 $ 6,181,721 $ 59,363,802 $ 9,767,896 $ 9,767,896 $ 2,263,471 $ 2,263,471 $ 36,094,102 0 $ 95,568,294 0 $ 95,568,294 0 $ 33,794,064 0 $ 33,794,064 $ 381,870,268 (1) Messrs. Hernán Somerville S., Domingo Cruzat A. and Patricio Gomez S., assumed their positions at the Board of Directors of Enel Américas in April, 2016. (2) Messrs. Hernán Chadwick Piñera and Rafael Fernandez Morandé, held their positions at the Board of Directors until April, 2016 2015 Figures in Ch$ Position Name Chairman Borja Acha Besga Chairman Jorge Rosenblut Chairman Pablo Yrarrázaval Francesco Starace (1) Vice Chairman Director Borja Prado Eulate Director Andrea Brentan Director Leonidas Vial Echeverría Alberto Di Paoli (1) Director Rafael Fernández Morandé Director Director Carolina Schmidt Zaldivar Director Hernán Somerville Senn Francesca Di Carlo (1) Director Herman Chadwick Piñera Director General Total Fixed Remuneration Ordinary and Extraordinary Sessions Committee Fixed Compensation Committee Fixed Compensation Variable Compensation TOTAL 2015 37,873,751 35,951,085 14,934,046 9,956,031 12,192,881 9,759,798 4,036,727 20,183,636 77,861,563 20,183,636 18,165,273 3,027,545 14,784,561 45,292,200 22,743,375 14,784,561 47,112,130 15,186,844 47,112,130 38,080,805 16,326,667 36,390,861 15,326,923 4,692,396 15,326,923 15,955,804 3,113,832 15,955,804 17,741,473 2,956,913 17,741,473 134,217,135 42,276,652 132,527,191 31,925,286 204,100,218 21,754,139 170,456,236 9,135,550 44,481,792 12,292,348 47,317,788 98,637,601 75,107,322 564,993,635 (1) Messrs. Borja Acha, Francesco Starace, Alberto de Paoli and Francesca di Carlo, renounced to any compensation payment due to their current positions in the senior management of the Enel Group. 37  Social Responsibility and Sustainable Development Board Diversity Number of people by gender: Female Male General Total 0 7 7 Number of people by nationality: Chilean Spanish Argentine Colombian Italian General Total 2 1 1 1 2 7 Number of people by age range: Between 41 and 50 years old Between 51 and 60 years old Between 61 and 70 years old Over 70 years old General Total 0 4 2 1 7 Number of people by seniority: Less than 3 years More than 12 years General Total 6 1 7 38 Enel Américas Annual Report 2016  Board of Directors Consulting Expenses During 2016, the Board of Directors did not make any expenses in consulting services. Property over Enel Américas AS of December 31, 2016, according to the Shareholders’ Register, none of the current Directors held ownership of the company. Directors’ Committee Pursuant to Article 50 bis of law No. 18,046 Corporations Law, Enel Américas S.A. has a Directors’ Committee composed of three members, with faculties and duties enumerated in said article and those delegated by the Board as established in the Regulation of the Director’s Committee. As of January 1st, 2016 the Directors’ Committee of Enersis S.A., currently Enel Américas S.A., was comprised by Messrs. Hernán Somerville Senn (independent member), don Herman Chadwick Piñera (independent member) and Rafael Fernández Morandé (independent member), and its Chairman and Financial Expert was Mr. Hernán Somerville Senn and the Secretary of the Directors’ Committee was Mr. Domingo Valdés Prieto, Legal Counsel of Enersis S.A. At the ordinary session of the Board of Directors held on April 29, 2016 were appointed as members of the Directors’ Committee Messrs. Hernán Somerville Senn, Patricio Gómez Sabaini and Domingo Cruzat Amunátegui. Mr. Hernán Somerville Senn was appointed Financial Expert of the Directors’ Committee. For its part, at the ordinary session of the Directors’ Committee held on April 29, 2016, Mr. Hernán Somerville Senn was appointed Chairman of the Directors’ Committee and Mr. Domingo Valdés Prieto, Legal Counsel of the Company, was appointed secretary of the committee. 39  Directors’ Committee Management Annual Report The Directors’ Committee held twenty-one meetings in 2016, including the aforementioned session. During the sessions in 2016 the Director’s Committee addressed subjects regarding their interests, giving due fulfillment of their obligations dictated by the Article 50 statue number 18,046 about Public Limited Companies. 1.- Consolidated Financial Statements At the ordinary session held on February 26, 2016, the At the extraordinary session on August 5, 2016, the Directors’ Committee declared to have examined the Company’s Consolidated Financial Statements as of June 30, 2016, with following documents were unanimously declared to have their Notes, Income Statement and Relevant Events having been examined; the Consolidated Financial Statements up been reviewed, as well as the External Auditors’ opinions to December 21, 2016, its notes, Financial Statements and was issued “without any observation” as of August 5, 2016, Relevant Facts, as well as the External Auditor’s opinions. At signed by Mr. Emir Rahil, partner of Ernst & Young, for all the same time, the Directors’ Committee resolved to repeat of the necessary effects in respect to the foreseen fusion that twice a year Ernst & Young must issue an explicit and in the society’s reorganization In course. It was in respect specific opinion about the provisions regarding litigation and to the same Consolidated Financial Statements previously by products. examined in the session on the July 27, 2016 but with an “Auditor’s’ Opinion”, issued by the External Auditors, Ernst & At the extraordinary session on May 6, 2016 the Directors’ Young. Committee declared to have examined the company’s Consolidated Financial Statements on March 31, 2016 as well During the same extraordinary session on August 5, 2016, as the Notes, Financial Statements, and Relevant Facts. the Directors’ Committee declared to have examined the At the ordinary session held on July 27, 2016, the Directors’ of Enersis Américas up until June 3, 2016, as well as its Consolidated Financial Statements Pre-Form of the merger Committee declared to have examined the company’s respective explicatory notes. Consolidated Financial Statements until June 30, 2016, the Notes, Income Statement and Relevant Events have been At the extraordinary session on November 4, 2016 the reviewed, as well as the External Auditors’ opinions were Directors’ Committee declared to have revised the Company’s issued “without any observation” as of July 27, 2016, signed Consolidated Financial Statements as of September 30, 2016 by Mr. Emir Rahil, partner of Ernst & Young. With respect with their Notes, Income Statement and Relevant Events to the subject, the partners at Ernst & Young who exposed having been reviewed and the relative letter to operations on it, also expressed that with regards to the provisions between the related parts. by derivatives and litigation, they had not identified special situations and that it was a key part of the revisions that were At the ordinary session on April 29, 2016 the Directors’ always performed by external auditors. Committee declared to have revised the 20-F Form and the At the extraordinary session on May 6, 2016, the Financial to their presentation before the Securities and Exchange Statements were agreed to be elaborated under IFRS Commission of the United Stated of America, with the standards, which are incorporated under the “Registration purpose of complying with the norms and requirements Statement on Form F-4”, which is to be presented before dictated by said public authority related to the emission of Company’s Consolidated Financial Statements within it, due the Securities and Exchange Commission of the United securities in said country. States of America, with the goal of complying by their norms and requirements issued by said public authority related At the extraordinary session on August 5, 2016, the Directors’ with the emission of securities in said country, as well as Committee declared to have examined: (1) an updated version recommending the Directors Board of its approval. of the 20-F Form and the Consolidated Financial Statements 40 Enel Américas Annual Report 2016 and audited the contents in it, for local effects of the Company, It’s worth mentioning that these agreements were in order to be presented before the Securities and Exchange unanimously adopted by the member of the Directors’ Commission of the United States of America, (2) updates of Committee, except for the case regarding the external the “Registration Statement on Form F-4” for its presentation auditor’s services for the process of Division and Merger in before the referred Securities and Exchange Commission the year 2016, which was treated on the date January 29, with the objective of complying with the norms and 2016, were the director Rafael Fernández Morandé voted requirements by this public authority related to the Fusion of against. value emitting societies in said country, the Company’s value registry before said entity, under the Securities Act of 1933 and its modifications, as a product of the Fusion, including the American Depositary Shares that represent the Company’s 4.- Intercompany Contract Review At the ordinary session on February 26, 2016, the ordinary stocks, as well as to apply for the exemptions that are subscription for the provision of services was declared available under the Securities Act for certain registry requisites to have been examined. This was between Enersis established by the same law and US laws, in particular the Américas S.A., now Enel Américas S.A., as a receptor exemption contained in the Rule 802 in the 1933 Securities of the services and Enersis Chile S.A., now Enel Chile Act; (3) the updated version of the referred documentation S.A., as the loaner of these, declaring that said operation by the fulfillment of the Rule 13 e-3 to be presented before contributed to the Enersis Américas S.A. social interest the Securities and Exchange Commission, with the purpose and adjusted in price, terms, and conditions to those that of complying with the norms and requirements dictated prevailed in the market at the time of the approval, for by the public authority related to the fusion and operations which the PricewaterhouseCoopers report was at hand. framework of the reorganized society. It was agreed to establish that Enersis Américas S.A. will count with a high level executive to be a Compliance In all of these cases, the agreements were unanimously Officer that informs the Board of Directors and the Board approved by the members of the Directors’ Committee. every three months about the quality and standards which 2.- Registry Situation before the United States of America Securities and Exchange Commission (SEC) At the extraordinary session on March 10, 2016, the Directors’ are being given to each of the service groups under these contracts. At the same time, the contracts must include a termination clause in the event that the Board considers that the respective services have not adjusted to the standards and protocols that a company of this magnitude must have; lastly, that it be verified that the enforceability Committee declared to have examined the Registry Situation and contract terms in case of unfulfillment be those of the before the SEC of the United States of America, regarding market, in the sense that they be equivalent to a contract what was exposed by the Ernst & Young partner, Mr. Emil conducted with a third party that has no relation to this Rahil. business group and that counts with an arbitral clause 3.- Review of services provided by External Auditors At the ordinary sessions with the dates January 29, February The Director Rafael Fernández Morandé pointed out the fact that he was voting against declaring to have examined the 26, March 23, June 28, August 31, September 29, and document at matter. The other members of the Directors’ CAM. October 28, all in 2016; and on the extraordinary sessions on Committee voted in favor. May 6, July 5, and August 6 of 2016, the external auditor’s services carried out were analyzed, those that were not from At the same ordinary session on February 26, 2016, external auditors and non-recurring; and, it was agreed to the Directors’ Committee declared to have examined declare that they do not compromise the suitable technique the subscription of a service contract between Enersis nor the independence of the trial of the respective external Américas S.A., now Enel Américas S.A., as a service auditing companies. That, according to what is written In provider and Enersis Chile S.A., now Enel Chile S.A., as a Section 202 of the Law Sarbanes Oxley, in article 242, final receptor of these, declaring that said operation contributed subsection, of the Law 18.045, of the Value Market and in the to the Enersis Américas S.A. social interest and adjusted Directors Committee Guidelines. to its price, terms, and conditions of those that prevailed 41 in the market at the time of the approval, for which the adjustment of conditions does not imply a modification in the PricewaterhouseCoopers report was on hand. funds in the terms put forth by the Directors’ Committee in In the ordinary session held on May 31, 2016, the Directors’ to the social interest. And also regarding its price, terms, and Committee declared to have examined a loan operation conditions are adjusted to the ones currently found in the the session of October 28, 2016, and how much it contributed between Enersis Américas S.A., now Enel Américas S.A., market at the time of its approval. as a creditor, and Enel Brasil S.A., as a debtor, and that the operation contributes to the social interest and in its At the ordinary session held on December 20, 2016, the price, terms, and conditions which will be examined in a Directors’ Committee unanimously agreed to declare to corresponding opportunity. have examined the operation regarding the increase in proposed capital by Enel Argentina S.A. consistent with the At the ordinary session held on June 28, 2016, the Directors’ contribution of the social participants of the Enel Américas Committee unanimously agreed to declare as examined the property in Edesur S.A., Yacilec S.A., Enel Generación El service contract between Enersis Américas and Enersis Chile, Chocón S.A., Enel Generación Costanera S.A., Enel Trading whose presentation was completed by the Administration, Argentina S.R.L. and Central Dock Sud S.A.. These were Finance and Control Manager, Mr. Javier Galán Allué, in his used to valuate said social participations carried out by an capacity as Compliance Officer of the services mentioned. independent appraiser, and to declare that this transaction constitutes an operation between both related parts that At the extraordinary session held on August 5, 2016, the follows Title XVI of the Public Limited Company Laws, Directors’ Committee unanimously agreed declared to have which contributes to the social interest of Enel Américas examined the operation between the related parts consistent S.A. and whose price, terms, and conditions are adjusted with the granting of an intercompany loan by Enersis Américas to the ones currently found in the market at the time of its S.A., now Enel Américas S.A., and Endesa Américas, which approval, for which the report issued by the independent is now merged by absorption into Enel Américas S.A., with appraiser has been kept on hand. a charge to the Mercantile Current Accounts (CCM) between the existing companies. This constitutes as an operation between the addressed related parts that takes place with the parent company and subsidiary that operates under Title 5.- Supervision and Evaluation of External Auditors At the ordinary session held on February 26, 2016, it was XVI of the Public Limited Company Law; that the operation unanimously agreed that the work done by the external contributes to the social interest and that it adjusts in its auditor company, Ernst & Young, carried out during the fiscal price, terms, and conditions of those that currently prevail in year 2015, was considered reasonable. the market; and also declared that according to the amount of the operation and the unusual situation, it is not included in the company’s regular policy. At the ordinary session on October 28, 2016, the Directors’ 6.- External Auditors Report on money order and money brokerage At the ordinary session held on February 26, 2016, the Committee unanimously declared to have examined the Directors’ Committee unanimously agreed to record that they operations between both related parts consistent with the had received formal and express consent on the report of granting of guaranties from Enersis Américas S.A., now Enel money brokerage and money orders prepared by the external Américas S.A., for its subsidiary Ampla Energia y Servicios auditors, Ernst & Young, dated February 26, 2016. S.A. in favor a creating a fund for the effects of the credit grant given by the Banco Credit Agricole, which contributes to the social interest and adjusts to the price, terms, and conditions of those that currently prevail in the market, whose warranty 7.- Review of the Internal Control Letter Notice Nº422 SVS At the ordinary session held on February 26, 2016, the is found subject to the condition that Enersis Américas is still Directors’ Committee agreed to have taken formal and controlled by Ampla. In the ordinary session on December express knowledge of the Letter of Internal Control dated 20, 2017, the Directors Committee agreed to declare to have February 26, 2016, prepared by Ernst & Young to comply with examined the held contracts and the new conditions referred the regulations issued by the Superintendence of Securities in the operation mentioned beforehand, declaring that the and Insurance (SVS) on this matter. 42 Enel Américas Annual Report 2016 The agreement was adopted with only one vote against from Director Rafael Fernández Morandé. 8.- Review of the External Auditors of Matters Covered in NCG Nº385 At the ordinary session held on February 26, 2016, and 12.- Risk Rating Agencies’ Proposal At the ordinary session held on February 26, 2016, the Directors’ Committee unanimously agreed to propose to the Directors’ Committee that the Feller Rate Clasificadora de Riesgo Limitada and Fitch Chile Clasificadora de Riesgo Limitada will be proposed at the respective Shareholder’s in the extraordinary session held on August 5, 2016, by Meeting as national risk rating agencies, and Fitch unanimity of its members it was agreed as reviewed the Ratings, Moody’s Investors Service and Standard & matters referred in paragraph 1 d) of the General Standard Poor’s International Rating Services will be appointed as Legislation Nº 385 of the SVS. Also, it was none of the the private international risk rating agencies for the 2016 matters in sub-paragraphs ii, iii and v were referred to, of exercise. the previously mentioned item. 9.- External Auditors’ Fees for the Exercise 2015 At the ordinary session held on February 25, 2016, the 13.- Appointment of an independent appraiser and development of its work At the extraordinary session held on May 16, 2016, it was Directors’ Committee unanimously agreed to approve the unanimously resolved to appoint Credicorp Capital S.A. fees paid to the enterprises of the Enersis Group during the as an independent appraiser in relation to the merger and exercise of 2015, to the different external auditors that the with an independent appraiser’s work, as defined by Title Company uses. 10.- Contract between Enersis Américas S.A. and Ernst & Young for the 2016 exercise The Directors’ Committee unanimously agreed to declare to XVI of the Public Limited Companies Act, for the purpose of issuing a report in the terms of Article 147 of said law. It was also resolved to request the Company’s Council to issue a significant event e giving account of the aforementioned designation and the scope of its task. have examined and approved the contract or commitment In the ordinary session held on May 31, 2016, the Directors’ of the subscription letter between Enersis Américas S.A., Committee unanimously took note of the presentations currently Enel Américas S.A. and the External Auditors Ernst made by the independent appraiser for the merger, Credicorp & Young. 11.- External Auditors’ Proposal At the ordinary session held on March 23, 2016, the Directors’ (IM Trust), regarding the evaluation methodologies, the work schedules to be developed for the provision of services, and the means that will be available for such purposes. In addition, to clearly determine the purpose of the assignment Committee unanimously resolved to propose in the Ordinary entrusted to it, in accordance with the law. Shareholder Meeting that the following priority order would be appointed for the examining of the current external At the ordinary session held on June 28, 2016, the Directors’ auditing firm of Enersis Américas, currently, Enel Américas Committee unanimously acknowledged the presentation S.A., for the year 2016: 1° E&Y; 2° RSM; 3° PKF and 4° KPMG. of the independent appraiser Credicorp (IM Trust) on the The main reasons for proposing E&Y as the external auditor progress of the independent evaluation. for Enersis Américas S.A., now Enel Américas S.A., are the following: (i) presented the most competitive proposal At the ordinary session held on July 27, 2016, the Directors’ according to verified technical and economic evaluations Committee unanimously acknowledged the presentation of of the proposals received; (ii) has a high qualification in the the independent appraiser Credicorp (IM Trust). quality of available resources and has extensive experience in the electricity sector; (iii) is one of the four most important At the extraordinary session held on August 5, 2016, the international and national audit firms; and (iv) it is the audit firm Directors’ Committee, unanimously agreed of having with the highest level of synergy for Enersis Américas S.A., examined and received the final report of Credicorp (IM Trust) as the parent and holding companies of Enersis Américas on the Merger, in the terms prescribed by Article 146 of the S.A. have E&Y as their lead auditor. Corporations Law. 43 14.- Report of the Directors’ Committee on the Merger At the extraordinary session held on July 12, 2016, the 17.- Analysis of Complaints to the Ethical Channel At the ordinary session held on March 23, and in the Directors’ Committee unanimously agreed to hold an extraordinary session of August 5, both in 2016, the extraordinary meeting on July 18, 2016, in order to continue Directors’ Committee issued its opinion on each of the making progress on the report it will issue in connection complaints presented, delivering guidelines to follow up with the merger and its ancillary acts. each one of them and confirming what has been resolved In the extraordinary session held on July 18, 2016, the the Chairman of the Directors’ Committee to agree upon a Directors’ Committee unanimously agreed to approve special meeting of this entity in the event that a complaint so the progress of the draft report to account for the merger warrants, in the opinion of the Chairman of the Committee between Enersis Américas and Chilectra Américas. itself. by this entity, in the sense that it will be the responsibility of Likewise, it was agreed that the Manager of Administration, Finance, and Control would send a new version of the report to the members of the Committee, in order to continue with the elaboration process of the same. 18.- Self Assessment on Internal Control At the ordinary session held on July 27, 2016, the Directors’ Committee unanimously agreed to declare the Self- At the extraordinary session held on August 1, 2016, Assessment structures and procedures on Internal Control the Directors’ Committee unanimously agreed to hold a as reviewed. special session on August 5, 2016, to discuss the report that the Directors’ Committee, as a collegiate body, will issue in relation to the merger of Enersis Américas, 19.- Risk Policy and Risk Matrix At the ordinary session held on January 29, 2016, the Endesa Américas, and Chilectra Américas, in accordance Directors’ Committee unanimously agreed to have with what is foreseen in Article 50 of the Law 18,046, the reviewed the Company’s risk matrix from the perspective Chilean Corporations Law. of the business and to discuss the issues referred to in paragraph 1 e) of the Norm of General Character No. 385 of At the extraordinary session of August 5, 2016, the the SVS, carried out by the Risk Manager of the Company. Directors’ Committee issued the report on the merger, Likewise, it was resolved that the Risk Management Policy as a related party transaction, prepared in accordance to be presented at a forthcoming session, incorporating the the provisions of Article 50 bis of the Chilean Corporations various observations made. Law. 15.- Report on the OPA Results and the withdrawal rights At the extraordinary session held on November 4, 2016, At the ordinary session held on February 26, 2016, the Directors’ Committee, unanimously agreed to examine the Company’s Risk Matrix for Internal Audit procedures. At the ordinary session held on March 23, 2016, the the Administration, Finance, and Control Manager, made Directors’ Committee unanimously agreed to already having a presentation explaining the outcome of the takeover examined the Risk Policy of Enersis Américas S.A. and its bid (OPA), including the “tender offer” carried out in the subsidiaries. United States of America and the Withdrawal Rights. 16.- External Audit Plan for 2016 At the extraordinary session held on August 5, 2016, the Directors’ Committee, unanimously agreed to acknowledge the presentation made by the Ernst & Young partner, Mr. 20.- Review of the Compensation System and Compensation Plans for Managers, Senior Executives and Employees of the Company At the ordinary session held on August 31, 2016, the Emir Rahil and the partner of the same company, Mr. Directors’ Committee unanimously declared to have the Emiliano Colmenares, on the state of progress of the remuneration systems and compensation plans of the External Audit Plan for the year 2016. company’s managers, chief executives, and employees. 44 Enel Américas Annual Report 2016 21.- Other matters/various At the ordinary session on February 26, 2016, the Chairman At the ordinary session held on March 23, 2016, the Directors’ Committee unanimously agreed to declare to of the Directors’ Committee, Mr. Hernán Somerville Senn have examined the sentence issued on March 22, 2016, exposed the need that the Directors’ Committee needs by the Court of Appeals of Santiago, in the judicial process to constitute in one or more of the countries in which the that had initiated AFP Habitat through an interposition of company has relevant subsidiaries, and that it’s purpose is a complaint appeal for illegality against the SVS N°15,443 to give adequate fulfillment of the role that as a “holding” issued by the Security and Insurance Commission, and corresponds to Enersis Américas in relation to the different replicated by SVS N°15.454 and SVS N°15.455, all dated countries where the company has significant investments. July 20, 2015. The judicial sentence mentioned partially received the complaint appeal, once it had considered At the same time, the director Mr. Rafael Fernández all divisions of Enersis S.A., Endesa Chile and Chilectra Morandé pointed out that he considered a task and duty of S.A., already approved by the respective extraordinary the Directors’ Committee to analyze the situation related shareholder meetings on December 18, 2015, that to the compensation that Enersis Américas’ Directors had been adjusted to the right and did not need to be voted by majority in favor that Endesa, corresponding to complemented with Title XVI by the Limited Company the tributary costs that meant that the division must be Laws about the operations between related parties. On analyzed by the Directors’ Committee. He added that his the other hand, it indicated that the sentence has been opinion is the same with respect to the contract between integrated into the complaint appeal mentioned before in Enersis Américas and the depositary bank Citibank, since the terms of the merger of Enersis Américas S.A., Endesa it considered the latter as an operation between related Américas S.A. and Chilectra Américas S.A., must register parties. under Title XVI about the merging of companies, at the same time with Tile XVI about operating with related The general manager observed that the compensation parties and requesting the Company’s Management for an mentioned by the director Fernández Morandé had already analysis of a compatible form of Title IX about the merger been considered as an operation between related parts of Public Limited Companies with Title XVI about operating by the Company’s corporate bodies, before which the with related parties, for the event that neither part in the Directors’ Committee Chairman manifested that he had litigation interferes in a complaint resource in time and understood the same, which is that once the tax costs form. were revised they would be presented in a contract text. Therefore, the Directors’ Committee President proceeded At the extraordinary session held on May 6, 2016, the to request that the Administration, Finance and Control Chairman of the Directors’ Committee, Mr. Hernán Manager, Mr. Javier Galán Allué, to made a presentation Somerville Senn reminded the CEO and the Manager of of a detail of the aforementioned tax costs mentioned for Administration, Finance and Control the importance of the the next session. registration of Enersis Américas S.A., now Enel Américas, on the sustainability index of the Santiago Stock Exchange. At the same session, the Directors’ Committee Thus, and according to the report, the Directors’ Committee unanimously agreed to take notice of the presentation has fully complied with the obligations set forth in article related to the general situation that the subsidiary Ampla 50 bis of Law N°18,046 Corporations Law. was currently facing and pointed out to the Administration, Finance, and Control Manager that the matter should continue to be analyzed. In the same way, the Committee declared to have examined the bail terms and solidarity co- debt of Enersis Américas, now Enel Américas S.A., in favor of Ampla subsidiary, considering that the Administration, Finance and Control Manager had accredited that the terms obtained are the best available for a transaction of this nature, declaring that the operation is at market conditions and its convenient for social interest. 45  Expenses of Enel Américas S.A. Directors’ Committee The Directors’ Committee did not make use of the expense as the debtor, indicating that the operation contributed to budget for ordinary functions approved by the Ordinary the social interest and that its price, terms and conditions Shareholders Meeting held on April 28, 2016. would be examined in the following relevant occasion. Directors Committee, during the Exercise of 2016, reviewed the following Operations between Related Parties (OPR) At the extraordinary session held on August 5, 2016, the Directors’ Committee unanimously declared to have examine the operation between related parties in the granting of an intercompany loan between Enersis Américas S.A., now Enel Américas S.A., to Endesa Américas, now merged by absorption to Enel Américas S.A., for a total of 240,000 million Chilean pesos, charged to the existing Market Bank Account (CCM) between At the ordinary session held on February 26, 2016, the Enersis Américas and Endesa Américas. It was indicated Directors’ Committee agreed by majority of its members that the operation contributes to the social interest and and with the opposing vote of Director Fernandez that it’s adjusted in price, terms, and conditions to those Morandé, to have reviewed the subscription to the that currently prevail in the market. contract of services rendered between Enersis Américas S.A., now Enel Américas S.A., as recipient of the services, In the ordinary session held on October 28, 2016, the and Enersis Chile S.A., now Enel Chile S.A., as provider Directors’ Committee unanimously declared to have of the services, declaring that the previous operation examined the transaction between the related parties contributed to the social interest of Enersis Américas S.A., consisting of the granting guarantees by Enersis and it was adjusted in price, terms and conditions to those Américas S.A., now Enel Américas S.A., for its subsidiary that prevailed in the market at the time of its approval, for Ampla Energía y Servicios S.A. for a total of 4.5 MMEUR which the report made by PricewaterhouseCoopers was (approx. 5.5 MMUSD), in favor of the fund created for the taken into account. purpose of assigning loans by the Credit Agricole Bank, indicating that the operation contributes to the social In the same ordinary session held on February 26, interest in which the price, terms, and conditions have 2016, the Directors’ Committee agreed by majority of been adjusted to those currently prevailing in the market. its members and with the opposing vote of Director The warranty is subject to the condition that Enersis Fernández Morandé, to have reviewed the subscription Américas continues to be the parent company of Ampla. of a contract of services between Enersis Américas S.A., now Enel Américas S.A., as the service provider and At the ordinary session held on December 20, 2016, the Enersis Chile S.A., now Enel Chile S.A., is the recipient Directors’ Committee unanimously agreed to declare, of the services, declaring that the operation contributed in the context of the related party transaction already to the social interest of Enersis Américas S.A., and that examined at the meeting held on October 28, 2016, it was fair in price, terms, and conditions to those that Ampla’s assignment of invoices operation, confirming prevailed in the market at the time of its approval, for that the operation contributes to the social interest and which the report made by PricewaterhouseCoopers was that the price, terms and conditions are adjusted to those taken into account. that prevail in the market at the time of approval. At the ordinary session of May 31, 2016, the Directors’ At the ordinary session held on December 20, 2016, the Committee unanimously declared to have reviewed the Directors’ Committee unanimously declared as examined loan transaction between Enersis Américas S.A., now the proposed capital increase in Enel Argentina S.A. Enel Américas S.A, as the creditor, and Enel Brasil S.A., coherent with the contribution of Enel Américas’ equity 46 Enel Américas Annual Report 2016 interest in Edesur S.A., Yacilec S.A., Enel Generación El , Chocón S.A., Enel Generación Costanera S.A., Enel Trading Argentina S.R.L. and Central Dock Sud S.A. using for those effects the valuation of the aforementioned shareholdings made by the independent appraiser. Also, they have declared that this operation constitutes a transaction between related parties that are governed by Title XVI of the Chilean Corporations Law, which contributes to the interests of Enel Américas S.A. and that is adjusted by price, terms and conditions to those that prevail in the market at the time of its approval, for which the report issued for the purpose by the independent evaluator has been taken into consideration 47  Organizational Structure BOARD OF DIRECTORS CHIEF EXECUTIVE OFFICER Luca D’Agnese INTERNAL AUDIT OFFICER Raffaele Cutrignelli HUMAN RESOURCES AND ORGANISATION OFFICER Alain Rosolino PROCUREMENT OFFICER Antonio Barreda Toledo CHIEF FINANCIAL OFFICER GENERAL COUNSEL INSTITUTIONAL RELATIONS OFFICER COMMUNICATIONS OFFICER Javier Galán Allue Domingo Valdés Prieto Francesco Giorgianni José Miranda Montecinos PLANNING AND CONTROL OFFICER Emanuele Brandolini (1) 48 Enel Américas Annual Report 2016  Main Executives 1 2 6 3 7 4 8 5 9 9. PLANNING AND CONTROL OFFICER Emanuele Brandolini Industrial Engineer– Degree in Engineer with full marks (specialist in Management and Economy) Università degli Studi Tor Vergata, Rome (Italy) Masters Degree in Business Administration SDA BOCCONI, Milano (Italy) DNI 25,625,052-7 (1) Emanuele Brandolini took position on 01.01.2017 and replaced Marco Fadda. 1. CHIEF EXCECUTIVE OFFICER Luca D’Agnese Physics Degree Scuola Normale Superiore de Pisa Master in Business Administration Escuela de Negocios of INSEAD DNI: 24,910,349-7 From 01.29.2015 2. HUMANO RESOURCES AND ORGANIZATION OFFICER Alain Rosolino Business Administration Degree Universidad LUISS DNI: 24.166.243-8 From 04.28.2016 3. INTERNAL AUDIT OFFICER Raffaele Cutrignelli Internacional Businesses Degree Nottingham Trent University (United Kingdom). Audit and Internal Control Masters Degree Universitá di Pisa (Italy) Certificate in Strategy, Innovation, Management and Leadership Massachusetts Institute of Technology (MIT) DNI: 25,553,336-3 From 10.01.2016 4. COMMUNICATIONS OFFICER José Miranda Montecinos Audiovisual Communicator Professional Institute DUOC UC Executive Competencies Diploma, Universidad de Chile Corporate Undertaking and Open Innovation Studies, Berkeley University DNI: 15,307,846-7 From 02.29.2016 5. INSTITUTIONAL RELATIONS OFFICER Francesco Giorgianni Lawyer Universidad de Roma La Sapienza DNI: 24,852,388-3 From 12.15.2014 6. ADMINISTRATION, FINANCE AND CONTROL OFFICER Francisco Javier Galán Allue Economist Universidad Complutense de Madrid Master in Business Administration Instituto de Empresas de Madrid DNI 24,852,381-6 From 12.15.2014 7. PROCUREMENT OFFICER Antonio Barreda Toledo Electrical Execution Engineer Universidad de Santiago de Chile Business Administration Diploma (ESAE) Pontificia Universidad Católica de Chile Master in Business Administration P. Universidad Católica de Chile DNI: 7,625,745-0 From 01.29.2015 8. GENERAL COUNSEL AND BOARD OF DIRECTOR’S SECRETARY Domingo Valdés Prieto Lawyer Universidad de Chile Master of Laws Universidad de Chicago DNI: 6,973,465-0 From 04.30.1999 49  Compensations of officers and senior executives During 2016, the remunerations and benefits received by the Chief Executive Officer and the senior executives of the Company amounted to $3,325 million in fixed remunerations and $224 million in variable remuneration. During 2015, the remunerations and benefits received by the Chief Executive Officer, and the senior executives of the Company amounted to $4,110 million in fixed remunerations and $802 million in variable remunerations and benefits. This amount included compensations for senior managers and executives in exercise as of December 31, each year, as well as those that left the company all along the respective period. Benefits for officers and senior executives The Company provides the benefits of a supplementary health insurance and a catastrophic insurance for its main executives and their family group that is credited as a dependent charge. In addition, the Company has life insurance for each main executive. These benefits will be granted in conformance to the management level that corresponds to the employee at each time. In 2016, the amount was $5,221 million, which was included in the remunerations received by the senior management. Incentive plans for officers and senior executives Enersis has an annual bonus plan for complying with objectives and the level of individual contribution to the company results for its executives. This plan includes a definition of the ranges of bonus according to the hierarchical level of the executives. Bonuses are given to the executives consists in a determined number of gross monthly wages. Severance paid to officers and senior executives There were no compensations for years of services paid to managers and senior executives during 2016. Property over Enel Américas As of December 31, 2016, the register of shareholders reflected that no main executive had ownership on the Company. 50 Enel Américas Annual Report 2016  Administration of main subsidiaries PERU Enel Generación Perú Francisco Javier Pérez Thoden Van Velzen Industrial Engineer Escuela Técnica Superior del ICAI, Universidad Pontificia Comillas en España Enel Distribución Perú Walter Sciutto Brattoli Electrician Engineer Universidad Tecnológica Nacional en Argentina Country Manager Carlos Temboury Molina Industrial Engineer Universidad Politécnica de Madrid ARGENTINA Costanera Ascione Antonino Degree in mechanical engineering (cum laude) Universidad Federico II of Napoli Hidroeléctrica El Chocón Néstor Carlos Srebernic Industrial Engineer Universidad Nacional de Comahue Edesur Blanco Juan Carlos Electrician Engineer Universidad Tecnológica Nacional Central Dock Sud Manifesto Gustavo Diego Electromecanical Engineer Universidad de Buenos Aires BRAZIL Enel Brasil Carlo Zorzoli Electrical Engineer Università di Roma, La Sapienza Enel Green Power Cachoeira Dourada Luigi Parisi Chemical Engineer Università di Pisar Enel Geração Fortaleza Marcelo Falcucci Electrical Engineer Escola Federal de Engenharia de Itajubá – EFEI Enel Cien Abel Alves Rochinha Mechanic Engineer Pontifícia Universidad Católica Río de Janeiro Enel Distribuição Rio Abel Alves Rochinha Mechanic Engineer Pontifícia Universidad Católica Río de Janeiro Enel Distribuição Ceará Abel Alves Rochinha Mechanic Engineer Pontifícia Universidad Católica Río de Janeiro Enel Soluções Marcus Oliver Rissel Industrial Engineer Universidad de Buenos Aires (UBA) COLOMBIA Emgesa Bruno Riga Aeroespace Engineer Universidad de Pisa Codensa David Felipe Acosta Correa Electrical Engineer Universidad Pontificia Bolivariana 51 Human Resources 53 54 Enel Américas Annual Report 2016  Human Resources Distribution The employees’ distribution of Enel Américas as of December 31, 2016, including information related to the subsidiaries in the four countries where Enel Group operates in Latin America and the joint control entities, was the following Company Enel Américas Enel Brasil (1) Edesur (2) Enel Generación Costanera Mercosur Enel Generación El Chocón Transportadora de Energía Enel Generación Perú (3) Enel Distribución Perú Emgesa Codensa General Total Managers and Senior Executives 9 25 31 1 - - 1 16 27 6 22 138 Professionals and Technicians 48 1,991 3,199 424 - 50 - 240 647 532 1,287 8,418 Employees and Others 5 484 1,163 41 3 8 1 - - 13 28 623 Total 62 2,500 4,393 466 3 58 2 256 674 551 1,337 10,301 (1) Includes Ampla, Coelce, CIEN, CTM, TESA, Cachoeira Dourada, Fortaleza and En-Brasil Comercio y Servicios. (2) Includs: Cemsa (currently Enel Trading Argentina S.R.L) and Dock Sud. (3) Includes: Enel Generación Piura and Generalima. 55  Social Responsibility and sustainable development Diversity in general management and the other management departments reporting to the latter or to the Board of Directors Number of people by gender: Female Male General Total Number of people by nationality: Chilean Argentine Spanish Italian General Total Number of people by range age: Between 41 and 50 years old Between 51 and 60 years old Between 61 and 70 years old General Total Number of people by seniority: Less than 3 years Between 3 and 6 years More than 6 and less than 9 years Between 9 and 12 years More than 12 years General Total 1 8 9 3 1 1 4 9 1 8 - 9 6 - - - 3 9 Diversity in the organization Number of people by gender: Enel Américas Female Male General Total 19 34 53 Number of people by nationality: Enel Américas Argentine Brazilian Chilean Colombian Italian General Total 1 5 44 1 2 53 Number of people by range age: Enel Américas Less than 30 years old Between 30 and 40 years old Between 41 and 50 years old Between 51 and 60 years old Between 61 and 70 years old General Total 4 28 14 5 2 53 Number of people by seniority: Enel Américas Less than 3 years Between 3 and 6 years More than 6 years Less than 9 years Between 9 and 12 years More than 12 years General Total 9 12 61 10 5 17 53 Average Fixed Salary of women with respect to men according to their professional level Contents: Senior Management Middle management Administrative and office staff Average % % % % 0.00 106.44 74.49 90.47 56 Enel Américas Annual Report 2016  Human Resources Activities Labor Relations During 2016 the Company continues the regular meetings with unions, thus enabling the open dialogue with the employees’ representatives, en beneficio de mejorar las condiciones laborales y del clima de los empleados, for the benefit of improving the work conditions and the employees’ atmosphere. 57 Labor Security and Health At Enel Américas occupational safety and health are objectives tightly linked to the business, which due to its nature is subject to critical risks. In the continuous improvement process, where everybody contributes, leadership is a value that highlights especially with regards to the real integration of occupational health and safety at all levels and in every activity that the company developes, thus strengthening its priority in corporate management due to its strategic importance. Health Dissemination and Promotion The objective of this programme is to provide health, educate and train the employees of the company through activities related to the promotion of health in quality of life who includes widespread dissemination through posters, graphic material and information sent through mail, denominated “advices that give life”. Among the topics that feature every month, there are: > March: anti-stress campaign: Disclose practical recommendations to suppress its causes. > April: Immunization campaign, an invitation to vaccination to prevent influenza. > May: Anti tobacco campaign including advises to prevent its consumption. > June: Prostate and cervical cancer, an invitation to the annual preventive examination. > July: Viral contagion and respiratory diseases prevention. > August: Heart care campaign. > September: Colon and gastric cancer campaign for the timely detection of these deseases through the preventive examination. > October: Breast cancer prevention. > November: Power your enery campaign with practical nutrition advices to improve the quality of life. > December: Skin care campaign throughout the year. During 2016 the following activities were carried out for the Enel Américas Group’s employees: 1.- Immunization Program 2.- Cardiovascular Risk Program 3.- Preventive Health Exams Program 4.- Safety Campaigns 5.- Implementation of New Safety Standards 6.- Safety training 7.- Training on Emergencies and First Aid Programs 58 Enel Américas Annual Report 2016 People Management Climate Management Reconciliation measures and labor flexibility It’s a priority for Enel Américas and its subsidiaries to have a Enel Américas looks after the equilibrium in the working lives work environment of excellence, on the premise that people of its employees with their families, son it has developed are the focal point of the Company. initiatives that go in that direction. Among those measures, the following stands out: In order to support the management and employees, we have developed different initiatives in this direction: > Teleworking Program: Started in 2012, and has consolidated > Strenghthening of the Managers’ Program. as one of the most valued measures of the Company. > RHO With You Program. > Interact Program. Currently we have 85 teleworkers at the program in the Group, 36 of them work for Enel Américas, under the > Individual Development Program (IDP): System for the arrangement that one day per week, the employee works detection of development requierements through which from home, thus achieving a balance between personal and employees of the Company define, together with their work lives. manager, their current and future development needs. With > Expansion of the Sports and Culture Program this, a training annual program is built. > Summer and winter camps for the employees’ children. > “One-on-One” Meetings. > Summer training workshops addressed for the employees’ > Behaviors and goals fulfillment assessment model PA families. (Performance Appraisal) > “Recognise Us” Program Diversity > Summer School of Universidad de Chile. This is an initiative that seeks to improve the academic level of the employees’ children at senior school. > Other initiatives are: Christmas Party, Senses Workshop, Family Day, end-of-Year Party, the Olympics and the Work Trajectory Award. Enel Américas has developed a new diversity policy, addressing policies gender, age, nationality and disability related practices. This policy promoted the principles of no discrimination, equality of opportunities, inclusion and balance between personal and work lives; and also fundamental values at the activities of the companies of the group. 59 Recruitment and Selection For Enel Américas, the main objective is to bring in the best people for vacant positions, our guiding principle being to favour internal candidates in the first instance. Internships and Young Diversity Talent Attraction Program and Inclusion An initiative to attract the best young talents to the group, For Enel Américas, having different work teams and Enel Américas has a recruitment project that incorporates cultivating an inclusive work environment is essential. This practitioners and thesis students from the best universities translates into a permanent search for new ways to enable of the country. In 2016, the Company hosted a total of 46 awareness and to facilitate building a diverse workforce students as practitioners or thesis students. and a work environment where individual differences are respected and valued. As such, one action is the Entrance In addition, during 2016 Enel Américas, subsidiary of Programme’s management, which seeks to incorporate the Enel Group, participated in the Job Exhibition of the trainee students from technical and professional carreers Economy and Business School of Universidad de Chile, and in situations of physical disability; for such programmes, in the Entrepreneurial Fair Universidad de Chile, and the Job work alliances are made with various foundations and the Exhibition of the Engineer School of Universidad Católica Ministry of Education. de Chile. Our stand received students from Industrial Civil Engineer, Electric Civil Engineer and Business Administration Schools. 60 Enel Américas Annual Report 2016 Educational Action Training Enel América’s training program for 2016 was built and executed on the basis of two main management principles. First of all, to achieve the right balance between educational activities focused on skills development and essencial technical knowledge for the best performance of our employees in their positions, and also the training of behavioral competencies, which will enable our employees to increase their possibilities of development within the Group. The second principle is relates to the training program financing, regarding the needs detection mechanism that enables the identification, together with the collaborator and the manager, of technical and behavioral gaps that needs to be covered, with regards to the individual productivity in the workplace in order to access to possible future development opportunities. The needs detection system is denomintated IDP (Profesional Development Itinerary), whose implementation takes two years. 61 Exchange Transactions 63 64 Enel Américas Annual Report 2016  Exchange Transactions Quarterly transactions in the last three years made in the stock exchanges where the Enel Américas’ shares are traded, in Chile through the Santiago Stock Exchange, the Electronic Stock Exchange of Chile and the Valparaíso Stock Exchange, as well as in the United States through the New York Stock Exchange (NYSE), respectively, which are detailed below. Santiago Stock Exchange During 2016, 6,694 million shares were traded at the Santiago Stock Exchange, equivalent to $858,625 million. The closing price of the stock in December was $108.87. Period 1st Quarter 2014 2nd Quarter 2014 3rd Quarter 2014 4th Quarter 2014 2014 Total 1st Quarter 2015 2nd Quarter 2015 3rd Quarter 2015 4th Quarter 2015 2015 Total 1st Quarter 2016 2nd Quarter 2016 3rd Quarter 2016 4th Quarter 2016 2016 Total Shares 1,623,445,553 1,714,822,877 1,442,088,639 1,374,689,553 6,155,046,622 1,389,153,497 1,579,468,813 1,314,355,177 1,436,751,752 5,719,729,239 1,540,145,250 1,753,142,660 1,232,162,338 2,168,846,180 6.694.296.428 Amount (Pesos) 255,577,682,762 307,339,629,430 282,911,479,797 261,198,495,746 1,107,027,287,735 275,998,191,628 334,826,261,051 250,659,886,643 253,340,302,162 1,114,824,641,484 266,620,137,076 212,677,167,355 140,048,801,925 239,278,798,879 858.624.905.235 Average Price 157.34 179.19 196.47 190.63 180.91 198.83 211.43 191.24 176.50 194.5 172.74 110.85 113.49 110.60 126.92 Electronic Stock Exchange of Chile At the Bolsa Electronic Stock Exchange of Chile a total of 569 million shares were traded in the year, equivalent to $$72,285 million. The closing price of the share in December was $108.55. Period 1st Quarter 2014 2nd Quarter 2014 3rd Quarter 2014 4th Quarter 2014 2014 Total 1st Quarter 2015 2nd Quarter 2015 3rd Quarter 2015 4th Quarter 2015 2015 Total 1st Quarter 2016 2nd Quarter 2016 3rd Quarter 2016 4th Quarter 2016 Total 2016 Units 172,383,389 211,681,096 125,894,077 96,224,747 606,183,309 75,325,511 153,979,478 172,604,478 167,393,236 569,302,703 130,742,124 122,026,677 88,217,958 228,583,097 569.569.856 Amount (Pesos) 27,137,183,296 37,686,041,573 24,592,588,070 18,239,568,492 107,655,381,431 14,893,594,307 33,094,253,771 32,789,265,995 29,438,618,540 110,215,732,613 22,440,123,693 14,581,565,262 10,001,108,374 25,262,018,950 72.284.816.279 Average Price 156.69 178.67 195.60 189.78 180.19 197.37 213.08 193.19 176.32 194.99 172.97 121.46 113.65 111.66 129.94 65 Valparaíso Stock Exchange At the Valparaíso Stock Exchange a total of 120.5 thousand shares were traded in the year, equivalent to $13.5 million. The closing price of the share in December was $110.74. Period 1st Quarter 2014 2nd Quarter 2014 3rd Quarter 2014 4th Quarter 2014 2014 Total 1st Quarter 2015 2nd Quarter 2015 3rd Quarter 2015 4th Quarter 2015 2015 Total 1st Quarter 2016 2nd Quarter 2016 3rd Quarter 2016 4th Quarter 2016 2016 Total Units 0 90,400 0 0 90,400 13,500 0 0 0 13,500 0 0 120,460 0 120.460 Amount (Pesos) 0 16,145,440 0 0 16,145,440 2,660,000 0 0 0 2,660,000 0 0 13,512,912 0 13.512.912 Average Price 178.60 178.60 197.5 197.5 112.46 112.46 New York Stock Exchange (NYSE) The stocks of Enel Américas began to trade in the New York Stock Exchange (NYSE) on October 20, 1993 (at that time, the name of the company was Enersis and the ticker was ENI). One ADS (American Depositary Share) of Enel Amércias represents 50 shares and its current ticker is ENIA. Citibank N.A. acts as a depositary bank and Banco Santander Chile as custodian in Chile. Durign 2016, 216 million ADS were traded in the United States, equivalent to US$2,110 million. The ADS closing price in December was US$8.21. Period 1st Quarter 2014 2nd Quarter 2014 3rd Quarter 2014 4th Quarter 2014 2014 Total 1st Quarter 2015 2nd Quarter 2015 3rd Quarter 2015 4th Quarter 2015 2015 Total 1st Quarter 2016 2nd Quarter 2016 3rd Quarter 2016 4th Quarter 2016 2016 Total Units 44,259,588 38,783,995 34,353,893 31,540,880 148,938,356 31,386,671 52,955,231 46,264,472 60,162,543 190,768,917 58,523,621 59,311,337 45,809,391 52,176,921 215.821.270 Amount (Dollars) 629,442,974 624,044,468 583,933,245 500,827,454 2,338,248,140 499,346,581 915,144,721 646,446,669 755,874,266 2,816,812,237 719,235,235 562,497,059 395,562,633 432,967,188 2.110.262.115 Average Price 14.24 16.10 16.99 15.91 15.81 15.91 17.19 14.09 12.58 14.94 12.35 9.68 8.59 8.32 9.73 66 Enel Américas Annual Report 2016 Market Information During 2016, the stock prices of the Chilean stock market showed an important recovery in relation to the previous year, while the yield IPSA index yield was 12.8% in the year, compared to the negative yield of 4.4% accounted in 2015. This performance was in line with the results of the main global markets, such as New York (12.22%) and London (13.49%), but lower than the main bourses of the region, such as the Lima stock exchange (58.72%), Argentina (45.63%), Brazil (39.15%) and Colombia (19.39%). On the other hand, in 2016 the currencies of the of the countries where Enel Américas operates experienced devaluations in relation to the dollar of the United Stated, while GDP decreased in Argentina and Brazil. Meanwhile, in Chile, Colombia and Peru, the Gross Domestic Product showed an increase. Santiago Stock Exchange The performance of Enel Américas’ stock (traded as Enersis in 2015 and until April 20, 2016) during the last two years compared to the Selective Stock Prices Index (Índice Selectivo de Precios de Acciones, IPSA) in the local market: Variation Enel Américas IPSA 2015 -24.9% -4.4% 01/01/2016 - 04/20/2016(1) 8.9% 8.3% 04/21/2016 - 12/31/2016(2) 15.3% 4.1% (1) Price variation of Enersis’ ADR (ticker ENI), since January 1, 2016 until April 26, 2016 (before the ADR split between ENIA and ENIC). (2) Price variation of Enel Américas’ ADR (ticker ENIA), since April 27, 2016 until December 31, 2016 (after the ADR split). New York Stock Exchange (NYSE) Performance of Enel Américas’ ADRs listed in the NYSE (ENIA) compared to the Dow Jones Industrial Index and the Dow Jones Utilities Index during the last two years: Variation ENIA Dow Jones Industrial Dow Jones Utilities 2015 -24.2% -2.2% -6.5% 01/01/2016 - 04/26/2016(1) 14.2% 3.2% 11.3% 04/27/2016 - 12/31/2016 (2) 11.3% 9.5% 1.0% (1) Price variation of Enersis’ ADR (ticker ENI), since January 1, 2016 until April 26, 2016 (before the ADR split between ENIA and ENIC). (2) Price variation of Enel Américas’ ADR (ticker ENIA), since April 27, 2016 until December 31, 2016 (after the ADR split). 67 68 Enel Américas Annual Report 2016 Dividends 69 70 Enel Américas Annual Report 2016 Pursuant to General Norm N°283, number 5), we transcribe the dividends policies of the company for the periods 2017 and 2016. Dividends Policy for 2017 General Aspects Dividends Policy The Board of Directors of the Company, in session held on The Board of Directors’ intention is to distribute an interim February 24, 2017, approved the following Dividends Policy dividend against 2017 profits, of up to 15% of profits and the corresponding procedure for the dividends payment accounted as of September 30, 2017, as shown in the of Enersis Américas S.A., for the period 2017. financial statements of Enersis Américas S.A. at that date, and payment will be carry out in January 2018. The Board of Directors will propose to the Ordinary Shareholders’ Meeting, to be held during the first quarter of 2018, to distribute a final dividend, an amount equivalent to 50% of the profits of the 2017 accounting period. The definite dividend will correspond to be defined by the Regular Shareholders’ Meeting, to be held during the first quarter of 2018. Compliance of the aforementioned program will be conditioned, in matter pertaining to dividends, to the profits effectively obtained, as well as on the results that forecasts that periodically the Company performs or the existence of certain circumstances, as appropriate. 71 Procedure for Dividends Payment For the payment of dividends, whether provisory or final, Shareholders that don’t have a payment modality registered and in order to avoid their unproper collection, Enel Américas will be paid according to modality No. 4 mentioned above. S.A. considers the modalities indicated as follows: In those cases which checks or bank checks are returned by 1. Deposit in banking checking account, whose account mail to DCV Registers S.A., they will remain under custody holder is the shareholder. until the shareholders withdraw or request them. 2. Deposit in banking savings account, whose account holder is the shareholder. In the case of deposits in banking checking accounts, 3. Send a nominative check or bank check by certified mail Enersis S.A. and/or DCV Registers S.A. may request, for to the shareholder’s residence recorded in the Enel security reasons, verification by the corresponding banks. Américas S.A.’s shareholders’ register; and If the accounts indicated by the shareholders are objected, 4. Withdrawal of the check or bank check at the offices of whether in a prior verification process or for any other cause, DCV Registros S.A., in its capacity as Enel Américas S.A’s the dividend will be paid according to the modality indicated administrator of the shareholders’ register, or in the bank in Point No. 4 mentioned above. or branch offices are determined for such purpose and that will be informed in the notice published regarding On the other hand, the Company has adopted and will the dividends’ payment. continue to adopt in the future all necessary security measures required that is required by the dividends payment For these purposes, checking or savings banking accounts process, in order to safeguard both the shareholders as well can be located anywhere in the country. as Enel Américas S.A. It’s worth to highlight that payment modality chosen by each shareholder will be used by DCV Registers S.A. for all dividends payments, while the shareholder doesn’t express in writing his intention to modify it and thus records a new option. Dividends Policy for 2016 Enel Américas S.A., formerly Enersis Américas S.A. (approved at the Board of Director’s ordinary session held on February 26, 2016 and presented at the Ordinary Shareholders’ Meeting held on April 28, 2016). General Aspects The Board of Directors of the Company, in session held on February 26, 2016, approved the following Dividends Policy and the procedures for payment of Enersis Américas S.A. dividends, for the 2016 accounting period. 72 Enel Américas Annual Report 2016 Dividends Policy The Board of Directors’ intention is to distribute an interim dividend against 2016 profits, of up to 15% of profits Distributable Income of 2016 accounted as of September 30, 2016, as shown in the The distributable income of 2016 is detailed below: Net Income * Distributable Income * Attributable to the controlling shareholder Million $ 383,060 383,060 financial statements of Enersis Américas S.A. at that date, and payment will be carry out in January 2017. The Board of Directors will propose to the Ordinary Shareholders’ Meeting, to be held during the first quarter of 2017, to distribute a final dividend, an amount equivalent to 50% of the profits of the 2016 accounting period. The definite dividend will correspond to be defined by the Regular Shareholders’ Meeting, to take place during the first quarter of 2017. Compliance of the aforementioned program will be conditioned, in matter pertaining to dividends, to the profits effectively obtained, as well as on the results that forecasts that periodically the Company performs or the existence of certain circumstances, as appropriate. Distributed Dividends The following chart shows the dividends per share paid in the last years: N° Dividend 83 84 85 86 87 88 89 90 91 92 93 94 Type of dividend Final Interim Final Interim Final Interim Final Interim Final Interim Final Interim Closing Date 05-06-2011 01-21-2012 05-17-2012 01-19-2013 05-04-2013 01-25-2014 05-10-2014 01-24-2015 05-18-2015 01-23-2016 05-17-2016 01-21-2017 Payment Date Pesos per share 5.87398 1.46560 4.28410 1.21538 3.03489 1.42964 5.27719 0.83148 5.38285 1.23875 3.40599 0.94664 05-12-2011 01-27-2012 05-24-2012 01-25-2013 05-10-2013 01-31-2014 05-16-2014 01-30-2015 02-25-2015 01-29-2016 05-24-2016 01-27-2017 Exercise 2010 2011 2011 2012 2012 2013 2013 2014 2014 2015 2015 2016 73 Investment and Financing Policies 75 The Ordinary Shareholders’ Meeting held on April 28, 2016 approved the Investment and Financing Policy described below. In every paragraph where Enersis Américas S.A. in mentioned, the referral is to Enel Américas S.A. The name change was approved at the Extraordinary Shareholders’ Meeting held on September 28, 2016. Investments Areas of Investment Enersis Américas S.A. will perform investments, according to its bylaws, in the following areas: Contributions to invest in or create subsidiaries and Participation in the Control of Investment Areas associate companies whose activity is aligned, related or In order to control the investment areas and pursuant to linked by any form or type of energy, the supply of public Enersis Américas S.A. corporate purpose, the following utilities, or whose main input is energy. procedure will be pursued whenever possible: Investments related to the acquisition, exploitation, > It will be proposed at the Ordinary Shareholders’ construction, leases, administration, trading and disposal Meetings of our subsidiaries and associate companies the of any class of fixed assets, whether directly or through appointment of directors related to the Enersis Américas subsidiaries. S.A.’s stake in that company, candidates that preferably need to be directors or executives of the Company or its Other investments of all kinds are financial assets, titles or subsidiaries. > The investment, financial and commercial policies will be proposed to the subsidiaries and associate companies, as well as the accounting criteria and systems to be followed. > The management of the subsidiaries and related companies will be supervised. > There will be a permanent control of debt limits. securities. Maximum Investment Limits The maximum investment limits for each investment area are the following: i) Investments in their subsidiaries of the electric system, those required for the fulfillment of the respective corporate purposes, whose maximum amount is equivalent to 50% of the Net Equity accounted in the Consolidated Balance Sheet of Enersis Américas as of December 31, 2015; ii) Investments in other subsidiaries not related to the electricity business, as long as at least 50.1% of the total consolidated assets of Enersis Américas are from the electricity sector. 76 Enel Américas Annual Report 2016  Financing Maximum Debt Level The maximum debt level of Enersis Américas S.A. is 2.20 times of the total debt to equity plus minority interest ratio, based on the consolidated balance sheet. Management Atributions to Agree with Lenders Restrictions related to Dividends’ Distribution Dividends restrictions may only be agreed with creditors if those restrictions were previously approved at the shareholders’ meeting (ordinary or extraordinary). Management Atributions to Agree with Lenders on Granting of Guarantees One of the duties of the Extraordinary Shareholders’ Meeting is to approve the granting of tangible or personal guarantees to cover third parties’ obligations, in relation to the esencial assets detailed further on. Essential Assets for the Normal Operation of the Company The essencial assets for the operation of Enersis Américas are the direct or indirect participation, which enables the control through the ownership of the majority of shares or the existence of shareholders’ agreements or pacts, of Endesa Américas, Enel Brasil and Emgesa. The latter is in force as long as the possible merger of Enersis Américas with Endesa Américas and Chilectra Américas is formalized. If such merger takes place, the esencial assets for the operation of Enersis Américas will be the direct or indirect participation, which enables the control through the ownership of the majority of shares or the existence of shareholders’ agreements or pacts, of Enel Brasil and Emgesa. 77 Company’s Business 79 80 Enel Américas Annual Report 2016  Business Structure *Transmission 81 GENERATIONEnel Generación CostaneraEdesurEnel Generación El ChocónCentral DocksudEGP Cachoeira DouradaEnel Cien*EmgesaEnel Generación PerúEnel Generación PiuraDISTRIBUTIONFortalezaAmplaCoelceCodensaEnel Distribución Perú  Historical Background On June 19, 1981, the Compañía Chilena de Electricidad S.A. In 1988, and in order to successfully face the development created a new corporate structure, which gave birth to a parent and growth challenges, the company split into five business company and three subsidiaries. One of these was Compañía units, which in turn gave birth to five subsidiaries. Out of these, Chilena Metropolitana de Distribucion Electrica S.A. In 1985, Chilectra and Río Maipo were responsible for electricity; under the Chilean government’s privatization policy, the Manso de Velasco was focused on electrical engineering process of transferring the share capital of Compañía Chilena and construction services, plus real-estate management, Metropolitana de Distribucion Electrica S.A. to the private Synapsis in the area of information technology and data sector begun, and ended on August 10, 1987. In this process, processing, while Diprel focused on providing procurement the pension fund management companies (AFPs), company and trading of electrical product. employees, institutional investors and thousands of small shareholders joined the Company. Its organizational structure The Company went through a corporate reorganziation was based on activities or operative functions whose results process that started in April 2015 and ended in December were evaluated functionally and its profitability was limited 2016. This process consisten on the division of the electricit by a tariff structure as a result of the Company’s exclusive generation and distribution activities developed in Chile, dedication to the electricity distribution business. from those performed in the rest of the countries. As such, In 1987, the company’s board proposed forming a division activities in Argentina, Brazil, Colombia and Peru, and Enel Enel Américas S.A., the continuing company of Enersis with for each of the parent company’s activities. Then four Chile S.A. were born. subsidiaries were created to operate as business units with its own objectives, thus expanding the company’s activities Today Enel Américas S.A. is one of the largest private electricity towards other non-regulated activities but linked to the main companies in Latin America, in terms of consolidated assets business. This division was approved at the Extraordinary and operating revenues, which has been accomplished Shareholders’ Meeting of November 25, 1987 thus defining through steady and balanced growth in its electricity its new corporate purpose. With this, Compañía Chilena businesses: generation, transmission and distribution. Metropolitana de Distribucion Electrica S.A. became an investment holding company. On August 1, 1988, as agreed at the Extraordinary Shareholders’ Meeting held on April 12, 1988, one of the companies born from the division changed its name to Enersis S.A. At the Extraordinary Shareholders’ Meeting held on April 11, 2002, the company’s corporate purpose was modified, introducing telecommunications activities and the investment and management of companies whose businesses are in telecommunications and information technology, and Internet trading businesses. 82 Enel Américas Annual Report 2016  Expansion and Development Enel Américas began its international expansion in 1992 when participating in different privatization processes in Latin America, thus developing a significant presence in the electricity sectors of Argentina, Brazil, Colombia and Peru. 1992 1994 > On May 15, the Company acquired a 60% shareholding > In July, Enel Américas acquired 60% share capiral of and control of Central Costanera generation company, Empresa de Distribución Eléctrica de Lima Norte S.A., currently Enel Generación Costanera, located in Buenos Edelnor (currently Enel Distribución Perú), in Peru, Aires, Argentina. for US$176 millones. Also the Company acquired > On July 30, the Company was awarded 51% of Empresa Edechancay, another electricity distribution company in Distribuidora Sur S.A., Edesur, a company that distributes that country, which was later absorbed by the former. electricity in the city of Buenos Aires, Argentina 1993 1995 > In July, the Company acquired Hidroeléctrica El Chocón > Additionally, the Company acquired the generation Generation Company, located in the province of Neuquén company generadora Edegel (currently Enel Generación and Río Negro, Argentina. Perú), in Peru. > On December 12, acquired an additional 39% of Edesur. 83 1996 1998 > On December 20, Enel Américas entered in the Brazilian > On April 3, Enersis (currently Enel Américas) again market with the acquisition of a large portion of shares invested the Brazilian market, this time being awarded in the previously called Companhia de Eletricidade do 89% and control of Companhia Energética de Ceará Río de Janeiro S.A., Cerj, a company that distributes S.A., Coelce, company distributes electricity in the electricity in the city of Río de Janeiro and Niteroi, Brazil. northeast region of the country, in the state of Ceará for Its current name is Ampla Energía e Serviços S.A. US$868 million. > On December 20, the Company acquired a 99.9% shareholding in Central Hidroeléctrica de Betania S.A. E.S.P, in Colombia. 1999 1997 > Endesa, S.A. (Spain), took control of Enersis (today Enel Américas). Through a public share offering (OPA), Endesa acquired an additional holding of 32% in Enersis, > On September 5, Enersis acquired for US$715 million which, together with the 32% already acquired in August a 78.9% shareholding in Centrais Elétricas Cachoeira 1997, resulted in a total holding of 64%. This transaction, Dourada (currently Enel Green Power Cachoeira completed on April 7,1999, involved an investment of Dourada), in Brazil. US$1,450 million. As a result of the capital increase > On September 15, Enel Américas (at that time, Enersis) made by Enersis in 2003, this shareholding reduced to successfully participated in the capitalization of Codensa the current 60.62% S.A. E.S.P., acquiring a shareholding of 48.5% for > On May 11, Enersis (currently Enel Américas) acquired US$1.226 million, company that distributes electricity in 35% of Endesa Chile (today Enel Generación Chile), in the city of Bogotá and the department of Cundinamarca, addition to the 25% already held, thus reaching 60% Colombia. It was also awarded 5.5% of Empresa shareholding in the generation company. It therefore Eléctrica de Bogotá. consolidated its position as one of the main private > On September 15, the Company acquired a 75% electricity companies in Latin America. shareholding of Emgesa, a Colombian generation company, and an additional 5.5% of Empresa Eléctrica de Bogotá S.A., with a total investment of US$951 million. > Endesa, S.A. (Spain) acquired 32% of Enersis (currently Enel Américas). 84 Enel Américas Annual Report 2016 2000 2005 As part of the Genesis Plan strategy, the subsidiaries > The subsidiary Endesa Brasil S.A. (today Enel Brasil) was Transelec, Esval, Aguas Cordillera and real estate assets formed with all the assets held in Brazil by the Enersis were sold for US$1,400 million. Group and Endesa Internacional (later it was absorbed by Enel Iberoamérica): Enel Cien, Fortaleza, Enel Green Power Cachoeira Dourada, Ampla, Investluz and Coelce. 2001 > The Company performed large investments this year: US$364 million for increasing the shareholding 2006 in Chilectra (today Enel Distribución Chile), US$150 > In February, Enersis acquired for approximately US$17 million in the acquisition of 10% of the share capital million the Termocartagena (142 MW) combined cycle of Edesur, in Argentina, a percentage that was held by power plant in Colombia, which operates with fuel oil or the company’s employees; US$132 million to increase gas. its shareholding in Ampla, in Brazil; US$23 million to > In June, Edegel (currently Enel Generación Perú) and increase its shareholding by 15% in Río Maipo, in Chile, Etevensa were merged, the latter a subsidiary of Endesa and US$1.6 million to increase its shareholding by 1.7% Internacional (later was absorbed by Enel Iberoamérica) in Distrilima, in Peru. in Peru. 2002 2007 > In Brazil, Central Termoeléctrica Fortaleza, located in > In September, the merger of the Colombian generating the state of Ceará, was awarded to the Company. companies, Emgesa and Betania was completed. Additionally, the commercial operation of the second > On October 11, ENEL S.p.A. and ACCIONA, S.A. phase of the electricity interconnection between took control of Enersis through ENDESA S.A. and Argentina and Brazil, CIEN, completing a transmission Endesa Internacional, S.A. (later was absorbed by Enel capacity of 2,100 MW between both countries, began. Iberoamérica S.R.L.) 85 2009 2011 > The companies Acciona, S.A. and Enel S.p.A. announced > In August, Endesa, S.A. informed through a Significant an agreement whereby Acciona, S.A. will directly and Event, entering into an agreement for Endesa indirectly transfer to Enel Energy Europe S.L. the Latinoamérica S.A. (100% owned by Endesa, S.A.) to 25.01% shareholding in endesa, S.A. As such, Enel acquire 7.70% stake owned by EDP Energias de Portugal Energy Europe S.L., controlled 100% by Enel S.p.A., will S.A. in Endesa’s Brazilian subsidiaries Ampla Energia thus hold 92.06% of the share capital of Endesa, S.A. e Serviços S.A. and Ampla Investimentos e Serviços > On June 25, the agreement between Enel S.p.A. and S.A. for Euro 76 million and Euro 9 million, respectively. Acciona, S.A. came into effect whereby Enel became After these acquisitions, the Endesa Group will control the controller of 92.06% of the share capital of Endesa, 99.64% of the share capital of both companies. S.A. > On October 9, Endesa Chile (today Enel Generación Chile) acquired 29.3974% of the Peruvian generation subsidiary Edegel (currently Enel Generación Perú). The shares were acquired at market price from Generalima S.A.C., a company which in turn is a subsidiary of Endesa Latinoamérica S.A. Endesa Chile thus now holds directly and indirectly 62.46% of the shares of Edegel. > On October 15, Enersis S.A. (today Enel Américas) acquired 153,255,366 shares, representing 24% of the share capital of its Peruvian subsidiary Enel Generación Perú (formerly Edegel), at a price of 2.72 soles per share. This was purchased from Generalima S.A.C., a Peruvian subsidiary of Enel Latinoamérica S.A., the parent company of Enersis. With this transaction, the direct and indirect shareholding of Enersis S.A. in Edelnor rose from 33.53% to 57.53%. 2010 > Enersis (today Enel Américas) accepted the offer of the company Graña y Montero S.A.A., to acquire its entire direct and indirect shareholding in its subsidiary Compañía Americana de Multiservicios Limitada, CAM; and in the same way, accepted the offer presented by Riverwood Capital L.P to acquire the entire direct and indirect shareholding in its subsidiary Synapsis Soluciones y Servicios IT Ltda. The price offered for CAM and its subsidiaries in Argentina, Brazil, Colombia and Peru amounted to US$20 million. In the case of Synapsis, the price offered for the company and its subsidiaries in Argentina, Brazil, Colombia and Peru amounted to US$52 million. 86 Enel Américas Annual Report 2016 2012 9,967,630,058 shares of Enersis S.A. at a price of Ch$ 173 per share, 3) Placement share price: A fixed price of Ch$173 for every payment share to be issued as a result > In July, through a Significant Event submitted to of the capital increase. the Superintendence of Securities and Insurance (SVS), the Board of Directors of Enersis (today Enel Américas) informed the decision to convene an Extraordinary Shareholders Meeting which will take place on September 13, with the purpose of resolving, 2013 among other matters, the capital increase of the > Capital Increase: With an historic result for this Company for the equivalent in Chilean pesos, of up to type of operation in the local market, Enersis (today US$8.020 millones or the amount that the Extraordinary Enel Américas) shareholders subscribed a total of Shareholders Meeting determines. In early August, approximately US$ 6,022 million, a placement of 100% the SVS stated that the Board of Enersis must adopt of the shares available for the capital increase. the actions necessary to strictly comply with the > In July, the new Malacas 185 MW power plant was conditions established by Articles 15, 67 and Title XVI commissioned in Piura, Peru, company owned by of Law 18,046 (Corporations Law), considering that Empresa Eléctrica de Piura (EEPSA) part of the Enersis they are complementary and when applicable should Group (today Enel Group). This new power plant required be considered simultaneously. These conditions are an investment of US$105 million. related to capital increase transactions and related > On November 6 the first modernised unit of Salaco party transactions respectively. Once the indications project in Colombia was commisioned, corresponding to of the SVS were acknowledged, Enersis adopted them unit 2 of the run-of-the-river Darío Valencia Samper plant, and continued with the capital increase operation. The with an installed capacity of 50MW. This unit generated Board of Directors resolve postponing the Extraordinary 46.3GWh since it’s commissioning until midnight, Shareholders Meeting to take place September 13 to a December 31st. later date to be determined opportunely. After strictly complying with the conditions established by Articles 15, 67 and Title XVI of Law 18,046 (the Board of Directors requested the independent valuation by IM Trust and the Directors Committee requested the independent valuation of Claro y Asociados Ltda., the Directors Committee issued its report and each Director gave his opinion with respect to the proposed operation), the Extraordinary Shareholders Meeting held on December 20 ruled on the capital increase. A very large majority, almost 86% of all shareholders present with voting rights, equivalent to 81.94% of the total shares with voting rights of the Company, approved the capital increase of the following characteristics: 1) Maximum amount of the capital increase: Ch$ 2,844,397,889,381, divided into 16,441,606,297 ordinary nominative payment shares of the same series, with no preferences and no par value, 2) Value of non-in-kind contributions to be capitalized: The total issued capital of Cono Sur, Company that will concentrate the activities that are identified in the reports that have been made available to the shareholders and that would be contributed by Endesa to Enersis S.A., will amount to Ch$ 1,724,400,000,034 corresponding to 87 2014 > Public Tender Offer for the shares acquisition (OPA) of Coelce. On January 14, Enersis (today Enel Américas), which until then controlled 58.87% of its subsidiary Coelce, launched a voluntary OPA of all series of shares issued by Coelce at a price of R$49 per share. With this, Enersis acquired 3,002,812 common shares, 8,818,006 preferred shares type A and 424 preferred shares type B, equivalent to an investment of approximately US$243million. After the operation, the company obtained a 74.05% direct and indirect interest in Coelce. > In April, Enersis (today Enel Américas) closed an acquisition agreement for the purchase all the shares that Inkia Américas Holdings Limited indirectly had of Generandes Perú S.A., equivalent to a 39.01% stake, whose investment amounted to US$413million. The transaction ended in September, and as a result Enersis reached 58.60% shareholding of Edegel (today Enel Generación Perú). > On July 31, 2014, Enel Energy Europe S.R.L., currently Enel Iberoamérica SRL, controller of Endesa S.A. (92.06% share) proposed the acquisition of 100% of the share capital of Endesa Latinoamérica S.A. The transaction was completed in October 2014, and as a result Enel S.A. reached the direct control of Enersis (today Enel Américas) with 60.62%. 2015 > On April 28, 2015, the Board of Directors of Enersis (currently Enel Américas) agreed to initiate the studies for a possible corporate reorganization to divide the generation and distribution activities in Chile from the rest of the activities developed abroad by Enersis and its subsidiaries Endesa Chile and Chilectra (today Enel Américas). > On November 16, 2015, the commissioning of El Quimbo power plant, a 400 MW hydro facility in Colombia took place, after five years of contruction. > On December 18, 2015 the Extraordinary Shareholders Meeting took place, where the shareholders of the Company approved the corporate reorganziation of Enersis and its subsidiaries Endesa Chile and Chilectra (today Enel Américas). 88 Enel Américas Annual Report 2016 2016 > On March 1, the non-material Division of the former > On September 29 started the period to exercise the Enersis, Endesa and Chilectra was made, as a result Withdrawal Right of dissenting shareholders. The of which Enel Chile, Endesa Américas and Chilectra established prices were the following: Enersis Américas Américas were born. $112.02 pesos, Endesa Américas $299.64 pesos and > On April 21, 2016, shares’ Division of Enersis, Endesa and Chilectra Américas $472.79 pesos. The period to exercise Chilectra became effective, and the resulting companies the Withdrawal Right ended on October 28. - Enersis Américas, Enersis Chile, Endesa Américas, > On December 1, the name change of Enersis Américas Endesa Chile, Chilectra Américas and Chilectra Chile – to Enel Américas took place, after the intangible merger began trading at the Santiago Stock Exchange. Likewise, with the companies Endesa Américas and Chilectra the ADR’s ENIA, ENIC, EOCA and EOCC began trading on Américas. April 27 the same year at the New York Stock Exchange. > On November 30 it was announced that the Company (NSYE). presented the best offer for the acquisition of the > On September 28, the Extraordinary Shareholders’ electricity distribution company CELG-D, which was Meeting took place at the Enersis Stadium, where the performed within a bidding process arranged by the Merger of Enersis Américas, Endesa Américas and Brazilian Government through Banco Nacional do Chilectra Américas was approved, and comprised the Desenvolvimento. The offer presented by our subsidiary following: on the part of Enersis Américas, it absorb Enel Brasil amounted to 2,187 million Brazilian reais. Endesa Américas and Chilectra Américas. The main > On December 29 Endesa Américas and Chilectra Américas purposes of The Merger were: 1) Align every investment ceased trading at the Santiago Stock Exchange and the interests in generation and in distribution in the scope New York Stock Exchange, in the ADR form. As such, the of Latin America; 2) Create a simpler structure with Company proceeded with the exchange of shares and greater visibility, and eliminate the cross participations; 3) the merger is performed. Greater efficiency and dynamism in the decision making processes, costs reduction and remove any potencial conflicts of interest. > On September 13 the Public Tender Offer for the shares acquisition (OPA) for the shareholders of Endesa Américas was launched. The price was $300 pesos per share. This operation ended on October 28. 89 Investments and Financial Activities 91 92 Enel Américas Annual Report 2016  Material Investments Related to the Compay’s Investment Plan We coordinate the overall financing strategy of our subsidiaries and intercompany loans, in order to optimise debt management, in addition to the terms and conditions of our funding. Our subsidiaries develop independent capital investment plans that are funded by funds generated internally or by direct funding. One of our goals is to focus on those investments that will yield long-term benefits, such as projects to reduce energy losses. Additionally, focusing on Enersis group and seeking to provide services to all companies in the group, our goal is to reduce investment at the individual subsidiary companies in elements such as procurement systems, telecommunications and information systems. While we have studied how to finance these investments as part of the budget process of the Company, no particular financing structure has been committed and our investments will depend on market conditions at the time they need to get the cash flow. Our investment plan is flexible enough to adapt to the changing circumstances by giving different priorities to each project according to its profitability and strategic consistency. Investment priorities are currently focused on developing the works plan in Peru and Colombia. For the period form 2017 to 2019, we expect to spend Ch$ 2,755 billion on a consolidated basis, in investments in the subsidiaries we control, and related to investments currently under development, the maintenance of our distribution networks, maintenance of existing generation plants, and the studies required to develop other potential generation projects. The table below shows the capital expenditures expected to carry out from 2017 to 2019 and the capital expenditures incurred by our subsidiaries in 2016, 2015 and 2014. Abroad Investment (1) (million Ch$) 2017-2019 2,754,744 2016 (1) 831,704 2015 (1) 1,362,561 2014 (1) 1,089,362 (1) Capex figures represent the effective payments for each year, with the exception of future forecasts. 93  Investments in 2016, 2015 and 2014 Our capital expenditures in the last four years were mainly related to El Quimbo project (400 MW) in Colombia, as well as the maintencance of the existing installed capacity. El Quimbo project began commercial operations on November 16, 2015. In December 2014, the optimization of Salaco project was completed, adding 145 MW to the Colombian grid. In 2015 started the investments in the Malacas TG6 project, which comprises the replacement of three turbines for more efficient ones that operate with gas. Additionally, we also invest for these purposes: (i) expand our distribution service to cope with the growing electricity demand, (ii) improve the quality of service, (iii) improve safety, and (iv) reduce energy losses, mainly in Brazil. The aforementioned capital investments were financed as follows: > El Quimbo: Local and international bond issuances. > Salaco: Funds generated by the Company. 94 Enel Américas Annual Report 2016  Generation Our capital expenditures in generation amounted to $197 billon in 2016, and $447 billion in 2015. In Colombia and Peru, we continue investing in studies and the development of the projects pipeline both hydro and thermoelectric projects. In Colombia, our main investment in expansion was concentrated in the commissioning of 400 MW El Quimbo hydroelectric project, which is currently operating. In Peru, during 2016 investments were allocated to the substitution of Malacas thermo power plant’s turbines for more efficient ones that operate with gas. Distribution During 2016 the Company made investments of $624 billion, mainly to meet consumption needs, resulting from the growth of population and the entrance of new customers, through investments not only related with them, but also in capacity increases and strengthening of the High (HT), Medium (MT) and Low Tension (MT) facilities of the companies. On the other hand, in 2015, investments amounted to $600 billion, in order to meet consumption needs that result from the incease of population and new clients, and also to improve the quality of service. In 2016 Edesur in Argentina made investments for $132 billion to meet the growth of demand and improve the quality of service. These investments allowed the Company to accomplish several golas: complete the expansion of Caballito substation, restoration of 54 kilomeers of medium and low voltage electricity grids, 150 new transformation centers, 21 new transformation MT/BT centers. In Perú, Edelnor performed investments for a total of $83 million pesos mainly focused mainly in satisfying demand growth, seeking to reinforce security of the Medium and Low Voltage feeders. In Brazil, total investments reached $283 billion pesos. In particular, Enel Rio performed investments for a total of $178.7 billion pesos, mainly focused on energy losses reduction and in energy losses reduction projects. Furthermore, the company invested in control systems through the use of technology and social activities. In the case of Enel Ceará, investments reached $104,1 billion pesos with the purpose of meeting the grid needs and connection of clients. Additionally, the investments needed to endure the sustained demand growth of the State of Ceará in the last years, also including projects for the electric charge increase. In Colombia, total investments amounted to $143 billion pesos mainly focused in projects that improves the quality of service through the normalization, modernization and telecontrol of grids, and also the works required to meet the growth of demand, the repowering of circuits, safety of operations, control of energy losses and issues related with technology, properties and legal requirements. Worth is to highlight the progress of Nueva Esperanza Substation, project that implies a total investment of $22 million; as such the continuity of the Public Lighting Modernization Project will include installation of LED lighting and halides in Bogota. 95  Financial Activities Finance 2016 was a year marked by important regional and global Finally, Peru was the country where Enel Américas operates that political events for Latin America, and particularly for showed the highest annual economic expansion rate, accounting our relevant markets, and the year was also flagged my a yearly growth of 3.9% in 2016, strongly driven by the mining mixed economic development, in line with the individual sector. The country went through a change in government in development of each countries where Enel Américas 2016, who has expressed to be market-friendly and willing to operates. promote the economic development of the country. In Argentina, during 2016 several reforms were issued Latin American economies have also been impacted by the towards greater trade openness and increase of economic and political evolution of the developed markets, transparency, which among other measures meant the mainly from the United States. This country has strenghthen its liberalization of the exchange rate regime and the efforts economy during 2016, accounting an annual positive variation made by the government to negotiate the external debt of of its gross domestic product of 1.6% during 2016, primarily the country, which supported the return of Argentina to the boosted by consumption, which was shown in the robust international markets, after years of not having access to labor market. Nevertheless, the Presidential elections in the external financing. United States triggered important volatility in the financial markets around October, thus impacting the emerging During 2016 Brazil showed an ongoing recession where GDP currency markets. Towards the end of the year, the Federal decreased 3.6% in the year, revealing a gradual adjustment Reserve decided to raise the monetary policy rate in 25 basis of the economy towards an internal product slightly better points, reaching a band in the range of 0.5% and 0.75%, which than 2015, year where the activity fell 3.8%. Brazil was also prompted depreciation of some emerging markets’ currencies. impacted by political instability, where the President of the Republic was removed towards the middle of the year due The financial markets kept open in the countries where Enel to her relation to corruption cases. Américas has presence, which enabled its subsidiaries to have access to the resources required to finance its projects In Colombia, 2016 was a year of high inflation, even over and investments and also to continue with debt refinancing, 8%, which led monetary policy up to 7.75%, thus affecting thus complying with a policy that promotes the control of the local financing cost. During the second half of the year, financial risks. Likewise, Enel Américas was able to perform the vote in a referendum over the peace process took place, a bond issuance in the United States market, a Yankee Bond wich contributed with more uncertainty with regards to the that amounted to US$600 million, which enjoyed high demand, future development of the country. Colombia accounted a demonstrating the interest of the international investors 2% growth in 2016. community in the company. 96 Enel Américas Annual Report 2016 Main Completed Financial Operations Brazil Peru Ampla and Coelce closed a financing from Banco Nacional In March, Enel Distribución Perú (former Edelnor) performed de Desenvolvimento Econômico e Social (BNDES), for the a local bond issuance for 105 million Peruvian nuevos development of its investment program for 2014 and 2015 soles (US$32 million, approximately). Likewise, in July the totalling US$ 177 million. company performed a new bond issuance for 100 million Peruvian nuevos soles (US$30 million, approximately). Finally, Ampla contracted two loans with international banks for the Company made a third bond issuance for 72 million a total amount of US$ 120 million approximately, US$ 75 Peruvian nuevos soles (US$21 million, approximately). The million of which are guaranteed by Enel Américas. Likewise, purpose of these bond issuances was liabilities refinancing. the Company renewed its committed credit lines for US$ 30 Likewise, Enel Distribución Perú (former Edelnor) obtained million, approximately. a bank loan for US$15 million, approximately. Coelce renewed its committed credit for US$ 15 million. Enel Generación Perú (former Edegel) signed a bank loan for Colombia US$22 million. Enel Generación Piura (former EEPSA) contracted a bank leasing for US$54 million to finance the acquisition of a new Emgesa performed a local bond issuance in February for turbine. a total of 525,000 million Colombianos pesos (US$175 million, approximately). Likewise, in September the company perfomed a new bond issuance for 300,000 million Colombian pesos (US$100 million). These funds Enel Américas Holding were used for liabilities refinancing and investments Enel Américas signed, during the first quarter of 2016, a financing. committed revolving facility for UF 2.85 million (US$ 100 million, approximately) with a consortium of banks. Codensa signed two bank loans for a total amount of 362,000 million Colombian (US$120 million), used mainly As part of its corporate reorganziation process, Enel Américas for liabilities refinancing and investments financing. closed two operations for the secured financing of this reorganization process. First, the Company signed a Senior In October, Codensa merged with DECSA and Empresa Unsecured Term Loan Agreement with a consortium of five Eléctrica de Cundinamarca (“EEC”), with the purpose international banks, for US$1,500 million, with one tranche in of achieving synergies in the local distribution business. Chilean pesos and the other in dollars. This transaction involved a capital increase in wich Enel Américas contributed with a share equivalent to its In October, Enel Américas placed a Yankee Bond in the North participation in the company. In accordance with the above, American market for a total of US$ 600 million, 10 year-term the assets and liabilities of EEC began to be consolidated and coupon rate of 4%, meaning a spread over benchmark by Enel Américas. of 245 basis points. This bond proceeds were used in part for liabilities refinancing. 97 Coverage Policy Exchange Rate The exchange rate hedging policy of the Group is based on cash flows and seeks to maintain a balance between flows indexed to foreign currency, and the levels of assets and liabilities denominated in that currency. The goal is to minimise the flows’ risk exposure from changes in exchange rates. As part of this policy, the Enel Américas contracted forwards for US$300 million approximately to cover the flows in different currencies coming from foreign subsidiaries. Likewise, in December the Company completed the acquisition of the Brazilian distribution company CELG, as part of the assets privatization process of the electricity sector in Brazil, for a total amount of $2,187 million Brazilian reais. This acquisition was financed with funds provided by Enel Américas, and the exchange rate risk was covered with forward contracts. Enel Américas, as part of the reorganization process, decided to change its functional currency from the Chilean peso to the US dollar. As such, part of the cash of the Company was covered to make the conversion of Chilean pesos into US dollars, for a total amount of US$750 million approximately. Overall, Enel Américas operated forward derivatives contracts for more than US$ 1,700 million during 2016. Interest Rate The Group’s policy is to maintain levels of fixed and protected debt over total net debt within a band of plus or minus 10% compared to the ratio established in the annual budget. In case of any deviation from the budget, hedging transactions were made, based on market conditions. At the closing date in December, consolidated fixed debt plus protected debt in relation to net bebt was 44%. 98 Enel Américas Annual Report 2016 Credit Risk Rating On November 9, 1994, Standard and Poor’s and Duff & Phelps rated Enersis (today Enel Américas) for the first time at BBB +, that is, an investment grade company. Later, in 1996, Moody’s rated the company’s foreign currency long- term debt at Baa1. Over time, most credit ratings have changed. Currently, they are all “investment grade”, which is based on the diversified portfolio of assets, liquidity and adequate policies of debt coverage service. In summary, we hereby highlight the following main events that took place in 2016: On February 3, 2016, Standard & Poor’s rated Enersis Américas (currently Enel Américas) and assigned a “BBB” rating with stable outlook in international scale. This is within “investment grade” rating. This credit opinion was later confirmed on February 23 and December 1, 2016. Afterwards, on March 2, 2016, Fitch Ratings rated Enersis Américas (currently Enel Américas) and assigned a “BBB” rating in international scale and “AA” in national scale. Outlook is stable. This rating was later confirmed on September 28 and November 30, 2016. On the other hand, on April 4, 2016 Feller Rate rated Enersis Américas (today Enel Américas) in national scale rating. The assigned rating was “AA-” with stable outlook. This credit opinion was later confirmed on July 7, 2016. Finally, the crisk credit agency Moody´s reviewed and confirmed the corporate rating of Enel Américas on December 30, 2016, and assigned “Baa3” rating. Outlook is stable. Ratings are supported by the Company’s diversified portfolio of assets, strong credit parameters, adequate debt structure and high liquidity. 99 International Ratings Enel Américas Corporate S&P BBB / Negative Moody’s Baa3 / Stable Fitch Ratings BBB / Stable Property and Insurance Local Scale Rating Enersis Stocks Bonds Feller Rate 1st class, Level 2 AA- / Stable Fitch Ratings 1st class, Level 1 AA- / Stable Humphreys 1st class, Level 1 AA / Stable Enel Américas is attached to a global risk coverage program, led by its parent company Enel, in areas such as material damage, terrorism, business interruption and legal liability. The renewal process of these insurance contracts was carried out through an international bidding, where the main leading insurance companies worldwide were invited to participate. The contracts were renewed on November 1, 2016 through October 31, 2017. 100 Enel Américas Annual Report 2016  Brands The company has registered “Enersis” and “Enersis The brand “Enel Américas” is under registration process. Américas” brands for products, services, industrial and commercial facilities. Suppliers, Customers and Main Competitors Enel Américas S.A. is a “holding” company that mainly operates in the field of electricity generation and distribution in Latin América, so the Company considers the following suppliers, customers and competitors as the most relevant ones for its main subsidiaries. Accordingly, the Company established that its main suppliers, customers and competitors are the following: > Argentina: Argencobra S.A., Rowing S.A., Mors S.A., Castanhao EB Canal Intergraca, Companhia Brasileira de Kioshi S.A., Nizza Davidson Ing. y Obras S.R.C., Duro Distribucao, Compania de Bebidas das Américas Ambev, Felguera Arg. S.A., Masa Arg S.A., Mole All Services S.A., Engie, Chesf, Cemig Geracao, Furnas, Petrobras Pie. DF Services-Mosa Oper Int. S.L., Mitsubishi Corporation, Wartsila Services Switzerland Ltd., IMC SRL-MEI SRL- > Colombia: Transportes C&F, Transportes Especializados UTE, Turismo Patagonia S.A., Zeppilli, Enrique Félix, JR S.A.S, Corporación de Taxis de Colombia S.A., Cam Jobras S.R.L., Gobierno de la Ciudad de Buenos Aires, Colombia Multiservicios S.A.S, Consorcio Mecam., Deltec Municipalidad de Quilmes, Telefónica Argentina S.A., S.A., Villa Hernández y Compañía S.A.S, Obras y Diseños Metrovías S.A., Coto C.I.C. S.A., Minera Cumbrera, S.A., Electrificadora del Caribe S.A., Compañía Eléctrica Chevron Argentina, Petroquímica Comodoro Rivadavia, de Tolima, Empresas Públicas de Medellín, CENS S.A. SADESA, AES, Pampa, Petrobras, YPF Energ (Ex ESP, Electrificadora del Huila, Alumbrado Público Distrito Pluspeteg). Capital, Corporación de Abastos de BTA S.A., Primadera S.A.S., Desarrolladora Fontanar SAS, Carbones Rodríguez > Brazil: Compel-Const. Mont. Proj. Elet Ltda., Soter Soc. y Cia SCA. Italcol, Empresas Públicas de Medellín E.S.P, Tecnica de Engenharia S.A., Medral Serv. e Infraestrutura Isagen S.A. E.S.P., A.E.S. Chivor & Cia. S.C.A. E.S.P, Ltda., Endicon Engenharia de Instalacoes, Pers. Serv RH Gecelca S.A. E.S.P., Empresa de Energía del Pacífico S.A. e Asses Empresarial, Endicon Engenharia de Instalacoes, E.S.P., Isagen, Electricaribe S.A. E.S.P., Dicel. Cosampa Servicos Eletricos Ltda., Dinamo Engenharia Ltda. E.P.P., B& QEnergia Ltda., Consorcio CCELPS > Peru: Siemens S.A.C, Confipetrol Andina S.A., Siemens Energia, Bolt Serv. e Comizacao Ener. Ltda, BTG Pactual Energy Inc., Servicios Generales Hidráulicos, Andritz Empresa Operadora do Mercado Energetico, Porto do Hydro AG, Indeco S.A., Hermes Transportes Blindados Delta Energia, EDP Comercializ. e Serv. de Ener., Voith S.A., Compañía Americana de Multiservcios, Tyco Hydro Ltda., Ge Global Parts & Products GMBH, Cia. Electronics del Perú S.A.., CAM Servicios del Perú S.A., Gestao dos Recursos Hidricos, Alstom Energia Termica Vorantim Metais Cajamarquilla, Luz del Sur, Minera e Ind. Ltda., Mckinsei & Company, Cagece, Ferbasa, Chinalco Perú, Hudbay Perú, Cerámica Lima S.A., Lima Volkswagen, Ajinomoto, Johnson Controls, Bunge, Airports Partners SRL, Compañía Industrial Nuevo Energiza Fazenda Nova Friburgo Dist. De Energia, Cedae, Mundo S.A., Tecnología Textil S.A., Gym Ferrovias S.A. OI (Telemar), Cooperativa de Eletrificacao Rural Cachoeira (Line 1 of the Lima Metro), Engie, Kallpa Generación, de Macacu Itaborai, Cagece de Agua e Esgoto Ceara, Electroperú, Fenix Power, Duke Energy, Stakraft, Cía. Ceara Portos Cia de Int. Port. do Ceara, Cogerh EB Eléctrica Santa Rosa. 101 102 Enel Américas Annual Report 2016 Risk Management Policy 103 104 Enel Américas Annual Report 2016  Risk Management Policy The companies in the Enel Américas Group are exposed to determined risks that it manages through the system application of identifying, measuring, limiting concentration and supervision. Some of the basic principles defined by the Group in the establishment of their risk management policy are: > Comply with the norms of good corporate government. > Strictly complying with the normative system of the Group. > Each business and corporate area defines: I. The markets where the Company can operate in relation to the knowledge and sufficient capabilities to ensure effective risk management. II. Criteria on counterparts. III. Authorized Operators. > The business and corporate areas established for each market in which they operate their predisposition to coherent risk with the defined strategy. > Every business operations and corporate areas are performed within the approved limits in every case. > The business, corporate areas, lines of business and companies establish risk management policies necessary to ensure that the market transactions are completed according to policy, norms, and procedures of Enel Américas. Interest Rate Risk Interest rate variations modify the reasonable value of those assets and liabilities that bear a fixed interest rate, and also the aforementioned future active and passive flows at a variable interest rate. The objective of risk management of interest rates is to reach a debt structure equilibrium that allows a minimization of debt cost with a reduced volatility in the income statement. Dependiendo de las estimaciones del Grupo y de los objetivos de la estructura de deuda, se realizan operaciones de cobertura mediante la contratación de derivados que mitiguen estos riesgos. Currently, the instruments used are interest rate swaps that sets variable rate to fixed rate. The comparative structure of the financial debt that Enel Américas Group has, according to the fixed interest rate and/or protected by the total gross debt, after contracted derivatives, is the following: Gross Position Fixed interest rate 12-31-2016 % 44% 12-31-2015 % 30% 105  Exchange Rate Risk Commodities risk The exchange rate risks fundamentally correspond to the The Enel Américas Group is exposed to commodities price following transactions: variation risks, fundamentally through the: > Debt contracted by the Group’s companies denominated in > Fuel Purchases in the process of electricity energy a different currency of which the flows are indexed. generation. > Payments to be made due to the acquisition of materials > Energy buying and selling operations are carried out in local associated to projects and corporate insurance policy markets. payments being made in a different currency of which the flows are indexed. With the objective of reducing risk in situations of severe > Revenues of the companies of the Group that are directly drought, the Group has designed a commercial policy linked with the evolution of currencies not related to the defining the level of commitment of energy sales according companies’ flows. to the capacity of the generation power plants in a dry year, > Flows from the subsidiaries abroad to the head offices in including risk mitigation clauses in some contracts with free Chile, which are exposed to exchange rate variations. clients. For the case of regulated clients, they are subjected to a long-term biddings process, and indexing polynomials With the objective of mitigating the exchange rate risk, are determined that allow the reduction of commodities Enel Américas’ hedging policy for exchange rates is based exposure. on cash flows and contemplates to maintain equilibrium between the flows indexed in dollars and the levels of assets Considering the operative condition that faces the electricity and liabilities denominated in that currency. The objective is generation, hydrology, and commodities price volatility in to minimize the exposition of the cash flows to variations in the international markets, the Company is permanently the exchange rates. verifying the convenience of taking coverage positions to reduce the impacts of price variations in results. On The instruments currently being utilized to give fulfillment to December 31, 2016, there were operations of purchase the policy corresponding to currency swaps and exchange future energy contacts 69.84 GWh, for the period January- rate forwards. At the same time, the policy seeks to December 2017. These purchases back up an energy-selling refinance debt in the functional currency of each company. contract in the wholesale market. On the other hand, future energy sales were backed up for 15.12 GWh for the period January-December 2017, associated with the coverage of cash flow risks of clients indexed in the Unregulated Market. On December 31, 2016 ten (10) sales contracts and one (1) of future energy purchase contract were liquidated, each of them amounted to 0.36 GWh. On December 2015 there were no energy derivative operations in the market. 106 Enel Américas Annual Report 2016  Liquidity Risk The Group maintains a liquidity policy consistent with the contract of committed long-term credential facilities and Receivable Commercial Accounts temporary financial investments, for sums large enough In reference to the credit risk corresponding to the to support the projected needs for a period of time related receivable accounts originating from commercial activity, to the context and expectations of the debt and equity this risk is historically very limited given the short term markets. client’s recovery time, so they do not accumulate a significant amount individually. This is applicable for our The aforementioned projected needs include net financial generation business as well as the electricity distribution debt maturities, after financial derivatives. business. As of December 31, 2016, the Enel Américas Group showed In our line of business the generation of electricity, in some a liquidity of M$ 1,800,510,297 in cash and cash equivalents, countries, facing the lack of payment it’s possible to act in a and M$ 86,993,868 of available long -term uncommitted supply cut-off, and in almost every contract lack of payment credit lines. On December 31, 2015, the Enel Américas is established as cause for terminating the contracts. For Group accounted a liquidity of M$ 1,185,163,344 in cash this end, the credit risk is constantly monitored and its and cash equivalents, and M$ 34,332,376 in available long measured in maximum amounts exposed such risk. -term uncommitted credit lines. Credit Risk Enel Américas performs a detailed monitoring of its credit risk. In the case that our electricity distribution companies cut of the supply, in all cases its our company’s authority facing our client’s non payment, which is implemented according to the current regulation in each country that eases the evaluation process and controls credit risk, which is in fact also limited. 107  Financial Assets Cash surplus investments are made by top of the line The placements can be backed up by treasury bonds of the (with a risk qualification equivalent to investment grade, country where operating and/or bank securities issued by as possible) national or international financial entities, with top of the line banks, privileging the latter because they offer established limits by each entity. greater returns (always following the existing placement In the bank selection for investments, the ones considered policies). are those that have an investment grade credit risk rating, The derivatives contracts are arranged with highly solvent considering the three main international rating agencies counterparties, so that all operations are contracted with (Moody’s, S&P and Fitch). investment grade credit risk classification entities. 108 Enel Américas Annual Report 2016  Measuring Risk The Enel Américas Group develops a Risk Value measurement in its debt positions and financial derivatives, with the objective of monitoring the risk assumed by the company, limiting the volatility of the income statement. The portfolio includes for the calculation of the Value at Risk composed by: > Financial Debt. > Derivatives for Debt coverage. The calculated Value at Risk represents the possible variation of the portfolio’s value previously described in the duration of a quarter with a 95% of confidence. For that purpose there is a volatility study of the risk variables that affect the position portfolio’s value, with respect to the Chilean Peso, including: > US dollar Libor interest rate. > The different currencies in which our company operates, the regular local indexes for banking practices. > The exchange rates of the different currencies considered in the calculations. The Value at Risk calculations are based on the extrapolation of future scenarios (in one quarter) of the market values of the risk variables in terms of the scenarios based on real observations for the same period (quarter) in five years. The Value at Risk of a quarter with a 95% of confidence is calculated as a 5% percentile more adverse of the possible variations in the period. Considering the hypothesis described above, the Value at Risk in a quarter of the positions described, corresponds to M$ 112,729,307. This value represents the potential increase in the debt and derivatives portfolio, so this value at risk is directly related, among other factors, to the value of the portfolio at the end of each quarter. 109  Other Risk Factors liquidity, or raise interest rates available to the Company. The reduced liquidity, in turn, may affect Enel Américas’ capital expenditures, long-term investments and acquisitions, development prospects and dividend policy. A financial crisis, or another crisis, in any region of the world can have significant impact on the countries in which Enel Américas operates and consequently adversely affect operations, as well as liquidity. The economic fluctuations in South America can have an effect in the operations and financial conditions, as well as the value of Enel Américas securities. All the operations are located in four countries of South The four countries in which Enel Américas has investments America. As a result, the consolidated revenues may in the electricity business are vulnerable to external shocks, be affected by the performance of the South American including financial and political events, which can cause economies as a whole. If local, regional, or global significant economic difficulties and affect their growth. If economic trends adversely affect the economy of any either of these economies experiences a less than expected of the four countries in which investments or operations economic growth or undergo a recession, the company’s are held, the financial condition and operational results customers are likely to demand less electricity and even could be adversely affected. In addition, Enel Américas some of the customers may experience difficulties paying has investments in volatile countries, including Brazil. In their electricity bills, possibly increasing the uncollectible Brazil, in 2015, there was some instability in the political accounts of the company. Any of these situations could sector due to the corruption scandals that involved several adversely affect the operating results and financial condition representatives of the Government, including the President of Enel Américas. of the country, who faced impeachment process and was finally removed from the presidency in 2016. This situation Financial and political crises in other parts of the world has led to a deterioration of the Brazilian economy, while could adversely affect the Company’s business. For a recession was registered for the second consecutive example, in 2016 Donald Trump’s presidential election year, with a negative GDP of 3.6%. In 2016, 36% of the in the United States dramatically increased the volatility operational revenues and 22% of the operating results of of global financial markets because of the uncertainty in the Enel Américas were originated in Brazil. political decisions. The new US policies could affect global markets and global trade and would result in renewed Insufficient cash flows in subsidiaries located in these volatility especially with respect to commodity prices. In volatile countries has led, in some cases, to the inability addition, the instability in the Middle East or other fuel to meet financial obligations and the need to request producing regions could result in higher fuel prices around exemptions from compliance with restrictive financial the world, which in turn could increase fuel costs for the conditions or, to a certain extent, to seek guarantees Company’s thermoelectric power plants and adversely or other emergency measures by the Company as affect the operational results and financial condition of shareholders, including extraordinary capital increases. Enel Américas. In addition, a financial crisis and its negative effect on the hamper the ability to carry out Enel Américas’ strategic financial industry may have an adverse impact on the ability plans, which could adversely affect the operating results The idea of future adverse events in these economies may to obtain new bank financing under the same historical and financial conditions. terms and conditions that the Company has had so far. A financial crisis or political event or other crisis could America are influenced to varying degrees by the reduce the ability to access to the capital markets in the economic and market conditions in other countries, four countries in which Enel Américas operates, as well which could adversely affect the value of Enel Américas as international capital markets through other sources of securities. In addition, financial and securities markets in South 110 Enel Américas Annual Report 2016 Certain South American economies have historically been characterized by frequent and, occasionally drastic, interventionist economic measures by their governmental authorities including expropriations, which may adversely affect the business and financial results of Enel Américas. The electricity business is exposed to risks arising from natural disasters, catastrophic accidents, and acts of terrorism, which could adversely affect the operations, revenues and cash flows of Enel Américas. Enel Américas’ main facilities include power plants, transmission, and distribution assets. Earthquakes, Government authorities have modified monetary, credit, floods, fires may damage the Company’s facilities, and tariff, tax and other policies in order to influence the other catastrophic disasters caused by nature or by human direction of the economies of Argentina, Brazil, Colombia action, as well as acts of terrorism, vandalism, and riots. and Peru. Although Enel Américas has no assets in A catastrophic event could lead to business disruption, Chile, Enel Américas is constituted under the laws of resulting in significant reductions in revenues due to lower the Republic of Chile and therefore is subject to changes demand or significant additional costs not covered by in tax, labor and monetary laws, among others, in the insurance terminations for business interruptions. There country. For example, in September 2014, the Chilean may be delays between the occurrence of a significant government approved a tax reform, which impacted the accident or a catastrophic event and the definitive Company’s results. reimbursement of EnelAméricas insurance policies, which normally contemplate a deductible and are subject In addition, the Governments of Colombia and Peru to maximum amounts per claim. have implemented a new tax reform during 2016, increasing, among others, the tax rate. Other government For example, on May 6, 2013, a sheet of gas turbine unit measures in the South American countries have also No. 7 on the Santa Rosa plant of Enel Generación Peru included wage controls, prices, and tariffs, as well as was broken, causing catastrophic damage to the unit as other interventionist measures such as expropriation and a result of the combustion of the lubricating oil. Turbine nationalization. damage was classified as a total loss and its replacement cost exceeded US $ 60 million in property damage In the distribution business, if a certain service and and loss of profits. The unit was out of service for 19 technical standard is not met, there is a risk of losing months, and resumed its activities on December 5, 2014. concessions. As of December 31, 2016, Enel Américas Accidents such as this can adversely affect Enel Américas had five concession areas in one of the most urban centers operations, revenues and cash flows. in South America. In some of them, such as Buenos Aires (Argentina) and Rio de Janeiro (Brazil) for example, given their regulation and economic and financial conditions, achieving a high standard can be difficult. In the event that it is not possible to comply with these regulatory standards, the local power regulator could revoke the Company’s concessions and reallocate them to Enel Américas’ competitors. Changes in government and monetary policies on Enel Américas is subject to financing risks, such as those associated with the financing of new projects and capital expenditures and risks related to the refinancing the expiring debt; it is also subject to the compliance with debt obligations, all of which could adversely affect the liquidity of the Company. tariffs, exchange controls, regulations and taxation On December 31, 2016, the consolidated debt of Enel may reduce the profitability of Enel Américas. Américas reached to Ch$2,884 billion. Inflation, devaluation, social instability, and other political, economic or diplomatic events, including Enel Américas’ debt has the following maturity profile: the response to these circumstances by the region’s • Ch$ 498 billion in 2017; governments, may also reduce the Company’s profitability. • Ch$ 825 billion from 2018 to 2019; 111 • Ch$ 508 billion from 2020 to 2021; and of its indebtedness under circumstances that could be • Ch$ 1,053 billion from 2021 onwards. unfavorable to obtain the best price for such assets. Below is a breakdown of the debt maturity in 2017 by fast enough or at high enough amounts to enable such Moreover, it is possible that the assets could not be sold country: • Ch$ 204 billion for Colombia • Ch$ 204 billion for Brazil; • Ch$ 80 billion for Peru; payments to be made. Enel Américas may also not have the capacity to obtain the funds required to complete its projects under • Ch$ 3 billion for Argentina; and development or under construction. Existing market • Ch$ 7 billion for Chile. conditions at the time of requesting such funds or other unforeseen costs may jeopardize the Company’s ability to Some of Enel Américas’ debt contracts are subject to: (1) finance these projects and investments. compliance with financial ratios, (2) obligations to do and not to do, (3) events of default, (4) mandatory prepayment To date, the Company considers that Brazil is a country in events for breach of contractual conditions, and (5) certain which it operates with the highest refinancing risk. As of clauses for change of control by significant mergers or December 31, 2016, the third-party debt of the Brazilian divestments, among other provisions. A significant portion subsidiaries of Enel Américas amounted to Ch$ 640 billion. of the Company’s financial debt is subject to cross-default Enel Américas’ inability to finance new projects or capital clauses that have varying definitions, criteria, materiality expenditures or to refinance the Company’s existing debt thresholds, and applicability in the subsidiaries in which could adversely affect Enel Américas’ operating results such cross-breach would arise. and its financial condition. In the event that Enel Américas or its significant subsidiaries fail to comply with any of these significant contractual provisions, the Company’s creditors may It is possible that the Company may not be able to make the appropriate acquisitions. demand immediate repayment, and a significant portion of Enel Américas’ debt may be due and claimable. For Enel Américas constantly reviews procurement example, Ampla has been faced with financial problems projections that can increase market coverage or as a result of the Brazilian economic and political situation, complement existing businesses, although it cannot be which has led to a lower demand for electricity, higher ensured that appropriate procurement transactions can costs due to inflation, and, in the specific case of Ampla, a be identified and specified in the future. The acquisition deterioration of its cash flows and EBITDA, similar to other and integration of independent companies that are not distribution companies in the Brazilian market. Ampla had controlled by Enel Américas is generally a complex, time- to renegotiate some of its financial covenants between consuming and costly process. If an acquisition is made, December 2015 and January 2016, in order to avoid non- it may be that there are significant debts incurred and compliance. There is an additional risk of default if the liabilities assumed, the potential loss of key employees, economic environment in Brazil continues to worsen. depreciation expenses related to tangible assets and In March 2016, as a result of the credit deterioration of the distraction of management from other business Ampla, Enel Américas had to guarantee a bank loan from concerns. Additionally, any delay or difficulty related to the Ampla worth 75MMUSD and with aduration of 3 years. In acquisition and integration of multiple transactions could July 2016, Enel Américas granted intercompany loans to have an adverse effect on the business, Enel Américas’ Enel Brasil for its financial stability. financial condition or its operational results. It’s likely that Enel Américas may not have the ability to refinance indebtedness or obtain such refinancing in terms that are acceptable to the company. In the absence of such a refinancing, Enel Américas could be forced to dispose of assets in order to make overdue payments Since business depends to a large extent on hydrological conditions, drought conditions, and climate change may adversely affect the operations and profitability of Enel Américas. 112 Enel Américas Annual Report 2016 Approximately 53% of the installed generation capacity drought, require water for cooling. Drought not only consolidated in 2016 was hydroelectric. Therefore, the reduces the availability of water, but also increases the extreme hydrological conditions and climate change can concentration of chemicals such as sulfates in water. adversely affect Enel Américas’ business, the operational The high concentration of these chemicals in the water results and its financial condition. In recent years, regional used for cooling increases the risk of damage to the hydrology has been affected by two climatic phenomena - equipment of the thermoelectric plants, as well as the “El Niño” and “La Niña” - which had an impact on the rains risk of infringing relevant environmental regulations. and have resulted in droughts, affecting Enel Américas’ As a result, water may have to be purchased from ability to distribute energy from its hydroelectric facilities. agricultural areas, which are also experience water For example, in Brazil, where 67% of Enel Américas’ shortages. These water purchases can increase the installed capacity is hydroelectric, the low hydrological operational costs and force Enel Américas to negotiate contributions recorded since 2014 and the consequent with local communities. increase in thermoelectric dispatch prices and spot prices • Thermoelectric power plants that burn gas generate have motivated the authorities to make regulatory changes emissions such as sulfur dioxide (SO2) and nitrogen by modifying Upper boundaries. Compared to 2013, the oxide (NO) gases. When they operate with diesel oil they reservoir dam levels have remained low. In addition, the also emit particulate matter in the atmosphere. Coal- “El Niño” phenomenon has affected hydrological conditions fired power stations generate SO2 and NO emissions. in Colombia between May 2015 and May 2016, leading Therefore, increasing the use of thermoelectric power to a scarcity of precipitation and high temperatures, and, plants in periods of drought increases the risk of consequently, to an increase in energy prices. Each event producing higher levels of pollutants. of “El Niño” is different and, depending on its intensity and duration, the magnitude of its social and economic effects Droughts that have affected the regions where most of the can be more severe. Peru has also experienced a shortage hydroelectric power plants can last for a prolonged period of rainfall, especially towards the end of 2016 and forecasts and new episodes of drought may occur in the future. A show a decline in the natural flow of watersheds where Enel prolonged drought may exacerbate the risks described Américas operates. In 2016, the useful volume level of the above and have an adverse effect on Enel Américas water reservoirs was on average 6.8%, below the level of business, operational results and financial condition. 2015. The hydrological situation will depend on the level of the reservoirs at the beginning of May 2017. The distribution business is also affected by climatic conditions, for example, an average temperature that Operational costs of thermoelectric plants can be could moderate the use of heating or air conditioning, in considerably higher than the costs of hydroelectric plants. turn affecting the energy consumption. Even with extreme Our operational expenses have increased considerably temperatures, demand can increase significantly in a short during these periods. In addition, depending on our period of time, which could affect service and result in an commercial commitments, we may have to purchase interruption in supply with the additional risk of being fined electricity from the spot market in order to comply with by the authorities. Depending on the weather conditions, all our contractual supply obligations and the cost of these the results obtained by the distribution business can vary purchases of electricity may exceed the price at which we significantly from year to year. must sell the hired electricity, thus causing losses for these contracts. Droughts also have an effect on the operation of the Government regulations may adversely affect Enel Américas’ business. Enel Américas thermoelectric power plants, including Enel Américas is subject to extensive regulations on the installations that use natural gas, diesel, or coal as fuels, as rates it applies to its customers and other aspects of the follows: business. These regulations may have an adverse impact on the Company’s profitability. For example, governments • Enel Américas thermoelectric plants, which are in the countries where Enel Américas operates may generally used most frequently during periods of implement material rationing policies during droughts 113 or prolonged failures in rationing services, which could in Argentina by the Argentinian State, in Colombia by adversely affect Enel Américas’ business, operational the Ministry of Environment, Housing and Territorial results and financial condition. Development (“MAVDT”), in Peru by the National Water Authority (“ANA”) and in Brazil by the National Authority Government authorities could delay the tariff revision Of Water (“ANA” according to the acronym in Portuguese). process (as happened in the case of Codensa, a Colombian In Colombia, the water rights or water concessions are distribution subsidiary, whose tariff revision was scheduled granted for periods of 50 years and are renewable for for 2015 but has not yet been implemented), or the the same period. However, these concessions can tariff adjustments determined by the authorities could be revoked, for example, when there is a progressive be insufficient to cover the costs of Enel Américas (as decrease or depletion of the waters. In Colombia, the happened in the case of Edesur, an Argentine distribution access to water for human consumption is the first subsidiary between 2008 and 2017, and with the Brazilian priority before any other use. A similar event can happen distribution subsidiaries during part of 2014). Similarly, in Peru, where Enel Américas could lose its water rights, electricity regulation issued by government authorities in even if the concessions are granted for indefinite periods, countries where Enel Américas operates may affect the due to scarcity or a decrease in the quality of the access ability of supplying companies to obtain revenues that to water. offset operational costs. The inability of any consolidated company from the Group additional water rights, or the current unlimited water to obtain sufficient revenues to cover its operating costs concessions could have a material adverse effect on may affect the Company’s ability to operate as a start-up Enel Américas’ hydroelectric development projects and Any limitation to current water rights, the need to obtain firm and may otherwise have an adverse effect on the profitability. business, operational results and the financial condition of Enel Américas. In addition, changes in the regulatory framework are often presented to lawmakers and administrative authorities in the countries where Enel Américas operates and some of Regulatory authorities may impose fines on Enel Américas’ subsidiaries due to operational failures or non-compliance of regulations. these changes could have a material adverse impact on Enel Américas’ electricity businesses may be subject to Enel Américas business, operational results and financial regulatory fines for any breach of current regulations, condition. For example, the commercial operations of the including power outages, in the four countries in which it El Quimbo de Emgesa plant have been interrupted several operates. times due to measures decreed by the judiciary related to its authorization to start commercial operations. The generating subsidiaries of Enel Américas are supervised by local regulators and may be affected by these fines in These changes may have an adverse impact in the cases where, in the opinion of the regulator, operational businesses, operational results, and financial condition of failures that affect the regular supply of energy to the Enel Américas. The business and profitability of Enel Américas may be adversely affected if water rights are rejected or water concessions are granted for a limited time. system are the responsibility of the company as when, for example, there is no coordination of the agents with the system operator. In addition, subsidiaries may be required to pay fines or compensate customers if subsidiaries can not provide electricity, even if such non-compliance is due to forces beyond the control of subsidiaries. Enel Américas has the water rights for the supply originating from the rivers and lakes located in the vicinity of its generation facilities. These rights were granted To meet payment obligations, Enel Américas depends on payments from its subsidiaries, joint management companies, and associate companies. 114 Enel Américas Annual Report 2016 To pay its obligations, Enel Américas depends in part on subsidiaries and associate’s capacity to pay dividends, the cash it receives in respect of dividends, loans, interest credit amortizations, or to deliver other distributions that payments, capital reductions and other payments from its Enel Américas is limited by its operational results. As long subsidiaries and associates. The ability of subsidiaries and as the cash needs of any subsidiary overcome their available associate companies to pay dividends, interest and credit cash flow, said subsidiary will not dispose of the cash to be payments, and deliver other distributions to Enel Américas, delivered to the Company. This is the situation that affected is subject to legal limitations, such as dividend restrictions, Ampla and Enel Brasil as a consequence of the economic fiduciary duties, contractual restrictions, and exchange and political situation in Brazil, which especially impacted controls that may be imposed in any of the four countries the energy distribution sector. where they operate. Historically, Enel Américas has not always been able to is subject to depreciation in comparison to our functional access its subsidiaries’ cash flows at all times due to currency, which will have a negative impact on our capacity certain government regulations, strategic and economic to pay dividends to shareholders. Also, the currency of any dividend paid by our subsidiaries considerations, and credit restrictions. The future results of the Enel Américas operations may the operational results and Enel Américas financial condition. Any situation described beforehand could adversely affect continue to be subject to greater economic and political uncertainties, therefore, the likelihood of being able to rely on the cash flows of those entities’ operations for the payment of the Enel Américas debt. Limits on Dividends and Other Legal Restrictions. Some of The exchange risks could adversely affect the results and the value in dollars of the dividends paid to the ADS holders. the subsidiaries are subject to legal reserve requirements If the functional currency in Enel Américas Financial and other restrictions on the payment of dividends. Other Statement was in Chilean pesos until December 31, legal restrictions, such as currency controls, may limit the 2016, and in dollars since January 1, 2017 onwards, the ability of subsidiaries and associates to pay Enel Américas subsidiaries generate income in different currencies dividends, and amortize credits or the Company will (Argentine Pesos, Reales, Colombian Pesos and Soles). distribute other distributions. Furthermore, the ability of The South American country’s currencies in which Enel any of the subsidiaries that are not wholly owned by Enel Américas and its subsidiaries operate have been subject Américas to deliver cash payments may be limited by the to large devaluations and appreciations with respect to the fiduciary duties of the directors of such subsidiaries to dollar and may have important fluctuations in the future. minority shareholders. Moreover, some of the subsidiaries Historically, an important part of the consolidated debt has may be required by local authorities, in accordance with been denominated in dollars. Even though a substantial applicable regulations, to reduce or eliminate the payment part of Enel Américas income is linked to the dollar (mainly of dividends. As a result of such restrictions, any subsidiary coming from the generation and transmission businesses), may, under certain circumstances, be prevented from in general it has been and will continue to be exposed in an delivering cash to Enel Américas. important part to the fluctuations of local currencies with respect to the dollar, because of temporary gaps and other Contractual Obligations. The restrictions for the distribution limitations. of dividends include credit agreements that the subsidiary Enel Generation Piura can prevent the payment of dividend In the countries where operational cash flow are and other distributions to shareholders if they are in non- denominated in local currency, Enel Américas seeks to compliance of certain financial ratios. In general, the credit maintain debt in the same currency, but due to market agreements ban any type of distribution in the event of non- conditions this might not be possible. compliance underway. Subsidiaries Companies’ Operating Results. The subsidiaries may substantially decrease when local Due to this exposure, the cash generated by the 115 currencies are devalued with respect to the dollar. The Enel Spa. (Enel) owns 51.8% of the share capital of Enel future volatility in exchange rates in currencies in which Américas. Enel, the controlling shareholder, can determine Enel Américas receives income or in which incurs costs, the results of almost every important issue that requires can affect the business, financial condition, and operating a shareholder vote, as is the appointment of the majority results of Enel Américas. of members in the Committee and, subject to legal and Enel Américas is involved in several litigations. contract restrictions, the dividend policy. Enel can also exert influence over the operations and strategy of the business. Its interests may, in some cases, differ from the minority shareholders interest. For example, Enel carries Enel Américas is currently involved in several litigations out its commercial operations in a field of renewable energy that can conclude in unfavorable decisions of financial in South America through the company Enel Green Power fines for the Company. Enel Américas will continue to S.p.a., in which the company has no capital interest. Any be subject to future litigations that may have adverse present or future conflict of interest that may affect Enel substantial consequences for the business. could be solved against Enel Américas interests, for these The financial condition or operating results of Enel the business and operating results may be seen affected materials. Therefore, growth may be potentially limited and Américas could be affected if it is unsuccessful in the adversely. litigation defense or other lawsuits that are filed against the Company. The energy sales contracts for the long term are subject to fluctuations of the market price of certain commodities and other factors. Environmental regulations in countries where the Company operates and other factors can cause delays, hinder the development of new projects, or increase the costs of operating and general capital spending. Enel Américas is economically exposed to market Enel Américas operative subsidiaries are subject to price fluctuations of certain commodities due to long- environmental regulations, which, among other things, term energy contracts. Currently, 14.6% of the annual require the Company to conduct environmental impact estimated generation is sold on the basis of contracts studies for future projects and obtain permits from whose termination is in less than 10 years, and 18.8% on regulatory entities, local and national. The approval of the basis of contracts that end in less that 5 years. As the these environmental impact studies may take longer selling counterpart, the Company and its subsidiaries have than planned, and also, can be retained by governmental material obligations due to the long-term energy contracts authorities. Local communities, ethnicities, or at a fixed payment. The prices of these contracts are environmental activists, among others, can intervene in indexed at the value of different commodities, exchange the approval process for delaying or impeding the project rates, inflation, and the market electricity prices. Adverse development. They can also look for judicial actions changes to these rates could reduce the fees that a and other actions, with adverse consequences for Enel reasonably applied to the electricity sales contracts in the Américas, if successful in their demands. long term at a fixed price, which could adversely affect the operational results and financial situation of Enel In addition to the environmental matters, there are other Américas. The controlling shareholder could have substantial influence over Enel Américas and may have a different strategic vision than the minority shareholders when it comes to the development of the Company factors that can adversely affect the capability of building new installations or completing projects currently under development, including delays in the acquisition of authorizations from regulatory organizations, shortage or increases in the team prices, materials or work force, strikes, adverse climatic conditions, natural disasters, civil disturbances, accidents or other contingencies. Any of these events could potentially have an adverse impact 116 Enel Américas Annual Report 2016 on the operational results and financial conditions of Enel The development of new plants and the existing ones Américas. can lead to opposition from diverse interest groups, such as ethnic groups, environmentalists, landowners, The delays or modifications of any proposed project, and farmers, local communities, and political parties, among the laws or rules that can change or be interpreted in a others, which could affect the reputation and prestige of way that can adversely affect the operations or plans for the sponsoring company. For example, the hydroelectric the companies in which Enel Américas has investments, project “El Quimbo” in Colombia faced constant social which can adversely affect the business, operational lawsuits that have delayed construction and raised results, and the financial condition of the Company. costs. Since April 27, 2014, until May 12, 2014, a national Power plants’ projects that can face a significant opposition from different groups can delay progress, raise costs, hurt reputation, and potentially, result in image deterioration when facing stakeholders. agricultural strike that involved communities near the project, blocked roads, and occupied neighboring land. Additional protests during 2014 blocked the entrance to the construction site of the Balseadero viaduct and the dam watershed. The operations of the existing thermoelectric power plants of Enel Américas can also affect the prestige Enel Américas reputation is fundamental to the facing stakeholders due to emissions such as particulate relationship with the key stakeholders and other matter, sulfur dioxide and nitrogen oxides, which could interested parts. If the company does not have the adversely impact the environment. capacity to effectively manage, real problems or perceive those that can negatively affect opinions towards the The reputation damages may place considerable pressure Company, the business, operational results, and financial on the regulators, creditors, and other stakeholders, and conditions can be affected in an adverse way. lately, the fact that projects and operations are being 117 carried out is not optimal, creating a fall in the stock the Company operates establish legal mechanisms for the price, and making the capacity to attract or retain good judicial authorities to impose work contracts if the parts are employees difficult, which results in the damaging of the not capable of reaching an agreement, which can increase Enel Américas reputation with these interest groups. costs from what was budgeted. Additionally, some Enel Américas trusts in the electricity transmission systems that are not their property neither in their control. If these installations do not provide a proper transmission service, it can impede the energy delivery that it sells to the final clients. In order to deliver the electricity sold, the Company depends on the transmission system property of other companies that are not related and are operated independently. This dependency exposes the Company to severe risks. If the transmission is interrupted or the transmission employees have highly specialized abilities and certain actions such as strikes, task abandonment, suspension, for those employees could adversely impact the business performance, operational result, and financial, as well as their reputation. The relative lack of liquidity and volatility in the Chilean stock market and its dependence on the economical conditions in Latin America and other parts of the world, could negatively affect stock prices and the company’s ADS. capacity is inadequate, it can impede a sale and delivery Even though the Company does not own assets in Chile, of electricity. If the energy transmission infrastructure in a its stocks are listed in the Chilean Stock Market, for which region is inadequate, the recovery of costs and profits can Enel Américas is regulated under the laws of the Republic be insufficient. If restrictive price regulatory transmission of Chile, as well as being placed in Chile. The Chilean stock norms are imposed, the transmission Companies that markets are substantially smaller and less liquid that the Enel Américas supports may not have enough incentives main stock markets in the United States. Additionally, the to invest in the infrastructure expansions in transmission, Chilean stock markets can be affected in an important which could adversely affect operations and financial measure by events in other emerging markets. The lack results. Currently, the construction of new transmission of liquidity in the Chilean market can damage the holder’s lines are taking longer than in the past, mainly due to ADS to sell ordinary retired stocks in the Chilean market new social and environmental demands that are creating of the ADS program, in quantity, price, and memento in uncertainty about the possibility of completing the projects. which they would like to. At the same time, the liquidity Also, the increase in new NRCE projects congests the and the stock market or ADSs can be affected by a series current transmission system, since they are projects of of factors that include variations in exchange and interest rapid construction, while the new transmission processes rates, and deterioration and volatility of the markets and can take longer to be constructed. any liquidity change, financial condition, results, and the The business can experience adverse consequences if it does not have the ability to reach satisfactory agreements in the collective negotiation contracts with the unionized workers. company’s profitability. Also, the Chilean stock market can be affected in various degrees by economic conditions and the other markets in Latin America, in emerging markets and other parts of the world. Although the economic conditions in these countries can significantly differ from the economic A large percentage of the employees are members of a conditions in Chile, the investor’s reactions to changes in union that has collective negotiation contracts that need to the economies of any other country may have an adverse be regularly renewed. The business, financial condition, and effect on the market value and value liquidity for Chilean operational results could be adversely affected in the case issuers. A raise in the perceived risk of the investment that an agreement cannot be found with any of the unions in Latin American countries and other parts of the world that the employees represent, or by an agreement with may reduce the capital flows to Chile and negatively affect the trade union that contains conditions that Enel Américas the Chilean economy in general, and the Enel Américas finds unfavorable. The laws in the various countries where stockholders. 118 Enel Américas Annual Report 2016 It’s not possible to ensure that the price or liquidity of the any of these IT systems could have a material adverse shares or ADSs in any market might not negatively affected effect on operational results. In addition, cyber attacks can by events in other Latin American countries or the global have an adverse effect on the Company’s image and its economy in general. relationship with the community. Lawsuits filed against Enel Américas in the other countries of South America or the claims against the Company that are based on foreign legal concepts may not be successful. In recent years global cyber attacks on security systems, treasury operations and IT systems have intensified. The Company is exposed to cyber-terrorist attacks which are aimed at damaging assets through computer networks, cyber espionage in the pursuit of strategic information that may be beneficial to third parties, and cyber theft of private All of the Company’s assets are located outside of the and confidential information, including information of the United States. All the directors and all senior executives company’s customers. are domiciled outside the United States and most of their assets are also located outside the United States. If any The company has already suffered cyber attacks in the investor were to file a lawsuit in the United States against past, which have resulted in service interruptions. New the Company directors, senior executives or experts, it cyber attacks may occur and may adversely affect Enel may be difficult for them to pursue a legal process within Américas in the future. the United States against such persons and may be difficult for them to enforce, in the courts of the United States or Chile, a judgment rendered in the United States based on the civil liability provisions of the United States federal securities laws. In addition, there are doubts as to whether a successful action could be waived in Chile with regard to the liability based solely under the guidance of the United States federal securities laws. Interruption or failure of the information technology systems and communications systems or external attacks or breaches of these systems could have an adverse effect on operations and results. The Company relies on information technology, communication and process systems (“IT systems”) to operate its business, the failure of which could adversely affect the condition of the business, financial and operational results. IT systems are vital for power generating subsidiaries so that they can monitor plant operations, maintaining the power generation and network performance, adequately generate customer invoices, achieve operational efficiency, and meet service goals and standards. Distribution subsidiaries could also be adversely affected as they rely heavily on IT systems to monitor their networks, billing processes for millions of customers, and customer service platforms. Temporary or long-term operational failures of 119 120 Enel Américas Annual Report 2016 Company Reorganization 121 122 Enel Américas Annual Report 2016 During 2016 a process of corporate reorganization process was concluded that pursued the division of Chilean and non- Chilean companies. The first phase of the reorganization consisted of the separation of the then Endesa Chile, Chilectra and Enersis between the Chilean and non-Chilean businesses of electricity generation, distribution and transmission by means of a Spin- Off according to the Chilean legislation (the “Spin-Offs”). Following the approval of the Spin-Offs by the respective shareholders of Endesa Chile, Chilectra and Enersis at their Extraordinary Shareholders Meetings held on December 18, 2015. The companies division took place on March 1, 2016 and the Spin-Offs were concluded on April 21, 2016, giving room for the creation and public listing of the shares of the new companies constituted by Spin-Offs, Enersis Chile S.A., Endesa Américas S.A. and Chilectra Américas S.A. The second phase of the reorganization was the merger between the companies “Américas”, which consolidated non- Chilean assets. On September 28, 2016, the respective shareholders of Enersis Américas, Endesa Américas and Chilectra Américas approved the Endesa Américas Merger and Chilectra Américas, Enersis Américas, with Enersis Américas remaining as the continuing company. The merger combined the non-Chilean generation, transmission, and distribution businesses under a single company, contributing to the simplification of the group’s corporate structure and providing benefits such as reducing the flight of cash flows in the subsidiaries, aligning strategic interests, taking more efficient decisions and greater operational efficiencies. On December 1, 2016, the Merger took place and from that date Enersis Américas has incorporated the entire shareholding of Endesa Américas and Chilectra Américas and succeeded them in all their rights and obligations. On the same date, Endesa Américas and Chilectra Américas were totally dissolved without liquidation. As a result of the merger, we issued 9,232,202,625 new shares and our final controlling shareholder, Enel SpA, now owns 51.03% of our shares. As part of this process: (i) Enersis changed its name to Enersis Américas S.A. on March 1, 2016 and then to Enel Américas S.A. on December 1, 2016); (ii) Endesa Chile changed its name to Enel Generación Chile S.A. on October 1, 2016; (iii) Chilectra changed its name to Enel Distribución Chile S.A. On October 1, 2016, and (iv) Enersis Chile S.A. changed its name to Enel Chile S.A. on October 1, 2016. 123 124 Enel Américas Annual Report 2016 Regulatory Framework of the Electricity Industry 126 Enel Américas Annual Report 2016  Description of the Industry Sector Enel Américas and its subsidiaries and jointly controlled companies participate in the generation, transportation, distribution and sale of electricity in five countries, each of which has a regulatory framework, energy matrixes, participating companies, and different growth and consumption patterns. The following is a brief summary of the main legal bodies that regulate the activity, the market structure and the most relevant aspects regarding the agents of each of the countries where the company operates. Argentina he Argentine electricity sector is governed by, among other became valid in February of 2013 and was updated through regulations, by Law N°15,336 of 1990 and Law N°24,065 of the Resolution SE N° 529, N° 482, N° 22 in 2014, 2015, and 1992. The Wholesale Electricity Market (MEM) there are four 2016 respectively. local agent categories (generators, transmission companies, distributors and large clients) and foreign agents (generation The transmission sector works in conditions of monopoly, trading companies and demand trading companies), and is composed by several companies to which the Federal companies that are authorized to buy and sell electricity and Government grants concessions. its related products. The distribution sector, on its part, operates under monopoly Originally the generation sector was organized on a conditions and is served by companies that have also been competitive base (marginalism), with independent generators granted concessions. Distribution companies have the that sold their energy in the MEM spot market or through exclusive responsibility that electricity has to be available for private contracts, to clients in the MEM contracts market, final clients within a specific concession area, and does not or to the “Administrative Companies in the Wholesale consider if the client has a contract neither with the distributor Electricity Market S.A.” (CAMMESA) through special nor with a generator. transactions such as contracts under the Resolution S.E. Nº220/2007 and Resolution S.E. Nº724/2008. Nevertheless, TIn 2002, due to the economic slow down that affected the this regimen changed substantially in March 2013, when country, Law Nº25,561 was enacted with emergency. The the Energy Secretary approved Resolution S.E Nº 95/2013, Law disrupted the American dollar parity and pushed the which established a remuneration system for the generation conversion from Argentine pesos from obligations and rights based on average costs, forcing the delivery all the energy assumed by the American currency. This forced nominal generated to CAMMESA. This new compensation scheme conversion from dollars to pesos and had a strong impact 127 in the whole Argentinian electricity industry. Additionally, the Government approved several regulatory measures that slowly intervened in the development of the industry. The Emergency Law has been subject to successive extensions and with regards to the last one, approved through Law N°26,896, will be valid until December 31, 2015. The pesification and devaluation of the economy forced the Regulation of Generation Companies renegotiation of all of the concession contracts. In particular, The regulation of generation companies has suffered the distribution sector and the company participated in the important variations since the enactment of Law N°24,065 “Energy Distributing Companies from the South, S.A.” until Resolution S.E.E Nº 22/2017. In accordance with the (Edesur), and in 2006 with the Government when an Act aforementioned Law, every generation agents from MEM Agreement of Contractual Renegotiation was signed, that must be connected with SIN (National Interconnected subsequently was ratified through Decree PEN N° 1959/2006, System) and are obligated to comply with the dispatch which gradually has allowed the adaptation of tariff revenues order to generate and deliver electricity, in order to sell as a way to guarantee the business sustainability. The in the spot market and in the forward market (MAT). The implementation of this agreement was paralyzed since 2008 distribution companies, trading companies and large clients and until this exercise, as explained below. subscribed the private supply contracts with generating companies, paying the contractual price directly to the No generator, distributor, big user, nor any other company generator, and in addition paying a fee to the transmission controlled by any of the latter or under its own control, can be and distribution company for the use of their systems. the owner or majority shareholder of a transportation company or its controlling companies. At the same time, transmission With the objective of stabilizing generation prices facing companies are forbidden to enter into generation activities, tariffs for clients, the market defined a seasonal price distributing, buying, and/or selling electricity. The distribution being the price of the energy that distributors pay for companies are not allowed to own generation units. their energy purchases traded in the spot market. This price is determined every six months by the Energy Regulated clients are supplied by distribution companies Secretary, after CAMMESA had carried out their spot price with regards to regulated fees, unless they have a minimum projections in a determined period, in order to adjust to demand capacity of 30kW. In this case, they are considered the differences between this price and the real cost of the as “large clients” and can freely negotiate their prices with original generating, the establishing fund was created. If generation companies. the seasonal price is lower than the cost of generating it, it has to be removed from the fund to compensate the On December 16, through Decree 134/2015 a national energy generation; otherwise it contributes to the fund. Since emergency was declared until December 31, 2017, where 2002, the Energy Secretary in practice has maintained the the Ministry of Energy was instructed to elaborate and apply average stationary price, without important variations. This actions to the Generation, Distribution and Transmission has created an important deficit in the stabilization fund, industries with the objective of adapting the service quality which has been covered by the Argentine state through and supply security; and teaching the National Public subsidies increasingly larger. Administration how to carry out consumer rationalization programs in the respective public bodies. The approved resolutions created from the emergency Law had a significant impact in energy prices. Between the measures carried out it mainly highlights the Resolution SE 240/2003, which modified the way to fix spot prices when separating the calculation of marginal operating costs. The main objective of Resolution SE Nº 240/2003 is to avoid the price indexation linked to the dollar, and despite that the generation study is still based on the real fuels used, the spot price calculation is based on absolute gas availability to satisfy demand, even in circumstances 128 Enel Américas Annual Report 2016 in which many generators generate with alternative fuels, In 2012, the framework of the agreement achieved with the such as diesel, due to the difficulty of supplying natural Government to enable the development of our subsidiaries gas. The value of water is not considered if its opportunity in Argentina, on October 12 of 2012, Costanera subscribed cost is higher than the generation cost using natural gas. an agreement for the implementation of an investment The Resolution also establishes the spot price limit is 120 plan for the generation units in Costanera power plant, Ar$/MWh, which is still valid. The real variable costs of whose purpose was to optimize reliability and availability of thermal units that burn liquid fuels are paid by CAMMESA the equipment, for a total amount of US$304 million, in a through the mechanism denominated Transitory Dispatch 7-year term. The agreement also contemplates the payment Overcost (TDO). of contract maintenance obligations (Long Term Service Agreement -LTSA-) of the combined cycle power plants. Also, based on the dispositions included in the Emergency Law, the payment for capacities is reduced from 10 USD Subsequently, Resolution S.E. N° 95/2013 abandoned to 10 pesos by MW-hrp (hrp: remunerated capacity hours). the marginalizing pricing system, thus entering into a Subsequently, the capacity warranty is slightly raised to 12 recognition mechanism of average costs. The Resolution pesos, approximately ⅓ of the value paid before the 2002 recognizes fixed costs remuneration, variable costs and crisis. additional remuneration. Fixed costs are remunerated (in $/MW-hrp) in function to technology, scale, and available On December 2004, the Energy Secretary approved the power. It’s also subject to the achievement of goals related Adherence Act through the Resolution 1427/2004, for to the availability established. In terms of variable costs, the Rehabilitation of Wholesale Electricity Market. The the operational costs are remunerated and maintenance majority of the generators signed the Act, including the in function to the energy generated (in $/MWh), according generation companies owned by Enersis. With regards to the fuel utilized, and its technology (the generators do to this Resolution, the Secretary created a fiduciary not have fuel costs since this is provided by CAMMESA). fund, named FONINVEMEM, where private generators Lastly, the additional remunerations are calculated in provided part of the energy sold during 2004 to 2007 for function of the total energy generated (in $/MWh), the construction of two new combined cycles. Also in this considering the technology and generator scale. Part of new capacity, in 2010 the generation companies owned by these remunerations is accumulated in the fund that will Enersis, along with other companies, participated in the be used to finance the new investments in infrastructure creation of another trust for the construction of another in the electricity sector. combined cycle, expecting the closing of a combined cycle for October 2016. There was part of the energy credits for The Resolution rules generators, cogenerators and auto to the energy sold in the period 20018 to 2011 allocated to generators, except the power plants that started operations this new project. as of 2005, the nuclear power plants, and the generation 129 of hydroelectric binational power plants; reserves and Resolution SEE N°19/2017, was enacted on February centralizes in CAMMESA the commercial management 1, 2017, defines a minimum remuneration for capacity and the dispatch of fuel and suspends the celebration of and scale, additionally for the thermal units establishes bilateral energy contracts between generators and MEM the possibility of offering the availability of with a same agents, and the latter should acquire electricity energy differential remuneration for every thermal technologies. demand with CAMMESA. Resolution SE N° 529/2014 The thermal generator may declare every summer the value mainly performs the value actualization for Resolution of the firm capacity to commit for each unit during a 3-year SE N°95 and incorporates the non-recurring maintenance period, being able to discriminate between summer and remunerations for thermal power plants. winter periods (adjusts can be made in the same period). Resolution SE N°482 of 2015 updated the remunerations of of Commitment of Guaranteed Availability is habilitated, generation companies in force since February 2014 pursuant along with the information required by the Seasonal Winter to Resolution 529/2014, thus creating a new position, with Program, in force since May 1 until October 31, 2017. As the exception and for the year 2017, the declaration the objective of financing investments that have not been used and excludes hydroelectric power plant from the The thermal generator will sign a Commitment of Guaranteed variable payments for energy transport and determined the Availability contract with CAMMESA, but will give to the remunerations for wind energy power plants, photovoltaic corresponding demand as determined by Secretary of solar energy, biomass/ biogas and internal engine Electric Energy. The remunerations that the unit will receive combustion. On March 30, 2016, the Secretary of Electric with the capacity commitment will be proportional to its Energy, depending on the Ministry of Energy and Mining, performance, and the minimum value will be calculated in through the Resolution N°22/2016, updated all of the relation to the minimum price. remuneration values of Resolution SE N°482/2015, replaced Annexes I, II, III, IV. V, VI, and VII of the aforementioned With respect to the hydroelectric power plants, a new Resolution. scheme to evaluate capacity was defined, based on the 130 Enel Américas Annual Report 2016 real capacity available (implying a greater value of capacity CAPACITY REMUNERATIONS FOR HYDROELECTRIC with respect to the previous regulation). Likewise, they POWER PLANTS introduce a base capacity value, and another additional Minimum Price (since February 2017) discriminated from May to October 2017, and starting from Chocón November 2017. Arroyito 2,000 U$S/MW-month 3,000 U$S/MW-month The Resolution establishes the following remuneration Additional Price values, which are defined in dollars (conversion considers May 17-Oct 17 500 U$S/MW- month the exchange rate published by the Central Bank of the Nov 17 onwards: 1.000 U$S/MW- month Republic of Argentina of the last business day) and the maturity dates are established by CAMMESA’s Procedures: From November 2017, 50% of the additional remuneration will depend on the disposal of large events insurance (turbines, CAPACITY REMUNERATIONS FOR THERMAL POWER etc) and the progressive modernization of control systems. PLANTS Minimum Price (since February 2017) REMUNERATION BY ENERGY Large Cycles 3,050 U$S/MW-month Energy Generated Large TV Large TG Engines: 4,350 U$S/MW- month Cycles and TV 3,550 U$S/MW- month 5,700 U$S/MW- month Base Price for Committed Remunerations May 17-Oct 17 6,000 U$S/MW- month Nov 17 onwards: 7,000 U$S/MW- month Hydroelectric Gas Liquid Engines Gas Liquid 5 U$S/MWh 8 U$S/MWh 7 U$S/MWh 10 U$S/MWh 3.5 U$S/MWh Additional Price for Committed Remuneration (Maximum) May 17-Oct 17 Nov 17 onwards : 1,000 U$S/MW- month : 2,000 U$S/MW- month Energy Operated (associated to Rotant Capacity) Thermal Hydro 2 U$S/MWh 1,4 U$S/MWh Energy values are defined at the Node. The maximum price given the offers that should be awarded For the cases in which generators have requested a loan by CAMMESA, with regards to the needs defined for the for maintenance, 1 US$/MWh will be discounted for each system to face critical situations. energy generated by the Power Plant until paying the balance due for large and/or extraordinary maintenances. 131 Regulation of Distribution Companies The distribution of activities is carried out by companies Revision (ITR) were distributiom companies pending under that obtain concessions. Distribution companies must national jurisdiction. supply all of the electricity demands in their concession areas exclusive to prices (fees) and conditions established In this way, and with respect to Edesur, in 2006, the in the Regulation. The concession agreements include distribution company subscribed to an “Agreement Act penalties for the failure to provide electricity service. The for the Renegotiation of a Concession Contract”. This concessions were given for distribution sales and retail agreement established, between other conditions, a sales. The concession periods are divided in “management transitory fee regime that included the increment of periods” that allow concessions abandon the concession 28% of VAD, with biannual updates; a service quality every certain amount of time. regime, and a process of Integral Tariff Revision (ITR) to be implemented by ENRE. The semi-annual adjustment Since 2011, there are two electricity distribution areas mechanism was set in function of the evolution an inflation subject to federal concessions. These concessionaires index, denominated by the Cost Monitoring Mechanism are Edesur and Edenor, both located in the city of Buenos (CMM). The first inflation updates occurred in 2008, but Aires and Gran Buenos Aires. Until 2011 Edelap was also starting this year they have not been officially recognized. under federal jurisdiction. Nevertheless, the Argentine Government has created Most of the distribution companies renegotiated their companies to continue providing electricity services. contracts during 2005 and 2006, although fees were partially and temporarily increased, the Integral Tariff One of these alternatives has been denominated the many regulatory alternatives that have allowed distribution 132 Enel Américas Annual Report 2016 Rational Use of Electric Energy Program or PUREE. into account the Integral Tariff Revision (ITR) whose This Program was created in 2004 by the Secretary of completion date is not defined, creates the difference Energy, establishing bonds and penalties for the clients between a theoretical tariff framework and the current depending on the level of energy savings based on a tariff framework for each user category, depending on consumer reference. The net difference between bonds the E.N.R.E. calculations and the tariff will not translate and penalties were originally deposited in the MEM if it will be covered through transfers from the Electricity Stabilization Fund, but was later modified by requests from Wholesale Administrating Company S.A. (CAMMESA) with Edesur and Edenor, so that distribution companies may funds from the National Estate; (ii) considers that starting use these resources to compensate the cost variations February 1° of 2015 the PUREE funds are considered as of the cost increases (MMC) that are not recognized. Edesur income, also to the RTI account. (iii) reiterates the Thus, on May 7, 2013, the Secretary of Energy approved recognition and compensation procedures of certain costs the 250/2013 Resolution, which determines the MMC to incurred in the service delivery and distribution of electric charge until February 2013 and allows the compensation energy from Resolution SE N° 250/2013 until January of the corresponding debts from the PUREE program and 31, 2015; and (iv) instructs CAMMESA on emitting sale other debts that Edesur accumulates with the system. liquidation dated with an expiration date to be determined Developing this Resolution, on November 6, the Secretary (LVFVD) by the sums that would have determined of Energy published Note 6852 in which Edesur and Edenor E.N.R.E. in virtue of the higher salary costs of the Society were authorized to conduct compensations of the MMC originating from the application of Resolution N° 836/2014 with debt generated starting with the PUREE program for of the Secretary of Labor. Additionally, it anticipates the the March-September 2013 period. remaining balances cancellation in favor of the Wholesale Electricity Market (MEM) through a payment plan to be During 2014, through Resolution S.E. N° 4012 and the determined. Resolution ENRE N° 112606 once again authorized the MMC-PUREE compensation for the period of October Subsequently, through the Note SE N° 1208, the Secretary 2013-March 2014. Additionally, through Resolutions S.E. of Energy directed CAMMESA the method to calculate N°486 y N° 1136 the MMC-PUREE compensation was the debt that EDESUR maintains with the MEM for the authorized for the April-August 2014 and then for the economic energy transactions incurred on January 31, September-October 2014 period as well. The accounting 2015, and its compensation with the credits that come up effects of said compensations positively affected the during the application of the Monetary Cost Monitoring financial results of the company. At the same time, (MMC). As a consequence of it, during the first semester additional charges have also been approved in client fees of 2015 net financial income of $628.6 million was to finance new expansions in investments and the quality recognized. of distribution companies. Similarly, in November 2012, the Resolution ENRE 347 was approved, which eased the PEven though Resolution SE N° 32/2015 represents the first application of this differential charge for client accounts step towards an improvement of the economic situation in the future RTI. The application of the charge supposes of the Company, this also expects that investments will for Edesur an additional annual income of 437 million continue to be financed with debt through CAMMESA, thus argentine pesos, which represented a 40% VAD and 20% solving mechanisms that allow remaining loan repayment tariff increases. in favor of MEM still remains, as well as updating income that contemplate the raise in operative costs. The fees, on On March 13, 2015 the Official Bulletin for Resolution SE their part, have remained frozen since 2008. N° 32/2015 was published, which meant the accountable recognition of an income of ARS$2,339 million. The most In January 28, 2016, after the seasonal price changes, important aspects of this resolution are: (i) approves a the Emergency Resolution No. 7/2016 was issued by the transitory increase on the Edesur income valid starting Ministry of Energy and Mining. The resolution introduced February 1 of 2015 exclusively destined to the payment by the ENRE to adjust Edenor and Edesur fees through of energy that is acquired in the electricity market, from a transitory tariff until the RTI start to be applied, which wages, and provisions and services; said increase, taking is expected for December 31, 2016. Also, Resolution No. 133 7/2016 suspends the PUREE and requires the application of a subsidy rate for the more vulnerable clients. In January 29, 2016, the ENRE issued Resolution No. 1/2016 with a new transitory tariff valid from February 1, 2016. Its application is included in Resolution MEM No. 7/2016, which changed the supply procedures and defined a monthly Billing. Also, the ENRE issued Resolution No 2/2016, which ended the FOCEDE and established a new procedure for funds from Resolution ENRE 347/12, in substitution for Edesur and Edenor confidence for a commercial account. On April 5, 2016, Resolutions N° 54 and 55 were enacted by the National Electricity Regulating Entity. The first approves the Bases and Conditions for Private Companies, for the hiring of a Consultant for the RTI of EDESUR and EDENOR, and the second approves the timetable and emits guidelines for the same, indicating that ENRE defines the Parameters of Quality and the RATE. Continuing with the tariff renegotiation process, on August 8 the ENRE issued Resolution 463/16, which provide details of the parameters of the technical service and quality, and the cost and values of unsupplied energy required for the modification of the RTI. This also receives most of the contributions and modifications demanded by EDESUR to the draft that was informally delivered. Similarly, on August 29 through Resolution ENRE 492/16, the Quality of Commercial Service and Technical Product Parameters were defined. This resolution contains economic signals towards the fulfillment of deadlines and times of supply replenishment reductions. On the other hand, on August 3, the regulation entity proceeded to inform the value of the Rate of Profitability. This was established on Resolution ENRE 494/16 at 12.46% before taxes and 8.1% after taxes. On September 1, EDESUR proceeded to the final presentation of the investment plan requested by Resolution ENRE 55/16 and then receiving from the Secretary of Electric Energy the note NO-2016-01193698- APN-EDESUR RTI which established that credit and debit from the disregard of the Agreement Act would be treated separately from the income required from the RTI 134 Enel Américas Annual Report 2016 and proceeded to complete on September 6 the related reports with Fundamentals and the criteria of the proposal. Exploitation Costs. Requires the income and calculation of fees. The Tariff Structure and Wholesale transfer costs. The updating mechanisms of the Company’s distribution costs, results and economic financial model. This method concluded with the delivery of formal final reports required for the aforementioned resolution. On September 28, through Resolution ENRE 0522/2016, the regulating organism decided to call for a Public Audience with the objective of acknowledging and listening to opinions with regards to Tariff Proposals presented by the distributing companies for the next five-year period; this is part of the Integral Tariff Revision Process (RTI) and with previous character to define the tariffs to apply by the referred Subsidiaries in said five year period. On Wednesday February 1, 2017, the ENRE published Resolution N° 0064 which closed the RTI process and as a result, establishes the annual remuneration recognized by EDESUR S.A. amounting to $14,539,836,941. With regards to the application of new structures and tariff charges, the MEyM considered as timely and convenient to instruct the ENRE to limit the VAD increases that emerged as an RTI process results to be applied starting February 1, 2017, to a maximum of forty-two percent (42%) with respect to the valid VAD at that date, having to complete the resulting value application of the new VAD, in two stages: the first in November 2017, and the last on February 2018. Also, it was decided that the ENRE must recognize EDENOR S.A. and EDESUR S.A. the VAD difference that is produced by the application of gradual fee increases recognized by RTI, in 48 (forty-eight) installments starting from February 1°, 2018, which increases the resulting VAD value as of that date. The regulation also sets revenues updates mechanism for the distribution companies as a result of price variations in the economy and all of the other issued related with the quality of the service delivered and supply regulation. Resolution SEE N° 20/2017 on seasonal prices valid from Once this regulatory framework is established with regards declared that the transition tariff phase of EDESUR was to the distribution tariffs regime including the instructions met, and the Settlement Act that the company adheres as enacted by MEyM, and the resolutions contained in established in its Concession Contract. the corresponding invoice of February 1, 2017, it was 135 Regulation of Transmission Environmental Regulation Transmission was designed on the basis of general The electricity installations are subject to environmental laws conception and the principles established by Law 24.065, and regulations, federal and local, including Law Nº24,051, adapting the activities to the general criteria contained in or Dangerous Waste Law, and its annexed regulations. the concession given by Transener S.A., in Decree 2.473/92. For technological reasons the transmission business is In the electricity sector, certain obligations to inform and related to economies of scale that do not allow competition, monitor impose on emission standards. The non-compliance therefore it is a monopoly and is subject to considerable of these requirements forces the Government to establish regulation. penalties, such as suspension of operations that, in the case of public service, can result in the cancellation of concessions. Law Nº26,190, enacted in 2007, defined the use of renewable sources for the generation of electricity as national interest and set as a goal 8% of the market participation for renewable energy in a 100-year term. On October 21, 2015, the Official Bulletin published the new Law 27,191, of Renewable Energy in Argentina, modifying the Law N°26,190. The new regulation postpones to December 31, 2017, with the objective of reaching 8% participation in the national demand with the generation of renewable sources and establishing as a second stage objective to reach 20% of participation by the year 2025, and setting mid goals of 12%, 16%, and 18% for the end of the years 2019, 2021, and 2023. The sanctioned Law creates a Fiduciary Fund (FODER) that could finance projects, give tax benefits to the renewable energy projects, and establish the non application of specific tributes, national royalties, regional and municipal until December 31 2025. The clients categorized as Big Users (>300 Kw) should individually fulfill the participation of the renewables, establishing establishing that the price of these contracts cannot be superior to 113 US$/MWh, and setting penalties to those who do not fulfill these objectives. The law regulations are still pending. 136 Enel Américas Annual Report 2016  Brazil Industry Structure The Brazilian electricity industry is organized in a large Price of Differences (PLD), which takes into account the interconnected system, (the National Interconnected risk aversion curve of the agents. System), which comprises most of the regions of Brazil, and several other smaller isolated systems. The generation, The transmission works under monopoly conditions. The transmission, distribution and commercialization are Brazilian government sets tariffs for transmission for the legally separated activities in Brazil. companies. The charge for transmission is fixed and the transmission revenue does not depend on the amount of The industry is regulated by the Federal Government electricity transmitted. through the Ministry of Mines and Energy (MME) and by the National Electric Energy Agency (ANEEL). Distribution is a public service that also works under monopoly conditions and is provided by companies that in According to Law No. 10,848 of 2004, the wholesale turn have received concessions. Distribution companies in electricity market as a tool for spot price formation is the Brazilian system are not entitled to: (i) develop activities residual. On the other hand, the wholesale price is based related to the generation or transmission of electricity; (Ii) on the average bid prices, with independent bidding sell electricity to unregulated customers, except to those processes for existing energy and “new” energy. The latter within its concession area and under the same conditions include long-term contracts in which the new generation and tariffs applicable to its captive clients of the Regulated projects must cover the growth of demand foreseen by Market; (Iii) maintain, directly or indirectly, equity interest the distributors. The “old” energy tenders consider shorter in any other company, corporation or partnership; or (iv) contracting periods and seek to meet the contracting develop activities that are not related to their respective needs of the distributors that arise from the expiration concessions, except those permitted by law or in the of previous contracts. Each bidding process is centrally relevant concession agreement. Generation companies coordinated, the authority defines maximum prices and, are not authorized to have equity interest in distribution as a result, contracts are signed where all distributors companies in surplus of 10 percent. participating in the process buy at fair appointment from each of the generator providers. The price at which spot The unregulated market includes the sale of electricity market transactions are settled is called the Settlement between generation concessionaires, independent 137 producers, self-producers, electricity traders, electricity power supply directly with generators or traders. importers, unregulated consumers and special customers. It also includes contracts between generators and The Brazilian system is coordinated by the Brazilian distributors existing under the old regulatory framework, Electrical System Operator (ONS) and is divided into four until its expiration. New contracts must be adjusted to the sub-systems: Southeast/Center-West, South, Northeast new regulatory framework. According to the specifications and North. In addition to the Brazilian system there established in Law 9,427/96, unregulated consumers in are also some isolated systems; in other words, those Brazil are those that: (i) demand a capacity of at least 3,000 systems that are not part of the Brazilian system and are kW and choose to contract the supply of energy directly generally located in the northern and northeastern regions with generators or marketers; or (ii) demand a capacity in of Brazil, and have only coal or oil thermal power plants as the range of 500 to 3,000 kW and choose to contract the their unique source of energy. Regulation in Generation Companies Generation Agents, whether public generation as the Free Contracting Environment (ACL) in which concessionaires, IPPs or auto producers, as well as energy purchases are made directly between suppliers Marketing Agents, can sell electricity in two contracting and their customers. Regardless of the ACR or ACL, environments. First, the Regulated Contracting the sales contracts of the generators are registered Environment (ACR), where distribution companies in the Câmara de Comercialização de Energia Elétrica operate, in which the purchase of energy must be (CCEE) and form part of the basis for quantifying and done within the framework of the bidding process determining adjustments for differences in the short- coordinated by ANEEL; and the other denominated term market. 138 Enel Américas Annual Report 2016 According to market regulation, 100% of the energy During 2016, Law 13,360 was published with several demanded by the distributors must be satisfied through changes to the sector, among which we highlight: contracts in the current regulated environment. Thus, the regulated purchase price for the formation of tariffs for final > Permits for distribution companies that sell the surplus users is based on the average prices of tender offers, with contracts to free consumers independent bidding processes for ‘new energy’, ‘existing > Renewal of hydroelectric concessions <= costly 50MV energy’ and ‘reserve energy’. The “new” and “old” energy > Compensation to hydroelectric generators due to ther- auctions are made to meet the demand of the distributors mal generation outside the order of merit market. Reserve Auctions are made to increase the security > Changes in the periods of the auctions (terms) of the power supply in the National Interconnected System. Since 2015, the auction has been created for hydroelectric In search of a solution to the impacts caused by droughts, plants that have not extended their concession contracts, ANEEL, in December 2015, approved the conditions for according to Law 12,783/2013. This auction allows a part of a “renegotiation” of hydrological risk with the generation the generated energy to be sold in quotas and the other agents participating in the Energy Reassignment part in the free market (the percentage is defined in each Mechanism (MRE). To adhere to the “renegotiation”, it was auction). The winner is the entrepreneur who pays the necessary to waive the lawsuits. There was significant biggest bonus for the concession. adhesion by regulated market centers, however, there was The “new” energy tenders include long-term contracts (20- the conditions were not interesting. Currently, there is still 25 years for thermal plants, 30 for hydro, 20 for solar and a part of generators with provisional and/or precautionary wind), in which the new generation projects must cover measures that limit their risk and transfer part of the costs no adhesion of power plants in the free market, because the growth of demand forecasted by the distributors. The to consumers. “old” energy tenders consider shorter contracting periods and seek to meet the contracting needs of the distributors ANEEL annually validates, by resolution, the minimum that arise from the expiration of previous contracts, so and maximum values of the PLD, so that by 2017 the that energy can be sold at lower prices. Each bidding maximum and minimum PLD are set at R$533.82/MWh process is centrally coordinated, the authority defines and R$33.68/MWh, respectively. The calculation of the maximum prices and as a result, contracts are signed maximum PLD considers the variable costs of operation where all the distributors participating in the process buy of the thermoelectric plants. For the minimum PLD is fairly appointed from each of the generators. considered the costs of operation and maintenance of hydroelectric power plants. The Decree 5,163/2004 establishes that selling agents must ensure 100% of physical coverage for their energy Regarding regulated power biddings, in order to and power contracts. This coverage can be constituted by reconstitute the energy supply, in 2016, three biddings physical guarantees of their own generating plants or of were carried out with energy Assigned: any other plant, the latter through a contract of purchase of energy or power. Among other aspects, Resolution > 1 bidding A-1: 21 MW-mean, with two years of energy 109/2004 of ANEEL specifies that when these limits are supply. not met, agents are subject to financial penalties. > 1 bidding Energy Reserve: 95.4 MW-means, assigned In 2016, the economic context of the country has led to > 1 bidding A-5: 201,8 MW-means, assigned to Hydro a situation of surplus energy, so some measures were (17%), small hydro (41%), Biomass (40%) and Gas 2%) established to reduce surpluses of distribution companies, at an average price of 198.59 R$/MWh. to small hydros at an average price of 227,02 R$/MWh; such as the possibility of bilateral agreements between generators and distributors for temporary, partial or termination of the PPA. But these measures were not effective and still the distributors have surpluses over the review for consumers. 139 Regulation in Distribution Companies In the regulated market, distribution companies buy All tariff revisions and repositioning are approved by electricity through biddings that are regulated by ANEEL and ANEEL. organized by CCEE. Distributors must purchase electricity in public biddings. The Government also has the right to In tariff revisions (RTO and RTE), ANEEL reviews the call for special biddings for renewable electricity (biomass, rates in response to changes in energy costs and market mini hydro, solar and wind power plants). ANEEL and CCEE conditions. When adjusting distribution rates, ANEEL hold annual bids. The recruitment system is multilateral, divides the Annual Reference Value, that is, the costs of the with generating companies that sign contracts with all the distribution companies in: (i) costs unmanageable by the distributors that convene the biddings. distributor, also called “Parcel A”, and (ii) manageable costs by the distributor or “Parcel B”, the latter corresponding to The Concessions Law establishes three types of tariff reviews what we know as Value Added Distribution (VAD). or adjustments to final consumers: The Tariff Repositioning Index (IRT), which implies an annual adjustment of the The ordinary tariff review takes into account the entire rate for inflation; The Ordinary Tariff Review (RTO) to be tariff setting structure of the company, including the carried out every four or five years according to each costs of providing services, the costs of buying energy as concession contract, and the Extraordinary Tariff Review well as the return for the investor. Under its concession (RTE), which are carried out when a relevant event occurs contracts, Coelce and Ampla are subject to tariff revisions in the sector that significantly affects the value of the tariff. every four and five years, respectively. The basis of the In this way, the Law guarantees an economic and financial assets to calculate the return allowed to the investor is balance for a company in case that there is a substantial the replacement market value, depreciated over its useful change in its operating costs. In the event that the cost life from an accounting standpoint, and the rate of return of components for Parcel A, such as energy purchases or on the distribution asset is based on the Average Capital taxes, increase significantly within the period of two annual Cost Weighted, or WACC for a model company. The WACC tariff adjustments, the concessionaire may submit a formal is reviewed in each rate cycle. The value of the WACC for request to ANEEL for these costs to be Transferred to the distribution is currently in effect at 12.26% real pre-tax final customers. rate. 140 Enel Américas Annual Report 2016 The regulatory mechanisms ensure the creation of Values Applied for Tariff Banners in 2016 regulatory assets or liabilities, whose tariff rebuilding occurs in subsequent tariff adjustments (March 15 for Ampla and April 22 for Coelce). This mechanism has existed since 2001, and is called the Parcel A Securities Compensation Account (CVA). Its objective is to keep constant operating margins for the concessionaire in order not to allow tariff gains/losses due to the variation of Parcel A costs. The Securities Compensation Account (“CVA”) helps to maintain market stability and allows the creation of deferred costs, which is compensated by tariff adjustments based on the necessary rates to compensate for the deficits from the previous year. Description Favorable conditions for energy generation Less favorable generation conditions More expensive generation conditions More expensive generation conditions Green Yellow Red Level 1 Red Level 2 Applied when CMO is… (R$/MWh Additional in Tariff (R$/kWh) < 211.28 No additional fee > 211.28 < 422.56 > 422 < 610.00 + 0.015 + 0.030 > 610.00 + 0.045 In summary, with this mechanism, the cost of generation In December 2014 the distributors in Brazil, including the that is currently transferred to the customer only once a Enel Group, signed an addendum to the concession contract year (when the annual rate adjustment is made) will have that allows these regulatory assets (CVA’s and others) to be a monthly variation, therefore the customer will be able to part of the indemnifying assets at the end of the concession, have a better management of the electricity consumption. in the event that it is not be possible to compensate through In other words, consumers will be aware of a lower tariff tariffs at that time. Thus, in accordance with the IFRS rules, readjustment, since they are already paying a higher value the accounting of these assets is allowed. during the month. To cover the energy surcharge caused by the drought in The drive values of the flags for the year 2017 are still under 2014, the Government has created the ACR account through discussion between ANEEL, the agents and the society bank loans to be paid within two years for the tariff. In 2014 through the public hearing nº 91/2016. the distributors used an approximate amount of 18 billion reals of the ACR account, however, it was not enough to cover the entire deficit. A new loan to the ACR account was approved in March 2015 to cover the deficits of November and December of 2014. An extension of the repayment term for all loans was approved, which should now be paid in 54 months starting from November 2015. Due to the mismatches between the costs recognized in tariff and the real costs outside the management of the distributor, and intensified by the implicit costs of the drought, ANEEL, in January 2015, began to implement a system (known as Tariff Banners) of additional monthly charge on the consumer rate provided that the marginal cost of the system reaches levels above the regulatory standard. The objective of the regulator is to give the consumer an economic signal of the cost of the generation already in the subsequent month, moving forward an amount (of right) that the Distributor would only collect it in next tariff event. This mechanism - described below - consists of four levels of flags: green, yellow, red level 1 and red level 2. 141 Regulation in Transmission 2016 Adjustments (Ampla, Coelce and Enel CIEN) Any agent in the electricity market that produces or In 2016, the two distribution and the transmition companies consumes energy is authorized to use the Basic Network. in Grupo Enel in Brazil have had the following adjustments Free market consumers also have this right, subject to in their tariffs: compliance with certain technical and legal requirements. Free access is guaranteed by law and supervised by ANEEL. The operation and administration of the Basic Network is the responsibility of the ONS, which also has the responsibility Compañía Ampla Coelce of managing the dispatch of energy from the plants in Enel CIEN optimum conditions, involving the use of the interconnected system, reservoirs and thermal plants. % Adjustment in 2016 7.38% 12.97% 9.32% On April 5, 2011, it was published in the Official Gazette, the Ministerial Docks 210/2011 and 211/2011, which equate the two interconnection lines of the Energy Interconnection Company, S.A. to concessions of public service, with payment according to a regulated toll. The Annual Permitted Remuneration (hereinafter “RAP”) is adjusted annually, in June, by the National Broad Consumer Price Index (“IPCA”) with tariff revisions every four years. It was defined a Gross Remuneration Base of $1,760 million of Reals (US $885 million) and a Net Base of $1,160 million Reales (US $585 million). In 2012 ANEEL authorized the implementation of reinforcements in the transmission facilities, recognizing an additional investment of $47 million reals (US $23 million), in the Remuneration Base. The applicable remuneration rate was defined in agreement with the current regulation at 7.24% (real after tax). The authorization period is until June 2020, for Line 1, and until July 2022, for Line 2, with a welfare compensation for unamortized investments. 142 Enel Américas Annual Report 2016  Colombia Structure of the Industry Law 142 of the Home Public Services, and the 143, responsible for the planning and expansion of the network Electricity Law, structurally reformed the Colombian and the Superintendence of Industry and Commerce (SIC) electricity sector both enacted in 1994. According to Law which is the national authority for competition protection 143 of 1994, the different economic agents, private, public issues. or mixed, can participate in the activities of the sector, and have the liberty to develop their functions in the context of The CREG is empowered to issue regulations governing free competition in the market. To operate or start projects, technical and commercial operations as well as tariffs it must be obtained, from the competent authorities, the for regulated activities. The main functions of CREG authorization for the different environmental, sanitary are to establish the conditions for the progressive and water rights, and those where municipal sanction is liberalization of the electricity sector towards an open required. and competitive market, to approve charges for networks and transmission and distribution costs for the supply of The Ministry of Mines and Energy (MME) defines the regulated customers, to establish the methodology to Government’s policies for the energy sector. Other calculate and set maximum tariffs for the supply of the government entities that play an important role in the regulated market, establish standards for the planning and electricity industry include: Superintendence of Home coordination of the operations of the System, establish Public Services (SSPD), entity that monitors and audits technical requirements for quality, reliability and security all the public service companies; the Energy and Gas of supply, and protect the rights of customers. Regulation Commission (CREG), which regulates electricity, natural gas, liquefied petroleum gas (LPG), and liquid The Wholesale Energy Market in Colombia is based on fuels; the Energy Mining Planning Unit (UPME), which is a competitive market model and operates under open 143 access principles. The operation and administration of the the actors that provide electricity generation, transmission MEM is centralized in a Market Operator made up of the and distribution services, and the users of these services. Administrator of the Trade Exchange System (ASIC) and The marketing can be carried out along with other activities the National Dispatch Center (CND). of the electric sector or not. The generation sector is organized on a competitive basis. Transmission operates under monopoly conditions with a The electricity transactions in the WEM are carried out guaranteed annual fixed income which is determined by under the modalities of the spot market of energy (Short the new replacement value of networks and equipment term or daily market); Bilateral Contracts (Long Term and by the value resulting from the bidding processes Market) and Reliability Charge. Generation companies must that add new projects for the expansion of the National participate in the central office in a mandatory manner, Transmission System (STN). This value is distributed among with all of their generation plants or units connected to all the retailers in the market in proportion to their energy the Colombian system whose capacities are equal to 20 demands. The National Interconnected System (SIN) MW or higher (plants with capacities between 10 and 20 supplies 98% of the national demand. Non-interconnected MW can optionally participate). The generation companies systems serve isolated areas of the country. that participate in the central office must declare the commercial availability of their generation resources and Distribution is defined as the operation of local distribution offer the price at which they wish to sell it. This energy networks and regional transmission. Any customer can is centrally dispatched by the National Dispatch Center have access to a distribution network in which he pays (CND) with economic optimization criteria and respecting a connection fee. Distribution companies, or network the electrical and operational restrictions of the system. operators, are responsible for the planning, investment, operation and maintenance of electricity grids with Commercialization consists of the intermediation between voltages below 220kV. 144 Enel Américas Annual Report 2016 Regulation in Generation Companies The Colombian State can participate in the execution and exploitation of the generation projects as well as the private sector. The Law 142 of 1994, established that the legal regime of public services and the Law 143 of 1994 focused, particularly, in the service of electric power service, determined the types of entities authorized to provide residential public service, in this sense it was created the “Public Service Company” as the fundamental for this provision. In the short-term energy market, the CND receives, each day, the offers of prices and the declaration of commercial availability for each hour of the following day, of all the generators participating in the wholesale market. Based on this information, the CND performs an economic dispatch through an optimized procedure for the next 24-hour period of the following day, taking into account the electrical and operation restrictions of the system, as well as other conditions necessary to satisfy the expected energy demand for the next day in safe, reliable and economic manner from the cost point of view. Unlike the rest of the countries where the office is centralized based on variable costs of production, in Colombia, the office is based on prices offered by agents. The energy market is a market of adjustments, where the excess energy is sold or bought against the real energy demand of generators and retailers. The power exchange the determined spot price is established by the ASIC after the day of operation is established by means of an optimized procedure for the 24-hour period called the ideal dispatch, which implies an infinite transmission capacity in the network and takes into account the initial conditions of operation, thus establishing which generators had to be dispatched to satisfy the actual demand. The price paid to all generators that are dispatched for merit of price is the price of the most expensive generator dispatched every hour under the ideal dispatch. 145 The cost differences between the ‘economic dispatch’ and closing value in the auction for the strong energy or the ‘ideal dispatch’ are called ‘restriction costs’. The cost Confidentiality Charge. When this strong energy is required, of each restriction is allocated to start with to the agent what happens when the spot price overpasses the shortage responsible for the restriction and when it is not possible prices, an agent fulfilment balance, where they verify the to identify an agent it is distributed proportionally to all ideal dispatch if the agent covered its OEF with their own Colombian system retailers according to their demanded resources and delivered surplus or another agent covered energy, and these costs are transferred to the final the OEF, in which case the differences valued at the spot customers. price are balanced. Generators connected to the Colombian system can also In 2014 the CREG issued the Statute of Risk of Shortage, participate in the “Reliability Charge”, which is a mechanism which is a mechanism of last resort, that acts when under that aims to encourage investment in the generating park conditions of critical hydrology, the market fundamentals do to ensure that the country’s demand is met in the long run. not behave as expected. In general, the scheme consists The Charge consists of the assignment of Firm Energy in the implementation of market monitoring indicators, Obligations (OEF) through a descending auction for new which helps to identify if the price signals (power exchange) agents interested in developing generation projects, who is coherent with future energy estimates and current must guarantee the System that amount of energy for a hydrological conditions of the system. given period. The allocation for existing generators is made annually and for new projects for up to 20 years. The OEF If market monitoring parameters show alert and risk is a commitment on the part of the generating company, conditions, we proceed to declare a risk of shortage period, backed by its physical resources, which provide support to basically consisting of a scheme of sale and embalming that firm in the production of energy. The generator that of energy, which guarantees that the system will have acquires an OEF will receive fixed compensation during the the necessary reserves to fulfill the demand. If water commitment period, whether or not the fulfillment of its containment is achieved through the intervention of supply obligation is required. prices of hydraulic agents with capacity in their reservoirs, thus allowing the use of the thermal resources necessary to The price for each KWh hour of OEF corresponds to the ensure the reliability of the system. 146 Enel Américas Annual Report 2016 Regulation in Distribution Companies In Colombia, distribution companies are free to purchase updated monthly according to the producer price index. their supplies, being able to define the conditions of the The methodology for calculating distribution charges public bidding processes to acquire the energy required for includes an incentive scheme for administration, operation the regulated market and may also go to the spot market and maintenance costs based on the quality of service. to buy energy. The price paid by the end user reflects an For energy losses, the regulation establishes a path of average of the purchase price. Since 2004, CREG has been recognized loss indexes to be included in the tariff. working on a proposal to modify the contracting operation in the Colombian market, called Mercado Organizado -MOR- The review of distribution charges began in 2013 with the that would become an electronic system of contracts. publication of the remuneration methodology proposed by This mechanism would replace current tenders for energy resolution CREG no. 043/2013. These bases were increased auctions with standardized commercial conditions, where by CREG Resolution No. 079/2014 which contains the the demand to be contracted would be treated as a single purposes and guidelines for remuneration of distribution for aggregate demand. the period 2015-2019 and draft resolutions that have been submitted for consultation, Resolution CREG No. 179/2014, Distribution charges are set by the CREG based on the Resolution CREG No. 024/2016 and Resolution CREG Nº new replacement value of existing distribution assets, 176/2016 define a proposal of remuneration methodology. cost of capital, non-electric assets; as well as operational Accordingly, such project bases and methodology and maintenance costs for each company, and are defined incorporate replacement incentives including depreciation for four different voltage levels, as follows: Level 1 less as part of the rate formula and an investment plan that will than 1 kV, Level 2 greater than or equal to 1 kV and less allow the incorporation of new technology, that will improve than 30 kV, Level 3 greater than or equal to 30 kV and service quality and control energy losses. It is expected that less than 57.5 kV and Level IV up to or equal to 57.5 kV the new methodology of remuneration for distribution and and less than 220 kV. Voltage Levels 1, 2 and 3 are called positions published will be released in the first quarter of Local Distribution Systems (SDL) and Level 4 is called the 2017. Regional Transmission System (STR). In 2009, after auditing the information reported by the and 095 of 2015 that define the methodology for calculating companies, CREG determined the applicable distribution the WACC for electricity transmission and transportation, as charges, which are set for a period of five years, and well as distribution of natural gas and distribution. In addition, CREG issued resolutions no. 083/2014, 112/2014 147 Regulation of Transmission Transmission networks operating at 220 kV or above present value of cash flows necessary to carry it out. constitute the National Transmission System (STN). The transmission fee includes a charge that covers the The revision of regulated transmission charges began in operating costs of the facilities, and a charge for use that 2013 with the publication of the pay rate methodology applies only to the merchants who transfer it directly to proposed by resolution CREG no. 042/2013. These pay the final users. rate is complemented by the development of the purposes and guidelines for the remuneration of transmission for The CREG guarantees transmission companies a fixed the period 2015-2019, which was presented in resolution annual income. This income is determined by the CREG No. 078/2014 and draft resolutions that have reposition value of the network and equipment, and by the been submitted for consultation, Resolution CREG No. resulting value of the bidding process that have awarded 178/2014, Resolution CREG Nº 023/2016 and Resolution new projects for the expansion of STN. This value is CREG Nº 177/2016 that define a proposal of remuneration attributed the retailers the STN in proportion to the energy methodology. This resolution was defined by the MME and demanded. aims to guarantee adequate assets and timely extensions. It is expected that the new methodology of remuneration The construction, operation and maintenance of the new of the transmission and the new charges of transmission projects is assigned to the company that offers the lowest will be published during the first quarter of 2017. Regulation in Commercialization The commercialization market is divided into regulated the CREG for each seller. The rates include, but are not customers and unregulated customers. Customers in limited to, costs of energy supply, transmission charges, the free or unregulated market can freely contract their distribution charges and a margin of commercialization. electrical supply directly from generator or distributor In addition, the final costs of the service are affected by acting as traders, or from a pure trader. The market for subsidies or contributions that are applied according to the non-regulated customers consists of customers with a socioeconomic level of each user. maximum demand of more than 0.1 MW or a minimum monthly consumption of 55 MWh. Trading charges for regulated customers are established Trading can be performed by generators, distributors or The main changes in this formula were the creation of independent agents that meet certain requirements. The a monthly fixed charge that covers operating expenses parties freely agree on transaction prices for unregulated plus a variable of income for traders covering credit in accordance with CREG Resolution no. 180/2014. customers. risk, working capital subsidies and other selling costs. Selling costs have been approved individually for traders The trader of energy is responsible for billing electricity during 2015 and 2016. In the case of Codensa, in 2015, costs to final consumers and transferring payments to the commission published resolution No. 120/2015 different agents in the industry. Trading for regulated approving Codensa’s selling expenses. The new tariff customers is subject to the “Regulated Freedom was applied in January 2016. In the case of EEC, in 2015, Regime” in which tariffs are set by each seller using a the commission published Resolution No. 186/2015 combination of the general cost formulas determined by approving Codensa’s selling expenses. The new tariff the CREG and the individual trading costs approved by was applied in June 2016. 148 Enel Américas Annual Report 2016 Environmental Regulation The legal framework for environmental regulation in Colombia was established in Law 99/1993, which also created the Ministry of Environment as the authority for the definition of environmental policies. The Ministry defines, issues and executes policies and regulations focused on the recovery, conservation, protection, organization, administration and use of renewable resources. Any entity contemplating the development of projects or activities related to the generation, interconnection, transmission or distribution of electricity, which may cause an impact, deterioration and/or introduce significant or notorious changes to the environmental landscape, must apply for an environmental license prior to the start of activities For the power plants already operating, through Law No. 99, it was established that generating plants that have a total installed capacity of more than 10 MW, should contribute to the conservation of the environment, transferring to municipalities and environmental corporations in the area where the power plants are located, a percentage associated with the generation of energy. Hydroelectric plants must pay 6% of their generation and thermal plants must pay 4% of their generation, with rates that are determined annually. In 2011, Decree 3,570 established the new structure of the environmental sector thus creating the Ministry of Environment and Sustainable Development (previously, the functions of the Ministry of Environment were established along with the functions of the Ministry of Housing). In the same year, Decree 3.573 created the National Environmental Licensing Authority as the entity responsible for granting and monitoring environmental licenses, permits and procedures of the Ministry of Environment and Sustainable Development. In Colombia, Law 1,715 was issued in 2014, which regulates the integration of NCREs into the National Energy System, with the objective of promoting the development and use of non-conventional sources of energy and promoting efficient management of the energy. 149 In 2015, the Ministry of Mines and Energy issued Decree In general, the environmental regulation for the electricity 2143 of 2015, which defines the guidelines for the sector has been focused on regulating aspects related to: application of fiscal and tax incentives established in Law i) emissions from thermal plants; (ii) formulation, issuance 1,715. From this, procedures are being designed to access and implementation of the National Policy for Integral the benefits proposed in the already mentioned law. In that Management of Water Resources, updating the regulations same year, associated with the COP21 in Paris, Colombia associated with landfills, regulation the methodology for participated in this conference with the commitment of the calculation of the environmental flow, and structuring INDC to reduce 20% of emissions with respect to the and management of watersheds) ; (iii) environmental baseline until 2030. licensing and compensations, for subtraction of forest reserves and exploitation, for loss of biodiversity for In 2015, on the recommendation of the OECD, the projects bound to environmental licensing; (iv) updating regulation of the environmental sector was consolidated the regulatory framework for environmental licensing and in Decree 1076 of 2015. regulating the environmental sanctioning regime. 150 Enel Américas Annual Report 2016  Peru Industry Structure The general legal framework applicable to the Peruvian the Environment, is responsible for the supervision and electricity industry is primarily comprised by the Electric enforcement of the environmental obligations contained Concessions Law (Decree Law Nº 25,844 from 1992) and in the approved environmental instruments. its regulatory norms. The Economic Operation System Committee (COES) is the The Ministry of Energy and Mining (MINEM) defines National Electric Interconnected System Operator (SEIN), energy politics applicable on a national level, jointly coordinates the dispatch of generation units in function of regulates with the Ministry of the Environment, the the minimum cost, prepares diverse studies that serve as environmental aspects applicable to the energy sector and a base to annually calculate the bar prices, manages the is the competent authority for the granting and expiration short term market, and elaborates the Guaranteed System of authorizations and concessions for the activities related Transmission Plan. In the COES generating, transmitting, to the generation, transmission and distribution of energy. and distributing companies are represented, as are Big Users (free clients whose consumption is superior to The Supervising Organism of the investment in Energy 10MW). and Mining (Osinergmin) is the regulatory entity that controls and oversees the enforcement of legal and In rural areas there are small isolated electric systems technical norms related to the electricity, hydrocarbon, and that supply electricity in specific areas, which represent mining activities, and enforces the obligations established approximately 6% of the total national production. in concession contracts. On its part, the Regulating Osinergmin Tariffs Agency (GRT) is the competent authority The main characteristics of the electric industry in Peru for the determination of regulated tariffs. Osinergmin also are: (i) the separation of the three activities: generating, controls and supervises the bidding processes required by transmitting, and distributing; (ii) open market for the distributing companies for the purchase of energy from supply of energy to unregulated clients; (iii) a regulated generators. price system, primarily based on a long and short term Meanwhile, the Environmental Evaluation and Enforcement Organism (OEFA), which depends on the Ministry of bidding regimen. 151 Regulation of Generation Companies Generation companies that own or operate a generation Due to the introduction of bidding mechanisms, a large portion plant with an installed capacity larger that 500 KW require a of the contracts to sell energy to distributing companies to definitive concessions given by the MINEM. get the client’s attention, comes from these bids. Just a small COES manages: dispatch coordination of electric operations, maintained under the bilateral contract scheme. the determination of the spot prices, and the management of economic transaction that occur in the SEIN. Another norm that impacted the electric market was Urgent portion of the electricity bought by distribution companies, is Decree N° 049-2008, which introduced the so-called “Ideal Generation companies can sell their energy directly to Marginal Cost”, which assumes that for economic dispatch distribution cpmpanies and free clients and liquidate their effects, SEIN marginal costs in the short term are determined differences in the spot market at marginal costs. The sales to considering that there are no restrictions in natural gas non-regulated clients are carried out in prices and conditions (production or transport), nor for electricity transmission; mutually agreed, which includes fees and compensations by and that marginal costs cannot be superior to a limit value the use of transmission systems, and if it is the case, fees defined by the Ministry of Energy and Mining, said Urgent for the use of the distribution channels. Decree is valid until October 1, 2017. The Electric Concessions Law allows the subscription of In Peru the payment by capacity exists, where it is given by bilateral contracts of a price no greater than the Bar Rates, the amount that compensates the development of turbine in the case of regulated clients, or at a price agreed by all gas, as a marginal unit to contribute to the system’s demand. parts in the case of unregulated clients. As well as this Similar to Chile, the payment by capacity is independent from bilateral method, Law 28,832 from 2006, denominated the dispatch, and remunerates the availability and contribution Law to Ensure Efficient Development of Electric Generating, to the aimed reserve margin decided by the competent also established the possibility that distributors can satisfy authorities. regulated and unregulated client demands by concluded agreements after a power bidding process and energy supervised by Osinergmin. The approval of this mechanism is important for the generators because it allows them to dispose of a stable price during the contract life, which is not set by the regulator and can have duration of 20 years. 152 Enel Américas Annual Report 2016 Regulation for Distribution Companies The electricity tariff for regulated clients includes charges tariff system allows a greater return to the distribution for energy and power, for the generation and transmission, companies that are more efficient than the model company. and the Distribution Added Value (VAD) that considers a The preliminary tariffs are determined by taking as a base the regulated return for investments, fixed operating charges results of a study hired the company, corrected according to and maintenance, and a standard percentage for energy the Osinergmin. Preliminary tariffs are checked to ensure losses in distribution. that the internal return rates are 12% with a +/- 4% variation. Also, the tariffs are indexed to the exchange rate, the price On September 2015 the Decree N° 1,221 was published, index to the greatest (IPM), and the commodities price as through which the fixed VAD (Distribution Added Value) is copper and aluminum, with which Peru has no exchange establishes that it will be carried out every four (4) years and risks. will be calculated for each company (before this decree the VAD was calculated for a company that was representative During the last setting tariff process, the OSINERGMIN of the group and typical sector, and this VAD is applied to all defined the Edelnor tariffs for the period of November of the companies that made up the respective group). Also, 2013 to October 2017. The same have been extended until an additional charge to the fees in technologically innovative October 31, 2018, through the Ministerial Resolution N° projects and efficient energy projects previously approved 530-2016-MEM/DM published in December 2016. by the Osinergmin. The real return on the investment of a distribution company depends on its performance with respect to the standards set by Osinergmin for a theoretical model company. The 153 Regulation of Transmission The transmission activities are under different regimes. The installations built before 2006 are divided in the Main System, that is for common used and allows the flow of energy through the national net, and the Secondary System are flow reds mostly unidirectional and are useful for evacuating energy from one generator plant or to take energy to the final consumer. The Transmission Plan, elaborated by the COES and approved by the MINEM, determines the development of the Guaranteed System lines, which are bid through a BOOT framework with a maximum duration of 30 years. The transmission concessions of the Guaranteed System receive an annual fixed income from said bids. The Complementary System lines are developed through investment plans presented by the agents and approved by the Osinergmin, an entity that calculates the average annual cost to remunerate for each installation, considering the standard investment, operating, and maintenance costs, with an updated rate of 12% before tax and a lifespan of 30 years. 154 Enel Américas Annual Report 2016 Environmental Regulation The environmental legal framework enforceable in the activities related to energy in Peru is stated in the Environmental General Law (Law N° 28611) and in the Environmental Protection Rules for Electric Activities (Supreme Decree 029-94-EM). In 2008, the MINEM enacted the Supreme Decree 050- 2008 to boost the generation of electricity through Unconventional Renewable Energy (ERNC). Said decree stipulates that up to 5% of the SEIN demand can be supplied by using ERNC. This 5% cap could be checked by competent authorities by putting in service the Renewable Energy National Plan. The technologies considered as renewable energy are: biomass, wind, tidal, geothermal, solar, and mini-hydroelectric (hydroelectric smaller than 20 MW). Until December 2016 the ERNC percentage was 2.6% in the SEIN demand, as a result of the fourth bid adjudicated in 2016, the percentage will be 4,6% for December 2018. 155 Description of the Business by Country 157  Electricity Generation In this segment, Enel Américas owns operating subsidiaries in Argentina, Brazil, Colombia and Peru. As a whole, the gross installed capacity of the Enel Américas Group reached 11,014 MW as of December 2016 and the consolidated electricity generation amounted to 40,439 GWh, while energy sales totaled 50,575 GWh. In the electricity industry, the business segmentation between hydro and thermal generation is natural, since the variable costs of generation are different for each method of electricity production. Thermal generation requires the purchase of fossil fuels and hydroelectric generation requires the water that comes from dams and rivers. 54% of our consolidated generation capacity comes from hydroelectric sources and 46% from thermal sources. Terefore, the definition of the generation company’s commercial policy is relevant for the proper management of the business. Electricity Transmission The electricity transmission business of Enel Américas is mainly performed through the interconnection line between Argentina and Brazil, Enel Cien, subsidiary of Enel Brasil, whose transport capacity is 2,100 MW. Electricity Distribution The distribution business is conducted through Edesur in Argentina, Ampla and Coelce (owned by Enel Brasil) in Brazil, Codensa in Colombia and Enel Distribución Peru (former Edelnor) in Peru. During 2016, our main distribution subsidiaries sold 62,714 GWh. At present, Edesur, Ampla, Coelce, Codensa and Enel Distribución Peru serve the main cities in Latin America, providing electricity service to more than 14.1 million clients. 158 Enel Américas Annual Report 2016  Argentina Electricity Generation Enel Américas S.A. participates in the electricity generation Participations in installed capacity and in business Groups indirectly through Enel Argentina S.A.’s subsidiaries Enel for 2016 are distributed as follows: Generación Costanera S.A. (Costanera), Enel Generación El Chocón S.A. (Chocón) and Central Dock Sud S.A. (CDS). Participation in installed capacity and in Business Groups in 2016 The latter results from the absorbtion of Endesa Américas ENEL S.A., (controlling company of Costanera and Chocón) and SADESA Enersis Américas S.A. (controlling company of CDS), by AES Enersis Américas S.A., becoming effective on December REGIONAL GOVERNEMENTS 1, 2016. On that date, the equity of Enersis Américas was PAMPA incorporated to the total equity of both companies and every FONINVEMEM rights and obligations succeeded the original companies in NATIONAL GOVERNMENT every right and obligation, and the company name changed OTHERS to Enel Américas S.A. 13.6% 11.3% 9.4% 8.4% 9.8% 8.3% 21.2% 17.9% Among the most relevant news of he year, worth is to This operation was carried out under the scope of the mention the biddings carried out by the new Government corporate reorganization pof the Enel Group, S.p.A. in Latina for the creation new generation offer. In that sense, the America, whose main objective was to divide the generation Thermal Bidding was performed under Resolution 21/2016, and the distribution activities in Chile from those activities where 3,108 MW of new thermo generation capacity were developed in the other countries where the company awarded, and the biddings made under the RENOVAR operates. program, in order to create the entrance of new generation capacity coming from Renewable Energies. In this program, Later, Enel Américas S.A. transferred its entire shareholding 59 projects were awarded for a total of 2,453.5 MW. The in Enel Generación El Chocón S.A., Enel Generación RENOVAR program is included within the context of Law Costanera S.A. nd Central Dock Sud S.A. to Enel Argentina 27,191, which defines a path for the participation in that type S.A. of energy in the market that in 2025 should reach 25%. Costanera, Chocón and CDS own together 4,537 MW of installed capacity. This capacity represented 13.6% of the total capacity in the Argentine SIN (Sistema Interconectado Nacional) by the end of 2016. Electricity generaion of these companies reached on December 31, 2016 a generation of 13.124 GWh, equivalent to 9,6% of the total generacion of Argentina. It should be noted that, among the most important business groups that participates in the Argentine Electricity Market in generation are: AES, SADESA and PAMPA ENERGIA, company that in 2016 acquired PETROBRAS ARGENTINA. Other companies with participation in the generation business are YPF ENERGIA, CAPEX and PLUSPETROL. 159 Enel Generación Costanera S.A. Costanera is located in the city of Buenos Aires and has With regards to the combined cycles, its worth to highlight six steam turbine units totalling 1,131 MW, which can that the Mitsubishi combined cycle had to absorb, due to generate with natural gas or fuel oil. It also operates two the location of its cooling water outlets over the mouth combined cycles of 851 MW and 322 MW respectively; of the Stream to the La Plata River, the larger quantity of and its total installed capacity is 2,304 MW. water hyacinth that arrived to the port of Buenos Aires, thus creating a grater unavailability than expected and On October 6, 2016, the Company’s Extraordinary the need of an operation of emergency maintenance. General Shareholders’ Meeting approved the amendment of Article 1st of the bylaws, where company name was In order to cope with the generation during the winter modified from Sociedad de Central Costanera S.A. for months, Costanera postponed the maintenance of the “ENEL GENERACION COSTANERA S.A.” As of the date largest generator of the Combined Cycle Steam Unit, of the current financial statements, the modification of which finally stopped operations in October. Because of the bylaws is still under registration process. the length of this maintenance, scheduled for 80 days, Throughout this year, thermal dispatch maintained a during the critical days in December, in a work without high use of liquid fuels and was strategic to sustain the precedents, the Company made the modifications demand. As a result of the operation of these power needed for the operation of the two Turbine Units in open and therefore the unavailability of this Generation Unit plants, net generation of the Conventional Units of cycle. Costanera was 2,179 GWh, and the combined cycles net generation reached 3,534 GWh. Worth is mentioning The effort made and the contribution of these machines that during 2016 the Rehabilitation works of every unit in those days of high demand to the 132 KV systems has included in the TV Project were completed. been acknowledged by the administrators of the market. 160 Enel Américas Annual Report 2016 With regards to the Siemens combined Cycle (CCI), due to to prioritize the conservative management in order to the several postponements due to the systems needs in secure the necessary financial resources for the adequate the first place and the delays of the imports authorizations operation of the power plant. afterwards, it wasn’t possible to carry out the the tasks denominated LTE (Life Extension) during this year, being In August 2016, CAMMESA and Costanera formalized the postponed for the winter of 2017. mutual agreement and assignment of credit guarantees, for an amount of up to 1,300 million pesos needed In March 2016, the Secretary of Electric Energy, which is to finance the power plant operation. The stablished subordinate to the Ministry of Energy and Mining, through methodology and the repayments will be in a maximum the enactment of Resolution N° 22/2016, updated the of 48 monthly and consecutive installments, and with a 12 remuneration values of Resolution SE N° 482/2015, with months grace period, starting from the delivery of the last retrospective implementation in February 2016. partial advance payment, which will be subject to interests at a rate equivalent to the average monthly yield get by The implementation of Resolution S.E.E. N° 22/2016 CAMMESA in its financial placements. created an increase of fixed costs of nearly 70% for Costanera.  The remuneration of variable costs increased Costanera will guarantee the reimbursement of advance 40%. The remuneration concept for non-recurring payments through the creation of a pledge with first grade maintenances increased 60%, while there was no change register over the COSTTV 01-02-03-04-06-07 unitas and in additional remuneration. with the transfer of 100% of its credits in the Wholesale Electricity Market (Mercado Eléctrico Mayorista). In the finance area, during 2016 the Company continued with the financial strategy carried out in the previous years, 161 Enel Generación El Chocón S.A. Hidroeléctrica El Chocón SA is a hydroelectric generation The hydrological year starting April 1st has been characterized company, which operates El Chocón and Arroyito power as very dry, accordingly the contribution of the hydrological plants, located on River Limay. It’s located in the provinces basins of the Rivers Limay and Collón Cura were scarce. The of Neuquén and Río Negro. The hydroelectric complex has accrued spill as of December 31, 2016 was 8,225.7 Hm3. 1,328 MW total installed capacity and includes El Chocón Net generation recorded for these power plants during the plant, with 1,200MW installed capacity (artificial reservoir’s year was 2,386 GWh. hydroelectric power plant) and Arroyito plant, with 128 MW installed capacity, both using the waters of Rivers Limay The gross generation in the same period reached 2,260.5 and Collón Curá for generation. GWh, and the total generation of El Chocón was 1.800,7 GWh, while Arroyito power plant gross generation amounted El Chocón is located in the Comahue region, consisting to 459.8 GWh. of the Argentinean provinces Río Negro, Neuquén and the southern areas of Buenos Aires provinces, over the With regards to the operational aspect, in 2016 the Limay River, sobre el río Limay, 80 km upstream from the accumulated availability of El Chocón-Arroyito complex confluence with Neuquén River. Arroyito is the compensator was 93.56%, having satisfactorily completed Scheduled dam of El Chocón and is located in the same riever, 25 km Maintenance for both plants; major maintenance after downstream. 20,000 hours of service, units G2CH and G3CH; major maintenance of the main switch and replacement of the On October 27, 2016, the Extraordinary General Shareholders’ speed/ charge regulator, units G1Ch, G2Ch; G3Ch G4Ch Meeting of the Company approved the amendment of and G6Ch and the oil change for biodegradable fuel in article 1st of the Company’s bylaws, where company name the emergency gates of units G1Ch, G2Ch, G3Ch and was modified from Sociedad Hidroeléctrica El Chocón S.A. G6Ch. In Arroyito Power Plant the transformer valves to “ENEL GENERACION EL CHOCON S.A.”. As of the date Y108T (ARR3) were replaced. The latter maintenances are of the current financial statements, the amendment of the added to to the repair of minor failures and the tasks bylaws’ approval is still pending from the General Inspection scheduled for regular maintenance of equipment and of Justice. facilities. 162 Enel Américas Annual Report 2016 Worth is to mention that during 2016 the Company Regarding the development of own personnel and continued with the project of replacing mineral oil by contracros’ activities, in 2016 there have been no accidents biodegradable oil completing the changes in the six gates same as the three previous years. The indicators IFG y IGG of El Chocón power plant, reaching important improvement = 0 reaffirm a very good year in terms of safety of own and from the environmental point of view, which adds to the the contractor workers. installation in 2015 of the hydrocarbon separators in Arroyito power plant, in order to avoid possible losses of oil in the In the finance area, despite the challenging scenario for the exchangers of water/ oil of the bearings of the turbine that electricity sector, the Company paid all the debt maturities might reach Limay River. Mineral oil was delivered for its of the year, comprising a syndicated loan denominated in final disposal. pesos, made on September 14, 2016 with the payment of the last installment of capital of $17.94 million, as well In the the regulatory area, in March 2016, the Secretary of as the maturities of the bilateral loan with Deutsche Bank Energy Register, which is subordinate to the Ministry of AG, Standard Bank Plc and Itaú BBA Securities, paying on Energy and Mining, through the enactment of Resolution N° February 15, 2016 the last installment of capital of US$ 3.6 22/2016, updated the remuneration values of Resolution SE million. Worth is to highlight that the company doesn’t have N° 482/2015, with retroactive application to February 2016. any financial debt as of the end of the period. The implementation of Resolution SEE Nº 22/2016 triggered an increase of remureation of fixed costs in 120% and a The main investment projects to carried out in 2017 are: i) growth of variable remuneration of 40% for Enel Generación Major Maintenance of the Machine Switch of El Chocón El Chocón S.A. Additional remuneration didn’t change and power plant, ii) Replacement of the Speed/ Load of a turbine the remuneration concept for non-recurring maintenance in El Chocón Power Plant, and iii) Replacement of the increased 25%. Excitement sysem of a generator of Arroyito power plant. As embodied in Resolution SEE N° 22/2016, the norm is he result of a temporary measure pending the new regulatory framework announced by the government. 163 Dock Sud Power Plant Dock Sud power plantis located in Avellaneda district, Buenos Aires. Dock Sud owns and operates a sigle generation power plant with two units, with a total capacity of 870 MW. Dock Sud power plant has four gas turbines and one steam turbine. Two of the gas turbines and the steam turbine comprises once combined cycle power plant. The energy generadated by Dock Sud in 2016 amounted to 5,025 GWh (85.71% NG, 14.27% OG and 0.02% Biodiesel), representing 5.59% of the thermal generation and covering 3.78% of the SADI demand. On December 31, 2016, the installed capacity of Central Dock Sud S.A. represented 2.6% of the total installed capacity in the SIN. With regards to the operational field and in relation to the maintenance of the combined cycle power plant, on November 23, 2016, CDS signed a contract with GE Global Parts & Products for the supply of parts and maintenance related with the Major Maintenance to take place in 2018. In relation to the loan obtained from CAMMESA, whose purpose was to finance the costs related to the combined cycle major maintenance performed in 2015 for $618.26 million, worth is to mention that on March 18, 2016, the compensation between the CDS debt with CAMMESA was performed, which was originated in such loan and also the credits that CDS had due to the Remuneration for Non-recurring Maintenance. Such compensation created a capital debt of $569.14 million. This will be paid in 36 monthly installments, and the first installment was compensated in April 2016. In March 2016, the Secretary of Electric Energy, subordinated to the Ministry of Energy and Mining, through the enactment of Resolution N° 22/2016, updated the remunerative values of Resolution SE N° 482/2015, with retroactive application as of February 2016. For CDS the implementation of Resolution S.E.E. N° 22/2016 triggered an increase of remuneration of fixed costs of nearly 70%.  The remuneration of variable costs increased 40%. The remuneration concept for non- recurring maintenance increased 60%, while additional remuneration didn’t experience any changes. 164 Enel Américas Annual Report 2016 Activities and Projects in Generation Project under development: capacity expansion of Nueva Costanera Power Plant In the context of the changes in regulation that the Argentine government is performing and the variety of biddings that have been done, and new ones that the government plans to convene to carry out new investments in energy, the Company is analizing the potential installation of a new combined cycle in Costanera. The purpose is to compete for electricity energy contracts in those biddings that the Ministry of Energy and Mining might offer during the second semester of 2017, and where a process has been already opened for the potential interested entities to present projects in this process. The project would consist on the installation of a combined cycle unit, with an installed capacity of 450 MW, connected to the voltage bars of 220 kV and 132 kV of the existing Costanera substation. The operation would work with two types of fuel (Natural Gas or Diesel). Nevertheless, there’s a preference for natural gas and, when it’s not available, diesel would be used. In November 2016, started the bidding process for main works. Meanwhile, the studies needed to get the environmental licence and the connection to the electricity grid were completed in 2015 and in December 2016 it was submitted to the corresponding authorities. The construction period is estimated in 30 months, depending on the technical configuration chosen. The commissioning date for the new unit is estimated between 2019 and 2020, depending on the bidding date defined by the Ministry of Energy and Mining; in addition to the subscription date of the contracts awarded in such process. Improvements in Vuelta de Obligado Power Plant With regards to the Vuelta de Obligado S.A. (VOSA) project, which includes the installation of a combined cycle of nearly 800 MW of installed capacity, during 2016 the two gas turbines of 270 MW of capacity each one continued operating in simple cycle. The commissioning of every installation of the new power plant is planned for the fist semester of 2017 – which is comprised by a Two Gas Turbine Combined Cycle and One Steam Turbine. Once the combined cycle is put in motion, the devolution of the debt of CAMMESA with generation companies will start. These generation companies contributed to such project through a 10-year supply contract at a 30-day Libor rate plus 5%, pursuant to the Generators Agreement 2008-2011. Land Reserved for Future Projects In Argentina, Enel Américas doesn’t have any land reserved for future projects. 165 Electricity Distribution Edesur Edesur’s main purpose is the distribution and and answer the opinions made in relation to the Tariffs commercialization of electricity in the southern area of Proposal presented previously by the companies with Buenos Aires, comprising two thirds of the city of Buenos regards to the definition of tariffs to be applied, and to Aires’ area and twelve districts of Buenos Aires province, transfer the considerations of the Subsecretary of Tariffs covering 3,309 km2, for a period of 95 years starting from Policy Coordination of the Ministry of Energy and Mining August 31, 1992. of the Nation, those subjects planned that are not under the responsibility of such entity. This period includes an initial one of 15 years and eight additional periods of 10 years each. On February 5, 2007, It’s expected that the regulatory communications included the National Electricity Regulatory Entity (ENRE) resolved in the new Tariff Chart and the Tariff Regime will be to extend the initial period for five additional years, from the performed in January 2017. completion of the Integral Prices’ Revision (RTI) process. The concesion contract establishes the obligation of to Later, on January 27, 2016, the Resolution MINEM N° provide electricity as requested by the owners or residents 7/2016 was enacted, which instructed ENRE, among other of the property within the concession area, to comply with things, to: perform an adjustment to the VAD in the tariff certain rules related with the electricity delivered, to comply charts of the Company, on behalf of the RTI (Integral Fees with the operational demands related to the maintenance Renegotiation) and the framework of the Transitory Tariff of distribution assets and to bill clients according to actual Regime established in the settlement Act (Acta Acuerdo), measurements. and to carry our every act needed to proceed the RTI, which should come into force before December 31, 2016. In 2016, Edesur delivered electricity power service The process and schedule for the RTI was established to 2,504,558 clients, which represents 1.01% growth through Resolution ENRE 55 as of April 5, 2016. compared to the previous year. Of the total, 87.8% are residential customers, 10.9% are commercial customers, Within the framework of the RTI process, on October 0.9% are industrial customers and 0.4% are other 28, 2016 the public hearing was held to inform and hear users. Energy sales reached 18,493 GWh, and included the opinions with regards to the tariffs proposals that the the distribution service (tolls) a grandes usuarios, distribution companies Edesur and Edenor presented to manteniéndose niveles similares a los del año anterior. The the ENRE according to Resolution ENRE N° 55/2016. distribution was: 45.5% residential, 24.4% commercial, On December 30, 2016, the ENRE enacted Resolution N° 626, approving the document denominated Final During 2016the energy losses index reached 12.04%. Public Hearing Resolution with the purpose to inform 7.6% industrial and 22.5% others. 166 Enel Américas Annual Report 2016 Distribution Activities and Projects Commercial Systems Renewal Quilmes Substation Investment was higher than $133 million. A new 40 MVA The Company awarded and launched the project of transformer was installed, increasing capacity from 120 to commercial systems renewal. Accenture was chosen for 160 MVA. A new Medium Voltage board was installed with the implementation of the solution based on the World- one section of 13.2 KV. Also, 6 new feeders were installed Class SALESFORCE and SAP IS-U products. and a new 34.8 kilometers Medium Voltage grid was built. Gerli Substation Investment amounted to $183 million. Two transformers of 40 MVA were replaced by two of 80 MVA, a new Medium Voltage board was incorporated with two sections of 13.2 KV and 10 new feeders were installed, which created a 39 The latter benefited 130,000 users from Quilmes, Solano, Florencio Varela, Bernal, Ezpeleta, Berazategui and Plátanos, while increasing installed capacity. Shaft Chambers kilometers Medium Voltage grid. This project comprises the installation of underground MT/BT Transformation Centers in areas where the grid The latter benefited 76,000 users from Gerli, Lanús Este is evaluated as vulnerable. In 2016, 36 new chambers and Valentín Alsina, which doubled the installed capacity. were installed in CABA distributed in the following neighborhoods: Villa del Parque, Villa Santa Rita, Villa Gral Mitre, Villa Crespo, Villa Devoto, Flores, Floresta, Mataderos, Liniers, Balvanera, Almagro, Boedo, Parque Centenario and Villa Soldati. Santa Rita Subestation Investment was higher than $147 million. Two 40 MVA transformers were replaced by two 80 MVA, a new Medium Voltage board was incorporated with two sections of 13,2 KV and 9 new feeders were installed, which created a 26 km kilometers Medium Voltage grid. The latter benefited 116,000 users from Villa del Parque, Santa Rita, Villa Mitre, Paternal, Devoto, Villa Crespo, Chacarita and Caballito, which doubled the installed capacity. 167  Brazil Electricity Generation Enel Américas participates in electricity generation through Enel Brasil and its subsidiaries Enel Green Power Cachoeira and Enel Generación Fortaleza. Enel Green Power Cachoeira Dourada These two power plants, one hydroelectric and the other Cachoeira is located in the State of Goias, 240 km south thermal, add up 9892 MW total capacity, representing of Goiânia. The power plant owns ten units with 665 MW 0.65% of the capacity of Brazilian SIN. of installed capacity. It’s a run-of-the-river power plant and In Brazil, electricity generation of the Group reached 3,665 GWh, reaching 0.7% of the total generation in the country Net generation in 2016 was 2,093 GWh, while sales ç8thermal and hydro), where hydroelectric production reached 6,399 GWh. uses the waters of River Paranaiba. represented 57% of the total generation of the Enel Américas Group in Brazil. Other generators connected to the Brazilian SIN are: CHESF, Furnas, Cemig, Electronorte, Cesp, Copel, Enel Generación Fortaleza Eletrobras and Eletropaulo. Fortaleza is located in Caucaia municipality, 50 km from the capital of Ceará state. Fortaleza is a 327 MW combined cycle thermal power plant that uses natural gas; and holds the capacity to generate one third of the electricity needs of Ceará, which has a population of about 9 million inhabitants. Fortaleza was built on a 70 thousand square meters area, and is part of the infrastructure of the Industrial and Port Complex of Pecém, in Caucaia municipality, and is part of the Thermoelectricity Priority Program (PPT) of the Federal Government. Fortaleza has a strategic location to boost regional growth and to facilitate the setup of other industries. Its main customers are Coelce and Petrobras. Electricity generation in 2016 was 1,572 GWh, while sales totalled 3,049 GWh. 168 Enel Américas Annual Report 2016 Land Reserved for Future Projects Enel Brasil has an area of 75 ha, in the city of Macaé, State of Rio de Janeiro, for a new thermoelectric project. Electricity Transmission In Brazil, Enel Américas Group also participates in the transmission and sale of electricity through the interconnection line between Argentina and Brazil, through the Enel Cien, holding 99.3% ownership. Enel Cien Enel Cien is an energy transmission company in Brazil. On April 5, 2011 the decrees were published in the The complex consists of two frequency conversion Official Gazette defining the annual value of the Allowed stations, Garabi I and II Garabi II, converting both ways the Annual Remuneration (RAP) for Enel Cien. With this, the frequencies of Brazil (60 Hertz) and Argentina (50 Hertz) regulator equates Enel Cien (the assets of which consist of and transmission lines. On the Argentine side, they are Garabi 1 and 2 lines) to concessionaires of public service managed by two subsidiaries: Compañía de Transmisión del transmission. Total annual RAP is adjusted annually and the Mercosur S.A. (CTM) and Transportadora de Energía S.A. tariff review processes will be conducted every four years. (TESA). CIEN has control of 100.0% of the capital in both Starting from April 2011, therefore, Enel Cien was officially companies. authorised to receive payments under this new business The interconnection system consists of two transmission lines with a total length of 1,000 km, and the Garabi Conversion Station. approach. 169 Electricity Distribution in Brazil Enel Américas participates in distribution through Enel Brasil and its subsidiaries Ampla and Coelce. Enel Américas owns directly and indirectly an economic ownership of 99.3% and 73.7% of these companies’ property, respectively. In Brazil, main distribution companies in the electricity system are: CPFL, Brasiliana de Energía, AES Elpa, Cemig, Light, Coelba y Copel. Ampla Coelce Ampla is an energy distribution company with operations Coelce is the electric distribution company in the State of in 73% of the territory of the State of Rio de Janeiro, Ceará, in northeastern Brazil, which covers a 148,921-km2- which is equivalent to a 32,188-km2 area. The population concession area. The company serves a population of over is approximately 8 million inhabitants, distributed in 66 9 million inhabitants. municipalities, among which the following are the most importan ones: Niteroi, São Gonçalo, Petrópolis, Campos Energy sales in 2016 were 11,628 GWh, showing a 3.7% y Cabo Frío. increase over 2015. Of these sales, residential customers represented 36%, commercial customers 18%, followed During 2016, Ampla provided electricity to 3,053,695 by tolls and other customers with 46%. clients, 1.9% more than in 2015. Of the total, 91% are residential clients, 6% are commercial, and 3% other The number of customers at the end of 2016 increased users. to 3,757,651, a 3.7% variation compared to 2014. The classification by type of customers shows that 74% are Energy sales in 2016 totalled 11,181 GWh, a 0.8% increase residential, 6% are commercial customers, while other compared to 2015, with a significant participation of customers represent 20%. residential customers representing 42% of physical sales, followed by 19% commercial customers, industrial clients represented 6% and other clients and tolls represented 34% of sales. Ampla greatly emphasises energy theft fight with a 4.0% reduction (from 23.64% to 19.41%). The sustainable reduction is only possible due to the set of positive results obtained with the projects developed by Ampla (use of technology and social performance). However, at present energy losses is still one of main challenges for Ampla. The year 2016 ended with 19.4% of energy losses. 170 Enel Américas Annual Report 2016 Activities and Projects in Distribution Energy Efficiency Acquisition of CELG Enel Américas through its subsidiary Enel Brasil acquired the 94.8% of Celg Distribuição S.A. («CELG») share capital, distribution company that operates in the Brazilian State of Goiás, for a total amount of 2,187 million reais (approximately Energy efficiency projects comprise actions to promote the 640 million US dollars). conscious energy consumption and the changes of equipments (refrigerators, freezers, lamps) and the electrical wiring, with an Enel Brasil was awarded for the public bidding for the important impact on energy consumption and home energy privatization of CELG, which was carried out by the Brazilian efficiency improvement. In 2016, 13,997 people in Ampla and government in November 2016 through Banco Nacional de Coelce benefited from the change of equipments iniciatives. Desarrollo, BNDES. In addition, 108,373 consumers were benefited from the educational projects for conscious consumption (41,075 in The acquisition of CELG was totally financed by funds obtained conferences and workshops, 30,997 by Community Agents from the capital increase of Enel Américas, approved by the and 36,301 by the Coelce in the Neighborhoods program). The end of 2012. projects are supported by touring trucks (Ampla on Wheels - Ampla Sobre Ruedas and Ship Coelce - Nave Coelce), and With this acquisition, Enel Brasil increases its clients’ base equipped with an explanatory model of energy generation, from 7 to 10 million. transmission and distribution processes, simulators of consumption and interative totems with fun units for all ages. The aspect of displacement of the project guarantees the access to information for residents and students in zones far from metropolitan areas. The energy efficiency program of Enel Brasil in 2016 centered its initiatives in the regions with greater impact in commercial losses (electricity theft), thus promoting responsible energy consumption initiatives in the population, especially among low-income consumers. During the year, there was a 5.3% reduction of investments for the program, due to the scenario faced by the Brazilian energy sector. The resources invested by distribution companies are regulated and are equivalent to 0.5% of the companies’ net operational revenues. Smart City Búzios The year 2016 was the final stage of the Smart City Buzios Program with the implementation, investigation and technical reports of every technology applied. Investments of nearly R$ 54.5 million were made. Main developments were related to the monitoring of the smart measurement and automation, increasing the use of electric vehicles, huge impact of the execution of Solar Challenge - Desafío Solar (important ship competition event powered by solar energy), and management of technologies for the distributed generation. 171  Colombia Electricity Generation Enel Américas participates in electricity generation through its subsidiary Emgesa, where it controls, directly and indirectly, 48.5% of its property (economic participation). Favorable Hydrologic Context for Emgesa in 2016 This company has an installed capacity that representd in 2016, 21% of the total installed capacity of the country, The offer of electric energy in Colombia in 2016, presented after including that year the hydroelectric power plant El relatively dry conditions; during the first semester of 2016 Quimbo. the contribution at national level (SIN) were lower than historical average, due to the high intensity of El Niño Electricity generation of Enel Américas in Colombia phenomena effect that began in February 2015 and ended reached 23% of the total generation of the country in in May 2016. The impact of the hydrological contribution 2016. For its part, physical energy sales represented 31% was clear during the period September 2015 through of total sales (spot + contracts). August 2016 with sustained records below historical Other generators connected to the Colombian electricity average. system are: Empresa Pública de Medellín, Isagen, Gecelca, From August 2016 through December 2016 conditions Celsia and Chivor. Emgesa associated with La Niña phenomena were registered, thus with weak intensity which in general means rains above average in the national territory. Hydrological contributions of Bogotá and Betania river On September 1st, 2007 the merger of Colombian basins maintained low levels. The contribution El Quimbo companies Emgesa S.A. E.S.P. and Central Hidroeléctrica basin was normal. On the contrary, and for the second de Betania S.A. E.S.P. was carried out, leaving the latter consecutive year, the contributions of the triburary basin as the absorbing company, which changed its name to to Guavio were above average. As such, the average Emgesa S.A. E.S.P. Energy Exchange price was 300 $/kWh, which despite the 21% decrease from 2015, was mainly impacted by higher Emgesa is the largest electricity generation company in prices in the first quarter due to the low contribution of the Colombia, located near the city of Bogotá. The company country. comprised by 14 power plants with total 3,509 MW of installed capacity, among which is El Guavio, 1,263 MW In this context, in 2016 the variable margin of Emgesa was is the largest hydroelectric power plant in the country. Out COP $2,191 billion, higher 14.2% than 2015. This result of the 14 existing plants, 12 power plants are hydroelectric was benefited from the annual generation of 14,952 GWh, and two are thermal. increasing 9.1% compared to the previous year. Net generation was 14,952 GWh, while total sales through Worth is to highlight that despite the hydrological conditions the energy exchange reached 18,015 GWh. of the System, hydrology of El Guavio was 110% in relation to the historical average. 172 Enel Américas Annual Report 2016 Effective Maintenance Management of Generation Power Plants and Production Management Milestones in 2016 Gas Commercialization In 2016 total sales reached 85,6 Mm3, which represented a 55.6% increase compared to 2015 (55.2 Mm3), with which the company continued to consolidate in the Gas Commercialization market in Colombia, and obtained a variable margin of 1,515 In 2016 net energy generation increased 9% with thousand $COL, supplying 9 industrial clients (Non respect to 2015. This mainly is a result of the Regulated) in Bogotá, Manizales and Cartagena, commissioning of El Quimbo Hidroelectric Power and 12 clients in wellhead (Secondary Market) and Plant in November 2015, which generated 1,448 signed new sell contracts with final clients for 2017 GWh in 2016. Moreover, the Company performed and 2018. an effective technical management of generation power plants, which enabled the increase of the The market with the greater growth in relation to effective installed capacity of El Guavio Hidroelectric 2015 were the wellhead clients with 108%, followed Power Plant in 50 MW, and the commissioning by the 6% growth of the non-regulated market and of Guavio Minor Power Plant with 9.9 MW. a decrease of 3.4% of the spot market. Worth is mentioning that the adequate planning and execution of the preventive and corrective maintenances guaranteed that the availability index of the generation matrix in 2016 showed a +0.1% increase compared to 2015, reaching 91.3%. During 2015 and the first half of 2016 the National Colombian Interconnected System–SIN– suffered the consquences of the weather phenomenon El Niño, shown in the poor hydrology of the dams and an increase of the thermal generation requierement to guarantee the demand satisfaction. The company efficiently met the requirements of its power plants. 173 50 MW increase of net installed capacity of El Guavio Hydroelectric Power Plant El Quimbo El Quimbo is located south of Huila department, southeast of Bogotá, and feeds from the flow of the Magdalena and Suaza Rivers. The project is a run-of-the-river plant with 400 MW installed capacity, with an estimate average El Guavio power plant started commercial operations in generation of 2,216 GWh/year.. 1993 with its five units. Originally the units were declared to the STN with installed capacity of 200 MW and 100 In the context of the emergency that the country is MVAR. Later, in 1995 the decision to increase installed facing due to El Niño phenomenon, on October 6, 2015 capacity was made to 230 MW and 100 MVAR, and in the Ministry of Mining and Energy enacted the Decree in 2006 one more time capacity grew to 240 and 100 MVAR. Force of Law N°1,979 of 2015, which authorizes Emgesa to Based on the units technical properties, its charge 11, 2015 the first sincronization of Unit 1 to the system of chargeability curve, and the efficiency curve of the turbines national transmission of Colombia was performed. and the operational values of temperatures, currents, vibrations, etc, below the design parameters, the company The main developments of the project carried out in 2016, start generating energy from October 7, 2015. On October decided to evaluate the possibility of increase generation were the following: capacity of these units until such value won’t impact the remaining useful life, and won’t affect the temperature > In June 2016, guaranteed maintenance for the first 3,000 parameters and stability of the use of each machine. hours of service of Units 1 y 2. > Works to recover oxygene levels in the turbined water As part of the work plan, there were tasks driven to moved forward, and guaranteed maintenance for 4,000 determine the current condition of the units, in this sense, hours of the two units, among other works. As such, the tests results performed in generators, transformers, important civil works at the dam were carried out. turbine and ancilliaries services, revealed normal values > Guaranteed maintenance in the turbine and generator and trends for operation times, and the equipments didn’t for the two units and ancilliary services moved forward. show any accelated deterioration or any kind of loss of its properties. Later, tests were made to the 250 MW and 100MVAR in each generator, in this operational condition units never exceeded the nominal power of 270 MVA, with temperatures below the design level and within the chargeability curve defined by the producer, same as the power and capacity of the transfomers bank, as well as the behavior of the CT´s of measure and protection, were among normal parameters. When completed the 10 MW increase in every unit, it didn’t modify the loss of the remaining useful life as an effect of the temperature of the windings of generators not transformers. In this sense, it was decided to inform the capacity increase of the Power Plant to the National regulatory entities to 1,250MW. 174 Enel Américas Annual Report 2016 Project under development: improvements in Termozipa Thermal Power Plant Land Reserved for Future Projects In Colombia currently there aren’t any reserved lands for future projects. Codensa Since October 1, 2016, Codensa absorbed the distribution companies DECSA and Empresa de Energía de Termozipa is a thermal power plant owned by Emgesa Cundinamarca, whose assets and equity merged in a located 40 km from Bogotá. This power plant has four units unique company that serves Bogotá and Cundinamarca and its total installed capacity amounts to 221 MW. The markets, as well as the thirteen districts of the coal supply comes from coal mines located in the nearby neighbouring Departments of Meta, Tolima and Boyacá. area The merged company becomes one of the strongest and most important companies of the electricity sector of The improvements project comprises, among others, the country, becoming the leading electricity distribution operations in boilers, turbines, generators and water company in Colombia, while integrating the best of outlets. These improvements will allow the increase of each company in one single operation and in one single the useful life in additional 15 years or 100,000 hours of market, and leveraging the efficiency of the technical and operations. commercial operations of the Company. As such, at the end of 2016, the Company served In addition, the specific heat rates will improve (it’s a 3,248,447 clients, and worth is to mention that through measure of the energy power plant efficiency) and will the implementation of plans focused on the decrease reduce the unavailability of energy. ofelectricity theft (focused on five aspects: strategy and planning, control and follow-up, monitoring and These improvements seeks to achieve high environmental sustainability, normalization of peripheral zones and standards with regards to gas emissions of thermal technical losses), the Company achieved an energy losses coal power plants in Latin America, mainly focused on: index of 7.06% at year end 2016, compared to 7.14% of the Nitrogen Oxide (NOx) emissions below 330 mg/Nm3; previous year, meaning an important decrease of energy Sulfur Dioxide (SO2) below 400 mg/Nm3 and particulate losses in 2016 (1,045GWh) compared to 2015 (1,086GWh). matter emissions below 35 mg/Nm3. Electrical energy demand in the area that Codensa serves Operations began by the end of 2016 and are expected to energy sector crisis in the country triggered by the impact end in 2017. Meanwhile, the objective of the environmental of El Niño phenomenon (between April and August), the improvements is to reach the new emissions regime in latter in addition to the damages that suffered Guatapé every generation unit to be completed on 2020. and Termoflores thermal power plants, whith which the showed a TAM decrease of 2.4%, as a consequence of the National Government set in motion a voluntary energy savings plan in homes and companies, equivalent to 5% of the energy consumption of the country. During 2016, energy sales reached 13,632 GWh, which represented 2.3% decrese of the energy supplied compared to the same period the previous year. Tolls and energy transport amounted to 5,127 GWh, representing a 6.6% decrease in relation to December 2015. 175 Activities and Distribution Projects Smart Metering Quality of Service In 2016 Codensa completed the installation of more than During 2016 we achieved important improvements in 40,000 smart meters in the context of phase 1 of the Quality of Service, whose result was reflected in the 19% Smart Metering Codensa project for Colombia. fall in the average frequency of service interruption (8.83 times the SAIFI -System Average Interruption Frequency Index-). Additionally, the duration of these interruptions also decreased 18% (687.63 Min of SAIDI -System Average Interruption Duration Index-). Smart City Bogotá During 2016, Codensa launched the Smart City project in the urban area of Bogotá, which will remain until 2019 and comprises the integration of technologies in this area that includes 5,000 smart meters, 1,000 Smart Info kit, 100 LED lights remotely managed and Smart Eye modules, 8 automated circuits, 10 electric charging stations, 20 electric vehicles, 2 buildings equipped with electricity management systems, and a control center that manages the consumption and network status, in order to provide more and better information to ease the decision-making process of the user in relation to consumtion. 176 Enel Américas Annual Report 2016  Peru Electricity Generation Enel Américas S.A. holds directly 29% of the share capital of Enel Generación Perú and through Generandes Perú S.A. holds 54.20% of Enel Generación Perú shares. Enel Generación Piura is controlled by Eléctrica Cabo Blanco S.A.C. (henceforth Elecsac). Elecsac is indirectly controlled by Enel S.p.A. through its subsidiaries Enel Américas S.A. and Generalima S.A.C. In Peru, the others generators connected to the electricity system are: Electroperú, Enersur and Kallpa Generación. Enel Generación Perú S.A.A. The effective capacity of Enel Generación Perú, including Likewise, Enel Generación Perú owns two thermal power its subsidiary company Chinango, reached 1,683 MW, plants, Santa Rosa and Ventanilla, whose installed capacity 46.7% of which is hydro generation and 53.3% is thermal is 418 MW and 479 MW, respectively. The first one, located generation. The Company owns seven hydroelectric in the Cercado de Lima, is comprised by units UTI with 106 facilities, five of which are located in Lima and two in Junín. MW, TG7 of 125 MW and TG8 of 187 MW. The second The hydroelectric power plants in Lima are located in the generation units: two gas turbines and one steam turbine Rímac River basin. Huinco Power Plant is located in Santa that constitute a combined cycle. Ventanilla Thermal Power Eulalia River basin, a tributary of Rímac River. Its installed Plant was the first combined cycle installed in the SEIN capacity amounts to 268 MW and Matucana Powe Plant and currently is one of the four combined cycles of the power plant is located in the Callao province, and has three is located in Rímac River basin, whose installed capacity system. is 137 MW. These rivers are diverted through tunnels and channels to the town of Barba Blanca, where Callahuanca Power Plant is located, whose installed capacity is 84 MW. Downstream are placed the power plants Moyopampa, with 69 MW, and Huampaní, with 31 MW. The total capacity of these five power plants is 589 MW. Enel Generación Perú owns 21 lagoons that hold with total capacity of 282.35 hm3, which allows the regulation of the flow for energy generation and for the water supply to the city of Lima. The two hydroelectric power plant Yanango, with 43 MW, that uses the flows of Tarma River; and Chimay, with 155 MW, that uses the flows of Tulumayo River in the department of Junín. Their total installed capacity amounts to 198 MW. These two power plants became part of the subsidiary Chinango, as a consequence or a simple corporate reorganization process. 177 Enel Generación Piura S.A. Enel Generación Piura owns two generation power plants, located in the province of Talara, departament of Piura, in the north of Peru. These are the following: > Malacas Power Plant: comprises one TG1 Mitsubishi unit > Malacas 2 Power Plant, comprises ABB open cycle unit, with 11,70 MW of effective installed capacity, and was it’s equipped to operate with or without water injection, removed from commercial operation on August 23, 2014, with natural gas. which is being replaced by a new TG6 unit with 51 MW of installed capacity, project under construction in 2016 and > Malacas 3 Power Plant, comprises SIEMENS open it’s estimated to start commercial operations in early 2017. cycle unit in cold generation reserve condition, and uses Power Plant Malacas 2 Malacas 3 Unit TGN4 TG-5 RF Total diesel B5 fuel. Production Centers Manufacturer ABB SIEMENS Declared Fuel Gas natural Diesel B5 Effective Capacity (MW) 104.37 * 190.35** 294.72 * Valid from July 1, 2015. ** Effective Capacity Contracted, measured in the SE Talara 220 kV, valid from May 18, 2016. Source: Commercial – Enel Generación Piura During 2016, the electricity generation of Enel Generación Piura reached 679.58 GWh. (Malacas 2 Power Plant contributed with 651.68 GWh and Malacas 3 Power Plant generated 27.89 GWh), 16.31% higher in relation to the generation of the previous year, and was mainly due to: > Higher dispatch requirement of the TGN4 Unit using > Operation of TG-5 RF unit using diesel at the beginning natural gas due to the operation priority of the thermal of the year due to gas restriction from Camisea due to units to Coes; in this respect, the declaration of a lower the breakage of the liquid pipelines of TGP (from January natural gas price for this unit allowed that the variable 20 through February 2). cost became more competitive than other thermal units of the SEIN that generated with natural gas from Camisea. Source: Commercial – Enel Generación Piura S.A. 178 Enel Américas Annual Report 2016 With regards to the operation of Malacas thermal Power Plant units, had two different periods of generation differentiated by the hydrology seasons: dry season and flood: > In the first period, between January and May, and due > In the second period, between June and December, to the failures of the Camisea natural gas Camisea, generation increased due to a lower hydrology in the export of energy to Ecuador, and also the relieve hydric hydroelectric power plants of the SEIN. production deficits while solid materials were detected in the basins waters. On the other hand Malacas Thermal Power Plant had a total availability of 97.13%. Minor maintenances were carried out in the TGN-4 unit. In the period, the generation unit TGN4 recorded a load factor of 70.64% and its net annual average efficiency was 31.82%. Likewise, the average capacity of Malacas Thermal Power Plant was 81 MW and accounted an annual peak demand of 294 MW (at 21:30 hours of November 19, 2016). The daily peak production has been 5,921 MWh, on January 21, 2016. On April 13, the Effective Capacity and Performance (PR-17) tests of TG5 RF unit of Malacas Thermal Power Plant were perfomed by the company CENERGIA with the attendance of Coes as observer. On May 18, 2016, the Coes approved the effective capacity test report and the performance of this unit; concurrently to the effective installed capacity test and pursuant to the Contract subscribed wuth the State, the value of the Effective Contracted Capacity was determined in 190 MW. 179 Activity and Projects in Generation Electricity Distribution in Peru Project under construction: expansion of Huampani Hydroelectric Power Plant Huampani is a hydroelectric power plant located in Lurigancho Chosica, Lima district, Peru. Enel Américas S.A. owns directly 24% of the share capital of Enel Distribución Perú. In Peru, other distribution companies that participate in the electricity system are: Luz del Sur, Electro Sur, Electrocentro, Hidrandina and ENSA. Enel Distribución Perú S.A.A. The Hydroenergy Recuperation Project (“HER”) consists Enel Distribución Perú is the concessionary company for on the expansion of the installed capacity of this power electric utility that covers the north area of Metropolotan plant (currently 31 MW) through the implementation of Lima, in the Callao province and in Huaura, Huaral, Barranca two new turbines of 0.35 MW each, with their respective and Oyón provices. The concession area covers a total of generators and ancilliary equipments, inside the existing 1,517 km2. download of Huampani Power Plant, that will be connected to the Huampani substation through a 10kV line of 140 Edelnor is the sole distribution company in 52 districts and meters long. shares five additional districts with the southern distributor. The company distributes energy to 1,367,044 clients, and The Environmental Authorization for the project was benefits more than half of the inhabitants of Metropolitan granted in August 2016 and the Pre-operational Study Lima. At the end of 2016, the total accrued energy losses (“EPO”) was approved by the COES (Economic Operation index was 7.8% Committee of the National Interconnected System) in September of the same year. As of December 31, 2016, Enel Distribución Perú had 1,367,044 clients, which represented a 2.28% growth in In September 2016, Enel Generación Perú was awarded relation to 2015. Energy physical sales and tolls for 2016 with the Water to Wire Contract, which consists on a mode reached 7,601 GWh, 0.6% lower than the previous year. In of comprehensive generation contract, which simplifies monetary terms, sales reached 3,003 million Soles, which the planning and development of the project, because the represented a 16.54% increase compared to the previous contractor takes care of most of the equipment supply to year. a consortium. The contract between Enel Generación Perú and the consortium came into effect in November 2016. At present, the consortium is developing the detailed engineering for the civil works and the electromecanic design, which is expected end in April 2017. The construction is planned to start in June 2017, in order to reach its full generation capacity by the end of the year. 180 Enel Américas Annual Report 2016 Activities and Projects in Distribution In 2016, Enel Distribución Perú made investments for a total of 415.6 million soles. Main investments were: > Capacity expansion of the transformation substations (SET), and transmision lines including works for the new SET Malvinas, Filadelfia and Comas (116.4 million soles). > Expansion and reinforcement of medium and low voltage (54.5 million soles). > Capacity expansion of medium and low tension feeders (16.8 million soles). > Atention/electrification of new projects for the expansion of the grid in human settlements (25.8 million soles). > Provision of greater safety in the facilities (37.6 million soles). > Improvements in the public lighting facilities (6.1 million soles). > Investments for the commercial losses reduction (18.6 million soles). 181  Ownership Structure 183 184 Enel Américas Annual Report 2016  Direct and Indirect Economic Participations Argentina Enel Generación Costanera S.A. Enel Generación El Chocón S.A Central Dock Sud, S.A. Empresa Distribuidora Sur S.A. Compañía de Transmisión del Mercosur S.A. Transportadora de Energía S.A. Enel Trading Argentina S.R.L. Yacylec Termoeléctrica José de San Martin Termoeléctrica Manuel Belgrano Central de Vuelta Obligado S.A. Brasil Enel Brasil S.A. Central Generadora Termoeléctrica Fortaleza S.A. EGP Cachoeira Dourada S.A. Ampla Energía E Serviços S.A. Compañía Energética Do Ceará S.A. Enel Cien S.A. Enel Green Power Modelo 1 Eólica S.A. Enel Green Power Modelo 2 Eólica S.A. Colombia Emgesa S.A. E.S.P. Compañía Distribuidora y Comercializadora de Energía S.A. Company merged on 12/31/2016 with Codensa Peru Enel Generación Perú Enel Distribución Perú S.A Compañía Energética Veracruz Enel Generación Piura Chinango S.A.C Gx: Generation Dx: Distribution Tx: Transmission / Commercialization Ox: Gas Pipelines, others Business Gx Gx Gx Dx Tx Tx Tx Tx Gx Gx Gx Negocio Gx, Dx, Tx Gx Gx Dx Dx Tx Gx Gx Business Gx Dx Dx Business Gx Dx Gx Gx Gx Ownership 75.59% 65.32% 40.25% 72.07% 99.34% 99.34% 99.95% 22.22% 16.91% 16.91% 25.25% Propiedad 99.34% 99.34% 99.10% 99.33% 73.67% 99.34% 0.97% 0.97% Ownership 48.48% 48.41% -.- Ownership 83.60% 75.68% 100% 96.50% 66.88% 185  Perimeter of Enel Américas’ Corporate Shareholdings 48.481619% 4.90 % 48.40578 % 100 % 24.00 % 100 % EMGESA S.A. 94.95 % SOCIEDAD PORTUARIA CENTRAL CARTAGENA S.A. INVERSORA CODENSA S.A.S. 100 % CODENSA S.A. GASATACAMA CHILE S.A. INVERSIONES DISTRILIMA S.A. 51.684 % ENEL DISTRIBUCION PERU S.A. GENERALIMA S.A. EMGESA PANAMA S.A. 100 % 22.22 % YACILEC S.A. 0.2509 % CENTRAL DOCK SUD S.A. 69.9925 % INVERSORA DOCK SUD S.A. 57.1417 % Chile Argentina Brazil Peru Colombia ENEL GENERACIÓN COSTANERA S.A. 75.6813 % ENEL ARGENTINA S.A. 99.8847 % 100 % GENERANDES PERÚ S.A. 20 % EMPRESA ELÉCTRICA CABOBLANCO S.A. 80 % 0.1153 % 1.42 % Termoeléctrica Manuel Belgrano S.A. 1.42 % Termoeléctrica José de San Martín S.A. 6.40 % Central Vuelta de Obligado S.A. 5.326 % 5.326 % 18.85 % 18.85 % 1.3 % 33.2 % 45 % ENEL TRADING ARGENTINA S.R.L . 55 % 29.3974 % 80 % 54.19961 % ENEL GENERACIÓN PERÚ S.A. DISTRILEC INVERSORA S.A. 51.50 % 3.996592 % CHINANGO S.A.C. ENEL GENERACIÓN EL CHOCÓN S.A. 8.6741 % 56.3577 % EDESUR S.A. 59.00 % 43.0971 % 50 % 15.1836062 % 41.9411 % HIDROINVEST S.A. SACME S.A. 1.00 % 54.1535 % 60 % ENEL GENERACIÓN PIURA S.A. 100 % 36.50 % CHILECTRA INVERSUD S.A. 100 % COMPAÑÍA ENERGÉTICA VERACRUZ S.A.C. 21.022414 % 90.062098 % ENEL BRASIL S.A. 5.941306% COELCE S.A. 58.867455 % 46.886283 % 31.7283 % AMPLA ENERGIA S.A. INGENDESA DO BRASIL LTDA. EGP CACHOEIRA DOURADA S.A. 99.754055 % 100 % C.G.T. FORTALEZA S.A. 0.0001 % TESA S.A. 99.999 % ENEL CIEN S.A. 100 % 99.9999 % SOLUCIONES ENEL S.A. 0.001 % 99.999993 % CTM S.A. 99.95 % EÓLICA FAZENDA NOVA-GERACAO E COMERCIALIZACAO DE ENERGIA S.A. 0.975 % EGP 0.975 % EGP MODELO I EÓLICA MODELO II EÓLICA 186 Enel Américas Annual Report 2016 48.481619% 4.90 % 48.40578 % 100 % 24.00 % 100 % EMGESA S.A. 94.95 % SOCIEDAD PORTUARIA CENTRAL CARTAGENA S.A. INVERSORA CODENSA S.A.S. 100 % CODENSA S.A. GASATACAMA CHILE S.A. INVERSIONES DISTRILIMA S.A. 51.684 % ENEL DISTRIBUCION PERU S.A. GENERALIMA S.A. ENEL GENERACIÓN COSTANERA S.A. 75.6813 % ENEL ARGENTINA S.A. 99.8847 % 100 % GENERANDES PERÚ S.A. 20 % EMPRESA ELÉCTRICA CABOBLANCO S.A. 80 % 0.1153 % 45 % ENEL TRADING ARGENTINA S.R.L . 55 % 29.3974 % 80 % 54.19961 % ENEL GENERACIÓN PERÚ S.A. DISTRILEC INVERSORA S.A. 51.50 % 3.996592 % CHINANGO S.A.C. 90.062098 % ENEL BRASIL S.A. 5.941306% 60 % ENEL GENERACIÓN PIURA S.A. 100 % 36.50 % CHILECTRA INVERSUD S.A. 100 % COMPAÑÍA ENERGÉTICA VERACRUZ S.A.C. 21.022414 % 59.00 % 43.0971 % 50 % 15.1836062 % 41.9411 % HIDROINVEST S.A. SACME S.A. 1.00 % 54.1535 % INGENDESA DO BRASIL LTDA. COELCE S.A. 58.867455 % 46.886283 % AMPLA ENERGIA S.A. 31.7283 % EGP CACHOEIRA DOURADA S.A. 99.754055 % 100 % C.G.T. FORTALEZA S.A. 0.0001 % TESA S.A. 99.999 % ENEL CIEN S.A. 100 % 99.9999 % ENEL SOLUCIONES S.A. 0.001 % 99.999993 % CTM S.A. EÓLICA FAZENDA NOVA-GERACAO E COMERCIALIZACAO DE ENERGIA S.A. EGP MODELO I EÓLICA EGP MODELO II EÓLICA 99.95 % 0.975 % 0.975 % 187 1.42 % Termoeléctrica Manuel Belgrano S.A. 1.42 % Termoeléctrica José de San Martín S.A. 6.40 % Central Vuelta de Obligado S.A. 5.326 % 5.326 % 18.85 % 18.85 % 1.3 % 33.2 % ENEL GENERACIÓN EL CHOCÓN S.A. 8.6741 % 56.3577 % EDESUR S.A. EMGESA PANAMA S.A. 100 % 22.22 % YACILEC S.A. 0.2509 % CENTRAL DOCK SUD S.A. 69.9925 % INVERSORA DOCK SUD S.A. 57.1417 % Chile Argentina Brazil Peru Colombia GENERACIÓNEnel Generación CostaneraEdesurEnel Generación El ChocónCentral DocksudEGP Cachoeira DouradaEnel Cien*EmgesaEnel Generación PerúEnel Generación PiuraDISTRIBUCIÓNFortalezaAmplaCoelceCodensaEnel Distribución Perú Significant Events of the Company 189 190 Enel Américas Annual Report 2016  2016 Since December 1st, 2016 and as a consequence of The Merger, the name of the Company changed from Enersis Américas to Enel Américas, the web sites of the former Enersis Américas, Endesa Américas and Chilectra Américas were grouped into www.enelamericas.com Significant Events In accordance with articles 9 and 10, paragraph 2, under Superintendence of Securities and Insurance Securities Market Law N°18,045, and as established under proceeded to record Enersis Chile S.A. and its shares General Norm No. 30 of the Superintendence, the following in the Securities Registry, according to a certificate significants events were informed: issued by this entity, and that it has made the respective listings in the Santiago Stock Exchange, > On January 29, 2016, the following significant event was the Valparaíso Stock Exchange, the Chile Electronic informed: Stock Exchange and the New York Stock Exchange of United States of America, all in accordance with the Pursuant to the Company’s Extraordinary Shareholders’ decision made at the Extraordinary Shareholders’ Meeting held on December 18, 2015 that approved the Meeting of Enersis Américas S.A. (previously Spin-Off of Enersis, shall become effective on Monday, Enersis S.A.) held on December 18, 2015. Therefore, February 1, 2016, a date as of which the new company the shares of the divided equity of Enersis Chile Enersis Chile S.A. (“Enersis Chile”) began to exist and should be distributed free of any payment to the the reduction of capital and other statutory reforms shareholders of Enersis Américas S.A. entitled to of the current Company shall be verified, and the receive them. continuing company will change its name to “Enersis Américas S.A.” The Board of Directors of Enersis has 2.- Inform that the Board of Directors of Enersis Chile been informed that the condition precedent the Spin- S.A. agreed to carry out the distribution and delivery Off of the Company was subject to has been met and, of a total of 49,092,772,762 shares issued by Enersis consequently, it issued the public deed entitled “Public Chile, all nominative, of a unique and single series Deed of Compliance of the Condition of the Spin-Off of and without nominal value, on April 21, 2016, to the Enersis” which established that the condition precedent has been met on January 29, 2016.  shareholders of Enersis Américas S.A. that were listed in its shareholders’ registry at the midnight of the day before April 21, 2016. > On February 26, 2016, the following significant event was informed: 3.- This distribution to the shareholders of Enersis Américas S.A. will be carried out by delivering one In the ordinary session No. 02/ 2016 of Enersis Américas share of Enersis Chile for each share of Enersis S.A., formerly Enersis S.A., unanimously agreed to Américas S.A. that will be registered under its name unilaterally terminate the Strategic Alliance Agreement, in the registry at the midnight of the day before April a contract that was executed with Endesa España on 21, 2016. From April 21, 2016 onwards, the shares March 18, 1998. This termination is in accordance with issued by Enersis Chile may be officially quoted in the terms of the contract and will become effective on March 31, 2016.  the stock markets aforementioned.  4.- Representative titles of the shares in Enersis Chile > On April 14, 2016, the following significant event was S.A will be available for shareholders of Enersis informed: Américas S.A. to be withdrawn on April 21, 2016 at the Equity Department of Enersis Américas S.A. at 1.- To announce that, on April 13, 2016, the DCV Registros S.A. offices, located in Huérfanos 770, 191 22nd floor, Santiago, Monday to Thursday from 9:00 > In accordance with articles 9 and 10, paragraph 2, under am to 5:00 pm, and Friday from 9:00 am to 4:00 pm. Securities Market Law N°18,045 and as established under General Norm N°30 of the Superintendence, duly authorized > At the Ordinary Shareholders Meeting of Enersis on behalf of Enersis Américas S.A. (“Enersis Américas” or Américas held on April 28, 2016, has agreed to distribute the “Company”), I hereby inform you of the following: an minimum obligatory dividend (that is reduced by the interim dividend pro-forma paid in January 2016) and a 1.- Unanimously, the Board of Directors has agreed to additional dividend of Ch$ 204,874,253,630, equivalent formally begin the Merger process in which Enersis to Ch$ 4.17321 per share. Américas would absorb Endesa Américas S.A. (“Endesa Américas”) and Chilectra Américas S.A. Since Interim dividend has already been paid, the (“Chilectra Américas”) by incorporation, which would remaining Ch$ 167,209,724,296, equivalent to then dissolve without liquidation, replacing them in Ch$3.40599 per share dividend will be distributed and all their rights and obligations (the “Merger”); in line paid in Definitive Dividend N°93.   In addition, the Board of Directors’ Meeting appointed the following members for a three-year period: Mr. Francisco de Borja Acha Besga Mr. José Antonio Vargas Lleras Mr. Livio Gallo Mr. Enrico Viale Mr. Hernán Somerville Senn Mr. Patricio Gómez Sabaini Mr. Domingo Cruzat Amunátegui with the resolutions adopted at the Extraordinary Shareholders’ Meeting of Enersis Américas held on December 18, 2015, and according to the terms of the Merger presented in the aforementioned Meeting, particularly regarding to the following: (i) that the Merger is subject to compliance of the condition precedent in which the right to withdrawal that the shareholders of Enersis Américas, Endesa Américas and Chilectra Américas might potentially exercise because of the Merger, should not exceed 10%, 7.72% and 0.91%, respectively; This, to the extent that the right to withdrawal from Enersis Américas > At the Board of Directors’ Meeting of Enersis Américas should not lead to any shareholder exceeding the S.A. hled on April 29, 2016, Mr. Francisco de Borja Acha maximum limit of 65% of share concentration of Besga was appointed Chairman of the Board, Mr. José Enersis Américas after the merger is carried out; Antonio Vargas Lleras was appointed Vice Chairman of (ii) that, pursuant to the agreement adopted on the Board and Mr. Domingo Valdés Prieto as Secreatary November 24, 2015 by the Board of Directors of of the Board. Enersis Américas, it was agreed to propose to the Board to decide on the Merger a share ratio of Similarly, in the aforementioned meeting, the Directors’ 2.8 of Enersis Américas shares for each Endesa Committee, in accordance to the Chilean Companies Américas share and 5 Enersis Américas shares for Act Law N°18,046 and the Sarbanes - Oxley Act, was each of Chilectra Américas share; (iii) that, pursuant appointed. The Directors’ Committee is composed of to the agreement adopted on November 24, 2015, Directors Hernán Somerville Senn, Patricio Gómez complemented by another agreement adopted on Sabaini and Domingo Cruzat Amunátegui. As required by December 17, 2015, the Board of Directors of Enersis the provisions of Circular N°1956 of the Superintendence Américas also announced its intention to submit a of Securities and Insurance, I inform you that the three tender offer for the acquisition of shares (“OPA,” in aforementioned members are independent Directors. its Spanish acronym) related to all the shares and American Depositary Receipts (“ADRs”) issued by The Board of Directors of the Company has appointed Endesa Américas which are not owned by Enersis Mr. Hernán Somerville Senn as the Directors’ Commit- Américas for the price of 285 Chilean pesos and that tee’s Financial Expert, and the Directors’ Committee ap- the tender offer would be subject to the approval of pointed Mr. Hernán Somerville Senn as President of the the Merger by Extraordinary Shareholders’ Meetings Directors’ Committee and Mr. Domingo Valdés Prieto as of Enersis Américas, Endesa Américas and Chilectra Secretary of the Directors’ Committee.  Américas, and that after the legal period to exercise 192 Enel Américas Annual Report 2016 the right to withdrawal from Enersis Américas and of the Chilean Companies Act Law N°18,046 (“LSA,” Endesa Américas expires, the conditions being met in its Spanish acronym), stating their involvement that the right to withdrawal has not been exercised according to administrative interpretation carried out above a certain number or percentage of shares as by the Superintendence of Securities and Insurance relevant, and any other term and condition that will and as set forth in the Sentence of the Appeals Court be duly established at the time of presenting such of Santiago of March 22, 2016. an offer; (iv) that, by the agreement aforementioned on November 24, 2015, the Chief Executive 3.- By the unanimous agreement of the Board of Officer (“CEO”) has been instructed that, only and Directors, we hereby inform you that the CEO, Mr. exclusively under the assumption that the Merger Luca D’Agnese, as Chairman of the Board of Directors agreements are not adopted before December 31, and CEO of Enel Latinoamérica, S.A. and member 2017, the compensation commitment terms should of the Board of Directors of Enel Iberoamérica, be negotiated in good faith with Endesa Chile under S.L. has declared to have an interest in the Merger which the tax costs borne by Endesa Chile as a result under the terms of article 147 of the LSA, stating his of its division and those benefits or tax credits that involvement in the Merger. Therefore, the Board of Endesa Américas or Endesa Chile are to obtain as a Directors has resolved that the CFO should carry out result of this division be duly accredited and deducted all the instructions provided by the Board of Directors and offset by the tax benefits that Enersis Américas and refrain from carrying out negotiations that could might obtain; (v) that the controlling shareholder, lead to a conflict of interest for the Merger. Enel S.p.A. (“Enel”), through two letters dated November 25 and December 17, 2015 said, on the 4.- By the unanimous agreement of the Board of one hand, (a) that it considered the exchange ratio Directors, we appointed Mr. Rafael Malla Osorio announced for the Merger suitable to the interests as the Company’s independent expert appraiser so of all shareholders and to the companies involved that he may issue a report regarding the value of the in the reorganization, in such a way that it would merging companies and the corresponding share vote in the corresponding Extraordinary Meeting of exchange ratio, under the terms of and in compliance Shareholders in favor of the Merger if, before the with article 156 and 168 of the Corporations Act. aforementioned Meeting, the relevant supervening facts that substantially affect the referred to exchange 5.- By the majority of the Board of Directors, and with the relations have not been met prior to the shareholders dissenting vote of Mr. Domingo Cruzat Amunátegui, meeting and on the other hand (b) that if the Merger we have appointed Banco Itaú as financial advisor is approved, it is Enel’s intention, as the controlling of the Board of Directors of Enersis Américas with shareholder, not to carry out or propose any other regards to the Merger, so that it may issue a report corporate reorganization processes that would affect pursuant to article 147 of the Corporations Act. Enersis Américas for a period of no less than five Director Mr. Domingo Cruzat Amunátegui based his years as of the time the Extraordinary Shareholders’ dissent on the number of experts designated by the Meeting approves the Merger, other than the ones Board, considering that the financial advisors should dealt with at the aforementioned Extraordinary be more than one and that, consequently, he would Meeting of Shareholders. promote the appointment of another financial advisor by the Directors’ Committee of the Company. 2.- By unanimous agreement of the Board of Directors, we hereby inform you that directors Messrs. > On May 16, 2016, the following significant event was Francisco de Borja Acha Besga, Jose Antonio Vargas informed: Lleras, Livio Gallo, Enrico Viale, Hernán Somerville Senn and Patricio Gómez Sabaini, upon having In accordance with articles 9 and 10, paragraph 2, un- been elected in a decisive vote of the controlling der Securities Market Law N°18,045 and as established shareholder of the company, have declared an under General Norm N°30 of the Superintendence, duly interest in the Merger under the terms of Article 147 authorized on behalf of Enersis Américas  S.A. (“Ener- 193 sis Américas” or the “Company”), it’s been informed the Superintendence, duly authorized on behalf of Enersis informed the significant event that the Directors’ Com- Américas S.A. (“Enersis Américas” or the “Company”), I mittee of Enersis Américas, at an extraordinary meeting hereby inform you of the following significant event: held today, has appointed Credicorp Capital Asesorías Financieras S.A. (“Credicorp Capital”) as the Indepen- In accordance with articles 9 and 10, paragraph 2, under dent valuator for the merger process, in which Enersis Securities Market Law N°18,045 and as established Américas would acquire Endesa Américas S.A. and Chi- under General Norm N°30 of the Superintendence, the lectra Américas S.A., where the latter companies would Company informed of the following Significant Event in be dissolved without liquidation, and whose start was relation to the extraordinary board of Directors’ meeting communicated through a Significant Event of the Com- held on August 5, 2016, the Board of Directors of Enersis pany on May 7, 2016. The Directors’ Committee agreed Américas S.A. (“Enersis Américas”) unanimously the hiring of Credicorp Capital,  so that it may issue a agreed to call an Extraordinary Shareholders’ Meeting to report pursuant to article 147 of the Chilean Companies be held on September 28, 2016. Act Law N°18,046. > On June 16, 2016, the following significant event was Extraordinary Shareholders’ Meeting are as follows: The matters to be discussed and voted on at the informed: I. Related-party transactions (OPR). Pursuant to the In accordance with articles 9 and 10, paragraph 2, under terms of Title XVI of the Chilean Companies Act, Law Securities Market Law N°18,045 and as established under No. 18,046 (“LSA”,), to approve the OPR (“OPR”) General Norm N°30 of the Superintendence, duly authorized which consists of the proposed statutory merger on behalf of Enersis Américas S.A. (“Enersis Américas” of Endesa Américas S.A. (“Endesa Américas”) and or the “Company”), I hereby inform you of the following Chilectra Américas S.A. (“Chilectra Américas”), information regarding the merger process described to the into Enersis Américas (the “Merger”), referred to Superintendence of Securities and Insurance via Significant in item II below, taking into account the following Event dated May 6, 2016. Considering that the independent background data that serves as its foundation, expert, Mr. Rafael Malla Osorio, appointed in the previously and which are available to the shareholders at the indicated date, has stated that he will not be able to comply Company’s corporate address and on its website in time and form with the task commissioned to him in www.enersis.cl: line with the United States legislation requirements on the subject matter as a consequence of the Company’s (i) Report issued by Banco Itaú, the independent registered ADR Program at the NYSE, the Company’s Board appraiser appointed by the Board of Directors, of Directors agreed unanimously to revoke the independent dated August 5, 2016; expert appointment conferred upon Mr. Rafael Malla Osorio and to appoint Mr. Pablo D’Agliano instead, subject to his (ii) Report issued by Credicorp (IM Trust), the execution of the respective contract. Upon execution of independent appraiser appointed by the a contract between the Company and Mr. D’Agliano, the Directors’ Committee, dated August 5, 2016; new independent expert appointed unanimously by the Company’s Board of Directors, he must issue a report (iii) Fairness opinion dated August 5, 2016 by Bank regarding the value of the merging companies and their of America Merrill Lynch, the financial advisor of respective exchange ratios, according to the terms and Enersis Américas’ Board of Directors, over the conditions, and in compliance with provisions of articles 156 merger process. and 168 of Regulations of the Chilean Companies Act Law N°18,046. > On August 5, 2016, In accordance with articles (iv) Report issued by the Company’s Directors’ Committee, dated August 5, 2016; and 9 and 10, paragraph 2, under Securities Market Law (v) Individual opinions of the Company Directors, N°18,045 and as established under General Norm N°30 of Messrs. Borja Acha B. (Chairman), José Antonio 194 Enel Américas Annual Report 2016 Vargas L. (Vice Chairman), Livio Gallo, Enrico of Enersis Américas, Endesa Américas and Viale, Hernán Somerville S., Patricio Gómez S. Chilectra Américas, respectively. and Domingo Cruzat A., all dated August 5, 2016. 2. The Merger would be subject to the following (vi) The document comprising the terms and conditions precedent (the “Conditions conditions of the proposed merger prepared in Precedent”): accordance with Article 155(a) of the Chilean Companies Regulations, which contains the (i) The right to withdraw that may be exercised objectives and expected benefits of the merger; by the shareholders of Enersis Américas as a result of the Merger may not exceed 10% II. Merger. Once item I above has been approved, of its outstanding voting shares; provided pursuant to the terms of Title IX of the LSA, and of that the exercise by the shareholders of paragraph 3 of Title IX of the Chilean Companies Enersis Américas of the right to withdraw Regulations, approve (i) the proposed Merger by does not result in any shareholder exceeding virtue of which Enersis Américas, in its capacity as the maximum shareholding concentration the surviving company, would absorb by acquisition limit of 65% in Enersis Américas on the date each of Endesa Américas and Chilectra Américas, the exercise period of the right to withdraw each of which would then dissolve without the by dissenting shareholders is due to expire, need for their liquidation, succeeding them in all considering for that purpose the number of their rights and obligations; and (ii) the background shares into which the new Enersis Américas information that serves as foundation for the Merger. capital stock approved according to item 4 The specific terms and conditions of the Merger will below is divided; be the following: 1. The background information that serves as by the shareholders of Endesa Américas as a foundation for the Merger, according to the result of the Merger may not exceed 10% of applicable legislation, was made available to the its outstanding voting shares; (ii) The right to withdraw that may be exercised shareholders today, including: (iii) The right to withdraw that may be exercised (i) The document containing the terms and by the shareholders of Chilectra Américas as conditions of the proposed Merger, drawn a result of the Merger may not exceed 0.91% up in accordance with Article 155(a) of the of its outstanding voting shares; and Chilean Companies Regulations, and which also contains the objectives and expected If one or more of the events described in benefits of the Merger; numerals (i), (ii) or (iii) above occurs within the 60 days of the date of the respective (ii) The balance sheets and financial statements shareholders’ meetings to vote on the of Enersis Américas, Endesa Américas and merger, the shareholders of each of the Chilectra Américas as of June 30, 2016, duly merging companies may agree at a new audited by the external audit firms Ernst shareholders’ meeting that the merger will & Young, KPMG Auditores Consultores take effect notwithstanding these effects. Limitada, and RSM Chile Auditores Limitada, respectively; and 3. Once the Conditions Precedent have been satisfied, the representatives appointed by (iii) The expert reports prepared by Messrs. Pablo the Boards of Directors of Enersis Américas, D´Agliano, Colin Becker and Emilio Venegas Endesa Américas, and Chilectra Américas Valenzuela, all issued on August 5, 2016, and shall grant a single declaratory public deed, commissioned by the Boards of Directors notifying about the compliance with said 195 Conditions Precedent. Said public deed shall of Enersis Américas with regards to their Pre be titled “Deed of Compliance with Merger Merger Shares, will be subscribed and paid. The Conditions.” shares associated with the capital increase will be totally assigned to be distributed among the The Merger shall be effective as of the first day of shareholders of Endesa Américas and Chilectra the calendar month following the month in which Américas, excluding the shareholders of the aforementioned Deed of Compliance with Enersis Américas, according to the assignation Merger Conditions is granted. The foregoing is rule described in the following number 11, in without prejudice to timely compliance with the proportion to the corresponding share in relation registration in the corresponding Commercial to the exchange defined in the Merger. Registry and publication in the Official Gazette of the extracts of the respective public deed 5. An exchange ratio of 2.8 shares of Enersis recordings, either prior to or after granting the Américas for each share of Endesa Américas Deed of Compliance with Merger Conditions. and 4 shares of Enersis Américas for each share Once the Merger has become effective, it will of Chilectra Américas will be proposed without be timely informed to the SVS and to the market considering fractions of shares.  as an essential fact. 6. The name of the Company shall be changed 4. A capital increase of Enersis Américas by the to Enel Américas S.A. and it will be clarified amount Ch $1,046,470,167,544, through the that it is a publicly traded company. issuance of 9,232,202,636 new registered shares of the same series and without par 7. The corporate purpose of Enersis Américas value, which will be subscribed and paid, in shall be changed in order to allow related whole or part, using the incorporated equity of companies and associates of Enersis the shareholders of the absorbed companies, Américas as potential recipients of its excluding for purposes of this subscription and services, and a formal amendment of the capital payment, the shareholding capital Enersis text shall be drafted to that effect. Américas owns in each of Endesa Américas and Chilectra Américas through shares it currently 8. The following articles of Enersis Américas’ owns in the companies (“Current Shares”). bylaws will be modified, for the sole purpose This also applies for those shares issued by its name, as indicated in numbers 4, 6 and of increasing the capital stock and changing Endesa Américas acquired prior to the Merger, 7 above: as a consequence of the pubic offering for the acquisition of shares to be performed by (i) Amendment of Article One, informing that Enersis Américas and covering all the shares and the new name of the Company will be Enel American Depositary Receipts (ADRs) of Endesa Américas S.A., clarifying that it is a publicly Américas not owned by Enersis Américas, in the traded company; terms and conditions to be promptly detailed at the time the offer is carried out (hereafter, the (ii) Amendment of Permanent Article Fourth, in shares acquired will be named “OPA Shares”, order to insert in the first paragraph a comma and together with the Current Shares, will be (,) between expressions “foreign” and “the called “Pre Merger Shares”). In the moment exploration” and replace in letter d) the where the Merger takes place, the only part of terms “associate companies” with “related, the share capital increase of Enersis Américas subsidiaries and associate companies”; to be charged to the equity incorporation related to the shareholders of the companies absorbed (iii) Amendment of Article Five, informing of in the Merger, including those shareholders the increase of Enersis Américas’ capital 196 Enel Américas Annual Report 2016 resulting from the Merger, and the issuance The Current Shares are excluded from this of newly registered shares of a single series designation as they are left ineffective as a result and without par value; of the merger. (iv) Rescind all of the bylaws’ transitional 12. Agree on any other matters that the shareholders provisions due to loss of validity, and add a may deem appropriate with respect to the new Transitional Article One related to the proposed Merger, and fully authorize the board status of the subscription and payment of of directors of Enersis Américas to grant all the the capital stock after the Merger. powers of attorney that it may deem necessary, especially those necessary to legalize, (v) Likewise, and subject to the approval of the materialize, and carry out the Merger and any following item III, a new Transitional Article other agreements adopted. Two will be added to those consolidated text of Enersis Américas’ bylaws while It is noted that the dissenting shareholders approved for the Merger, with regards to of the merger will be entitled to exercise their the cancellation of Shares of Own Issuance withdrawal rights in accordance with the (according to the term to be defined ahead). provisions of Article 69 of the LSA. The terms and conditions for the exercise of the withdrawal 9. A consolidated text of Enersis Américas’ bylaws, right shall be informed promptly, in accordance which will include the amendments indicated in with the current law and regulations. number 8 above, will be granted. III. Cancellation of repurchased shares. In order that 10. For the purposes of the provisions of Article the absorbing company should not be a holder 69 of the Tax Code, Enersis Américas, in its of any repurchased shares at the time of the capacity as the surviving company and legal Merger, it will be proposed to the shareholders successor of Endesa Américas and Chilectra of the merging companies to approve that, if Américas, shall be liable and shall be required the withdrawal right is exercised by up to the to pay all the taxes owed or that may be owed maximum percentage agreed as a condition by Endesa Américas and Chilectra Américas, precedent to the Merger, the repurchased shares according to the final financial statements that which are acquired as a result of the above by Endesa Américas and Chilectra Américas must Enersis Américas, Endesa Américas and/or prepare by virtue of the aforementioned legal Chilectra Américas (hereinafter these shares provision. shall be known as “repurchased shares”) will be cancelled on the shareholders register. 11. The Board of Directors of Enersis Américas shall allocate the new shares and update its For these purposes, and via an agreement that shareholder ledger at midnight of the day prior is subsequent to and separate from the Merger, to the date on which the Merger becomes a capital decrease of Enersis Américas shall be effective, considering for this purpose the proposed, subject to the Merger taking place, for the shareholders registered in the shareholder amount up to the amount incurred by any company ledgers of Endesa Américas and Chilectra to acquire repurchased shares, in accordance with Américas on that date, and any duly executed the price to be paid for the exercise of the withdrawal conveyances, transfers, and transmissions of right in each company, which will be reported at the shares that may have been submitted to Endesa shareholders meeting. The maximum amount that Américas and Chilectra Américas prior to the this capital reduction could reach shall be informed Merger and that may not yet have been finalized at the meeting to be convened based on a previously and recorded in the corresponding shareholder designated formula. This capital decrease shall be ledger. subject to the following terms and conditions: 197 (a) In the first place, the effect of not transferring Américas as well as all other background information repurchased shares shall be agreed upon. that may serve as basis to decide on the OPR and (b) The reduction of capital shall occur automatically, www.chilectraamericas.cl, respectively. immediately, and without further formalities: (i) with regards to all the shares issued by Enersis Américas > On August 5, 2016, the following significant event Merger are available at www.endesaamericas.cl and that are repurchased by Enersis Américas prior to was informed: the Merger their, cancellation will occur immediately and automatically once the company has paid for In accordance with articles 9 and 10, paragraph 2, under and acquired ownership and (ii) with regard to all Securities Market Law N°18,045 and as established shares issued by a subsidiary that are repurchased under General Norm N°30 of the Superintendence, by the subsidiary prior to the time the Merger takes duly authorized on behalf of Enersis Américas place, their cancellation shall occur immediately and S.A. (“Enersis Américas” or the “Company”), it automatically upon the effectiveness of the Merger; was informed as significant event that the board and (iii) with regard to all the repurchased shares of Directors of Enersis Américas S.A., in session that Enersis Américas pays for and acquires after the held on August 5, 2016, took notice of the following effectiveness of the Merger and until 1st of April, information regarding the related party transactions 2017, their cancellation shall take place immediately associated to the merger by incorporation of Endesa and automatically once it has paid for and acquired Américas S.A. and Chilectra Américas S.A. in Enersis their ownership. Américas S.A. (the “Merger”): (c) The Board of Directors or the Chief Executive Officer (a) The final, independent evaluation on the related-party of Enersis Américas shall grant a declaratory public transaction that is part of the Merger, issued by deed recording of whether any reductions of capital Banco Itaú, the independent reviewer appointed by took place and, if so, of Enersis Américas’ new capital the Board of Directors, within the framework of the amount, within the following timeframes: (i) within Corporate Reorganization; ten days following the date the Merger becomes effective, and (ii) within ten days after April 1, 2017. (b) The final, independent evaluation on related-party Each of those public deeds shall be annotated in the transaction that is part of the Merger, issued by margin of Enersis Américas’ corporate registration. Credicorp (IM Trust), the independent reviewer appointed by the Board of Directors, within the IV. Information about other related-party transactions. framework of the Corporate Reorganization; Report to shareholders about any agreements on other related-party transactions within the meaning (c) The final expert report issued by Mr Pablo D’Agliano, of Title XVI of the LSA, other than the Merger, appointed by the Company’s Board of Directors held during the period since the last shareholders’ to report on the value of the merging companies, meeting of Endesa Américas, indicating the directors Enersis Américas, Endesa Américas and Chilectra that approved them. Américas, and the exchange ratios of the companies Shareholders may obtain copies of the documents involved;; that explain and support the matters submitted for (d) A fairness opinion issued by financial consultant, the discussion and approval of the Board at the Bank of America Merrill Lynch, appointed by the corporate office located at Santa Rosa 76, 15th Company’s Board of Directors to advise on the Floor (Investor Relations Department), Santiago, Corporate Reorganization process; Chile. These documents will also be available to the shareholders on the Company’s website: www. (e) The individual statements by the Directors of Enersis enersis.cl. The reports of the independent appraisers Américas; Messrs. Borja Acha B., Chaiman, José and experts of Endesa Américas and Chilectra Antonio Vargas L., Vice-chairman, and directors 198 Enel Américas Annual Report 2016 Livio Gallo, Enrico Viale, Hernán Somerville S., 2. Furthermore, and once the call is made for the Patricio Gómez S. and Domingo Cruzat A., related Extraordinary Shareholders’ Meeting of Enersis to the Merger as a related-party transaction, issued Américas to decide regarding the merger with pursuant to Article 147 of the Corporations Act, and Endesa Américas S.A. and Chilectra Américas S.A., as shown in the Significant Event issued on August (f) The report of the Enersis Américas Directors’ 5, 2016, the Company has considered the following Committee in relation to the Merger, issued pursuant relevant for greater transparency of the process, to article 50 bis of Corporations Law No. 18,046. and due to the importance of this transaction, to Shareholders can obtain copies of the aforementioned according to applicable United States regulations, as restate selected information that affects the process documents at the Company’s office, located at Santa follows: Rosa 76, Floor 15 (Investor Relations area), Santiago, Chile. The documents are also available on the As indicated in the application made by Enersis Company’s website at: www.enersis.cl Américas to the Superintendence of Securities and Insurance on May 23, 2016, and in submissions made > On August 16, 2016, the following significant event was by the same entity regarding Endesa Américas on informed: May 31, 2016, and with regard to Enersis Américas and Chilectra Américas S.A., on June 1, 2016, all In accordance with articles 9 and 10, paragraph 2, under applications and public submissions and the ones Securities Market Law N°18,045 and as established informed to the Superintendence of Securities and under General Norm N°30 of the Superintendence, it Insurance in its response by means of Ordinary was informed of the following significant event: Official Letter No. 16,030 dated July 1, 2016, referred 1. In accordance with article 69 of Law No. 18,046 of to extend the period of validity of the financial the Chilean Companies Act and article 132 of the statements that will be used in the merger, pursuant Chilean Companies Regulation, approved by Decree to provisions of the applicable regulation. to companies asked to the Superintendence No. 702, issued in 2011 by the Ministry of Finance, which establishes that the market value of the Under the rules of the U.S. Securities Exchange shares that must be paid to shareholders exercising Commission (the “SEC”) that are applicable to the their withdrawal rights in corporations with stock proposed merger transaction, a final information market participation, corresponds to the weighted statement or final prospectus must be sent to average of the stock prices during transactions of ADR holders and US resident shareholders 20 the share in a period of 60 business days between days in advance of the extraordinary meeting of the thirtieth and the ninetieth stock market trade shareholders scheduled for September 28, 2016. prior to the date of the meeting that precedes the The information statement and prospectus is withdrawal. It is possible to establish from that date contained in a Registration Statement on Form F-4 the price to be paid to each dissenting shareholder (the “Form F-4”) that must be declared effective who decides to exercise their withdrawal rights by the SEC before the final information statement/ on the occasion of the agreements adopted at the propsectus may be disseminated. Enersis Américas Company’s Extraordinary Shareholders’ Meeting to currently expects that the Form F-4 will be declared be held on September 28, 2016. effective in time to disseminate the final information statement/prospectus sufficiently in advance of the As established above, the price to be paid to each extraordinary shareholder meeting to comply with shareholder that is registered in the shareholders’ applicable SEC rules. However, there can be no register of Enersis Américas five days prior to assurance that the Form F-4 will be declared effective the meeting who decides to exercise his or her in accordance with the expected timetable. withdrawal rights will be Ch$ 112.02 per share of Enersis Américas. If the SEC does not declare the Form F-4 effective in 199 time, or does not grant other relief, the extraordinary must be duly communicated to the Securities shareholders meeting may not be held on September Exchange Commission (“SEC”) for their approval 28, 2016 as scheduled and must be postponed to a of documentation relevant to the transaction, the later date. Board of Directors has definitively fixed the price, which may not be modified once the SEC grants If the meeting is postponed, Enersis Américas their approval, which will be communicated through and Endesa Américas would be required by SVS a Significant Event. regulations to prepare new financial statements that are audited in accordance with Chilean requirements 2. By unanimous decision, modify the date and matters covering periods through a date that is within 90 discussed at the Extraordinary Shareholders’ days of the rescheduled extraordinary shareholders Meeting summoned by the Board of Directors on meeting. In addition, the Form F-4 would need to August 5, 2016 as detailed in a significant event of the be amended and updated, and the SEC would need same date. As such, an Extraordinary Shareholders’ to review the amended Form F-4 and declare it Meeting will be held on September 28, 2016, at 9:30 effective. am, in Enersis’ Stadium, located at Carlos Medina N° The above-mentioned do not materially affect 858, Santiago. the execution and completion of the corporate The matters to be discussed and voted on at the reorganization that is currently underway by Enersis Extraordinary Shareholders’ Meeting are as follows: Américas and its subsidiaries, Endesa Américas and Chilectra Américas, and if the operation were I. Related-party transactions (“OPR”). Pursuant to delayed, it will not affect its completion. the terms of Title XVI of the Chilean Companies Act, Law No. 18,046 (“LSA”,), to approve the OPR, > On August 31, 2016, the following significant event which consists of the proposed statutory merger was informed: of Endesa Américas S.A. (“Endesa Américas”) and Chilectra Américas S.A. (“Chilectra Américas”), Pursuant to the provisions of articles 9 and 10, into Enersis Américas (the “Merger”), referred to paragraph two, of Securities Market Law No. 18,045, in item II below, taking into account the following and to the provisions of General Norm No. 30 of that background data that serves as its foundation, Superintendence, and exercising the powers conferred and which are available to the shareholders at the upon me, I inform you, on an essential fact basis, that in Company’s corporate address and on its website an extraordinary session held on August 31, the Board www.enersis.cl: of Directors of Enersis Américas S.A. agreed to the following: (i) Report issued by Banco Itaú, the independent appraiser appointed by the Board of Directors, 1. By unanimous decision, the Board of Directors dated August 5, 2016; announced that the tender offer (“OPA” in its Spanish acronym) by Enersis Américas for any and all (ii) Report issued by Credicorp (IM Trust), the outstanding shares and American Depositary Shares independent appraiser appointed by the (“ADSs”) of Endesa Américas S.A., will be launched Directors’ Committee, dated August 5, 2016; September 13, 2016. By a majority of the Board of Directors, announced of America Merrill Lynch, the financial advisor of that with the goal of contributing to the success of Enersis Américas’ Board of Directors, over the (iii) Fairness opinion dated August 5, 2016 by Bank the operation, the price to be paid for each share of merger process; Endesa Américas S.A. is 300 Chilean pesos. Based on the fact that the price of the tender offer Committee, dated August 5, 2016; and; (iv) Report issued by the Company’s Directors’ 200 Enel Américas Annual Report 2016 (v) Individual opinions of the Company Directors, Pablo D´Agliano, Colin Becker and Emilio Messrs. Borja Acha B. (Chairman), José Antonio Venegas Valenzuela, all issued on August Vargas L. (Vice Chairman) Livio Gallo, Enrico 5, 2016, and commissioned by the Viale, Hernán Somerville S., Patricio Gómez S. Boards of Directors of Enersis Américas, and Domingo Cruzat A., all dated August 5, 2016. Endesa Américas and Chilectra Américas, respectively. (vi) The document comprising the terms and conditions of the proposed merger prepared in 2. The Merger would be subject to the following accordance with Article 155(a) of the Chilean conditions precedent (the “Conditions Companies Regulations, which contains the Precedent”): objectives and expected benefits of the merger. II. Merger. Once item I above has been approved, exercised by the shareholders of Enersis (A) (i) The right to withdraw that may be pursuant to the terms of Title IX of the LSA, Américas as a result of the Merger may and of paragraph 3 of Title IX of the Chilean not exceed 10% of its outstanding voting Companies Regulations, approve (i) the proposed shares; provided that the exercise by the Merger by virtue of which Enersis Américas, in its shareholders of Enersis Américas of the capacity as the surviving company, would absorb right to withdraw does not result in any by acquisition each of Endesa Américas and shareholder exceeding the maximum Chilectra Américas, each of which would then shareholding concentration limit of 65% dissolve without the need for their liquidation, in Enersis Américas on the date the succeeding them in all their rights and obligations; exercise period of the right to withdraw and (ii) the background information that serves as by dissenting shareholders is due to foundation for the Merger. The specific terms and expire, considering for that purpose the conditions of the Merger will be the following: number of shares into which the new 1. The background information that serves as according to item 4 below is divided; foundation for the Merger, according to the (ii) the right to withdraw that may be applicable legislation, was made available to exercised by the shareholders of Endesa Enersis Américas capital stock approved the shareholders today, including: Américas as a result of the Merger may not exceed 10% of its outstanding voting (i) The document containing the terms and shares; and (iii) the right to withdraw that conditions of the proposed Merger, drawn may be exercised by the shareholders up in accordance with Article 155(a) of of Chilectra Américas as a result of the the Chilean Companies Regulations, and Merger may not exceed 0.91% of its which also contains the objectives and outstanding voting shares; and expected benefits of the Merger; (B) If one or more of the events described in (ii) The balance sheets and financial numerals (i), (ii) or (iii) above occurs within statements of Enersis Américas, Endesa the 60 days of the date of the respective Américas and Chilectra Américas as shareholders’ meetings to vote on the of June 30, 2016, duly audited by the merger, the shareholders of each of the external audit firms Ernst & Young, KPMG merging companies may agree at a new Auditores Consultores Limitada, and RSM shareholders’ meeting that the merger Chile Auditores Limitada, respectively; will take effect notwithstanding these and effects. (iii) The expert reports prepared by Messrs. 3. Once the Conditions Precedent have been 201 satisfied, the representatives appointed by 7. The corporate purpose of Enersis Américas the Boards of Directors of Enersis Américas, shall be changed in order to allow related Endesa Américas, and Chilectra Américas companies and associates of Enersis shall grant a single declaratory public deed, Américas as potential recipients of its notifying about the compliance with said services, and a formal amendment of the text Conditions Precedent. Said public deed shall shall be drafted to that effect. be titled “Deed of Compliance with Merger Conditions.” 8. The following articles of Enersis Américas’ bylaws will be modified, for the sole purpose The Merger shall be effective as of the first of increasing the capital stock and changing day of the calendar month following the its name, as indicated in numbers 4, 6 and 7 month in which the aforementioned Deed above: of Compliance with Merger Conditions is granted. The foregoing is without prejudice (i) Amendment of Article One, informing that to timely compliance with the registration the new name of the Company will be Enel in the corresponding Commercial Registry Américas S.A., clarifying that it is a publicly and publication in the Official Gazette of traded company; the extracts of the respective public deed recordings, either prior to or after granting the (ii) Amendment of Permanent Article Fourth, in Deed of Compliance with Merger Conditions. order to insert in the first paragraph a comma Once the Merger has become effective, it (,) between expressions “foreign” and “the will be timely informed to the SVS and to the exploration” and replace in letter d) the market as an essential fact. 4. An increase in the authorized capital terms “associate companies” with “related, subsidiaries and associate companies” of Enersis Américas by the amount Ch (iii) Amendment of Article Five, informing of $1,046,470,167,544, through the issuance the increase of Enersis Américas’ capital of 9,232,202,636 new registered shares resulting from the Merger, and the issuance of the same series and without par value, of newly registered shares of a single series which will be subscribed and paid, in whole and without par value; and or part, using the incorporated equity of the shareholders of the absorbed companies, (iv) Rescind all of the bylaws’ transitional excluding for purposes of this subscription provisions due to loss of validity, and add a and capital payment, the shareholding capital new Transitional Article One related to the Enersis Américas owns in each of Endesa status of the subscription and payment of the Américas and Chilectra Américas through capital stock after the Merger. shares it currently owns in the companies (“Current Shares”). 9. A consolidated text of Enersis Américas’ bylaws, which will include the amendments 5. An exchange ratio of 2.8 shares of Enersis indicated in number 8 above, will be granted. Américas for each share of Endesa Américas and 4 shares of Enersis Américas for each 10. For the purposes of the provisions of Article share of Chilectra Américas will be proposed 69 of the Tax Code, Enersis Américas, in its without considering fractions of shares. capacity as the surviving company and legal successor of Endesa Américas and Chilectra 6. The name of the Company shall be changed Américas, shall be liable and shall be required to Enel Américas S.A. and it will be clarified to pay all the taxes owed or that may be owed that it is a publicly traded company. by Endesa Américas and Chilectra Américas, 202 Enel Américas Annual Report 2016 according to the final financial statements that Shareholders may obtain copies of the documents Endesa Américas and Chilectra Américas must that explain and support the matters submitted prepare by virtue of the aforementioned legal for the discussion and approval of the Board at provision. the corporate office located at Santa Rosa 76, 15th Floor (Investor Relations Department), 11. The Board of Directors of Enersis Américas Santiago, Chile. These documents will also be shall allocate the new shares and update its available to the shareholders on the Company’s shareholder ledger at midnight of the day prior to website: www.enersis.cl. The reports of the the date on which the Merger becomes effective, independent appraisers and experts of Endesa considering for this purpose the shareholders Américas and Chilectra Américas as well as all registered in the shareholder ledgers of Endesa other background information that may serve Américas and Chilectra Américas on that date, as basis to decide on the OPR and Merger are and any duly executed conveyances, transfers, available at www.endesaamericas.cl and www. and transmissions of shares that may have been chilectraamericas.cl, respectively. submitted to Endesa Américas and Chilectra Américas prior to the Merger and that may not Lastly, in accordance with applicable law, a yet have been finalized and recorded in the notice of meeting will be published and a letter corresponding shareholder ledger. to shareholders containing information relating to The Current Shares are excluded from this before September 13, 2016. designation as they are left ineffective as a result of the merger. > On September 1, 2016, the following the meeting will be mailed to shareholders on or significant event was informed: 12. Agree on any other matters that the shareholders may deem appropriate with respect to the Pursuant to the provisions of articles 9 and 10, proposed Merger, and fully authorize the board paragraph two, of Securities Market Law No. of directors of Enersis Américas to grant all the 18,045, and to the provisions of General Norm powers of attorney that it may deem necessary, No. 30 of that Superintendence, and exercising especially those necessary to legalize, the powers conferred upon me, I inform you, on materialize, and carry out the Merger and any an essential fact basis, that in an extraordinary other agreements adopted. session held today, the Board of Directors of Enersis Américas S.A. (“Enersis Américas” or It is noted that the dissenting shareholders of the “Company”) agreed to the following: the merger will be entitled to exercise their By unanimous decision, the Board of Directors withdrawal rights in accordance with the announced that the tender offer (“OPA” in its provisions of Article 69 of the LSA. The terms Spanish acronym) by Enersis Américas for and conditions for the exercise of the withdrawal any and all outstanding shares and American right shall be informed promptly, in accordance Depositary Shares (“ADSs”) of Endesa Américas with the current law and regulations. S.A., will be launched September 13, 2016. Information about other related-party By a majority of the Board of Directors, transactions. Report to shareholders about any announced that with the goal of contributing to agreements on other related-party transactions the success of the operation, the price to be paid within the meaning of Title XVI of the LSA, for each share of Endesa Américas S.A. is 300 other than the Merger, held during the period Chilean pesos. since the last shareholders’ meeting of Endesa Américas, indicating the directors that approved Based on the fact that the price of the tender offer them. must be duly communicated to the Securities 203 Exchange Commission (“SEC”) for their approval Additionally, and in accordance with the provisions of documentation relevant to the transaction, the of General Norm No. 30 of that Superintendence, Board of Directors has definitively fixed the price, we inform you that the aforementioned declaration which may not be modified once the SEC grants of effectiveness of the Form F-4 allows Enersis their approval, which will be communicated Américas to confirm that the event described in the through a Significant Event. Significant Event dated August 16, 2016, consisting of the possibility that the next Extraordinary By unanimous decision, modify the date Shareholders’ Meeting to be held on September and matters discussed at the Extraordinary 28 would be postponed as a result of not obtaining Shareholders’ Meeting summoned by the Board a timely declaration of effectiveness can no longer of Directors on August 5, 2016 as detailed in a occur. significant event of the same date. As such, an Extraordinary Shareholders’ Meeting will be held Finally, we inform shareholders and the market in on September 28, 2016, at 9:30 am, in Enersis’ general that a complete copy of the information Stadium, located at Carlos Medina N° 858, statement/prospectus is available, as of this date, Santiago. on the Company’s website: www.enersis.cl. > On September 8, 2016, the following > On September 12, 2016, the following significant event significant event was informed: was informed: Pursuant to the provisions of articles 9 and 10, Pursuant to the provisions of articles 9 and 10, paragraph two, of Securities Market Law No. paragraph two, of Securities Market Law No. 18,045, 18,045, and to the provisions of General Norm No. and to the provisions of General Norm No. 30 of the 30 of that Superintendence, a Significant Event was Superintendence, the Company informed as Significant informed regarding that the Securities and Exchange Event, that the Board of Directors of Enersis Américas Commission (“SEC”) of the United States of S.A. (“Enersis Américas” or the “Company”), at an Américas has declared the validity or “effectiveness” extraordinary meeting held today, agreed by unanimous of the Registration Statement on Form F-4 (“Form decision of its members and in accordance with the F-4”), filed by Enersis Américas S.A. (“Enersis information announced in the Significant Event dated Américas” or the “Company”) with said authority, August 31, to proceed with a public acquisition of shares in accordance with the Securities Act of 1933, to (“OPA” in its Spanish acronym) for all shares issued record the issuance of American Depositary Shares by Endesa Américas S.A. and a “Tender Offer” for all (“ADS”) by the Company as a result of the capital American Depositary Shares (“ADSs”) and for shares increase, which will be the objective in the event the merger with its associates Endesa Américas S.A. whose holders are residents of the United States, issued by said company.  and Chilectra Américas is approved. It is reported that the Notice of Commencement of Under the United States rules applicable to the the aforementioned OPA will be published tomorrow, case, the information statement/prospectus that September 13, in Chile and the Tender Offer will be is part of the Form F-4, will be made available to disseminated on September 14 in the United States, shareholders and holders of ADSs to inform them initiating the receipt of tenders in both offers of the about matters to be voted on at the upcoming shareholders of Endesa Américas S.A., as of September extraordinary shareholders’ meetings of Enersis 14. The terms and conditions of the OPA and Tender Américas and Endesa Américas to be held on Offer are essentially the same and are reflected in the September 28, 2016 and information about the Prospectus of the OPA and the Schedule TO, which will be shares and ADSs of Enersis Américas offered to made available to the shareholders of Endesa Américas holders of Endesa Américas shares and ADSs in S.A. and the market generally no later than September 14 the merger. on the Company’s website: www.enersis.cl. 204 Enel Américas Annual Report 2016 > On September 28, 2016, the following significant event withdrawal right by the statutory merger dissenting was informed: shareholders is due to expire, considering for that purpose the number of shares into which the new In accordance with articles 9 and 10, paragraph 2, under Enersis Américas capital stock approved by the Securities Market Law N°18,045, and as established Board will be divided; (ii) that the withdrawal right under General Norm N°30 of the Superintendence that may be exercised by the shareholders of Endesa of Securities and Insurance (“SVS”), and exercising Américas as a result of the Merger may not exceed the powers conferred upon me, I come to inform you 10% of its outstanding voting shares; or (iii) that in this Significant Event, that today, the Extraordinary the withdrawal right that may be exercised by the Shareholders’ Meeting of Enersis Américas S.A. shareholders of Chilectra Américas as a result of the (“Enersis Américas” or the “Company”) resolved, Merger may not exceed 0.91% of its outstanding complying with the quorum required by law and the voting shares; and Company’s by-laws, the following: (B) If one or more of the events described in numbers (i), 1. Approve, pursuant to the terms of Title XVI of the (ii) or (iii) of letter A above should occur within 60 days Chilean Companies Act No. 18,046 (“LSA”), the of the date of the respective shareholders’ meetings related-party transaction (“OPR”), that consists of to favorably vote on the Merger, the shareholders’ the proposed statutory Merger of Endesa Américas meetings of each of the merging companies have S.A. (“Endesa Américas”) and Chilectra Américas agreed at a subsequent shareholders’ meeting that S.A. (“Chilectra Américas”) to Enersis Américas (the the effects, deriving from any one of these facts “Merger”). and having been agreed, should not be applicable therefore, that the Merger shall become effective. 2. Approve, pursuant to the terms of Title IX of the LSA, and of paragraph 3 of Title IX of the Chilean Should the Conditions Precedent be met, a single Companies Regulations, the proposed Merger by declaratory public deed shall be issued notifying of virtue of which Enersis Américas, in its capacity as the compliance with said Conditions Precedent. Said the surviving company, would absorb by acquisition public deed shall be titled “Deed of Compliance with the subsidiaries Endesa Américas and Chilectra the Merger Conditions.” Américas, each of which would then dissolve without the need for their liquidation, succeeding them in all The Merger shall be effective as of the first day of their rights and obligations; and the specific terms the calendar month following the month in which and conditions of the Merger and the background the aforementioned Deed of Compliance with the information that serves as the foundation of the Merger Conditions is granted and once the Merger Merger. has become effective, it will be informed in a timely manner to the SVS, to other relevant entities and to The Merger was subject to the compliance of the the market as a Significant Event. following conditions precedent (the “Conditions Precedent”): The shareholders’ meeting has approved the exchange ratio of 2.8 shares of Enersis Américas (A) (i) The withdrawal rights that may be exercised by for each share of Endesa Américas and 4 shares the statutory merger dissenting shareholders of of Enersis Américas for each share of Chilectra Enersis Américas as a result of the Merger may Américas, without considering fractions of shares. not exceed 10% of its outstanding voting shares; provided that the exercise by the shareholders of The Merger will entail a capital increase of Enersis Enersis Américas of the withdrawal right does not Américas by the amount of Ch$ 1,046,470,167,544, result in any shareholder exceeding the maximum through the issuance of 9,232,202,625 new shareholding concentration limit of 65% in Enersis registered shares of the same series and without par Américas on the date the exercise period of the value, which will be subscribed and fully paid using 205 the incorporated equity of the shareholders of the Ø On October 20, 2016, the following significant absorbed companies, excluding for purposes of this event was informed: subscription and capital payment, the shareholding capital Enersis Américas currently owns in Endesa In accordance with articles 9 and 10, paragraph Américas and Chilectra Américas. At the same time, 2, under Securities Market Law N°18,045, and the following articles of bylaws will be modified as established under General Norm N°30 of the under the following terms: Superintendence of Securities and Insurance (“SVS”), it was informed of this Significant (i) Amendment of Article One, informing that the new Event, that today, Enersis Américas S.A. has name of the Company will be Enel Américas S.A., performed a bond issuance by reference to Form clarifying that it is a publicly traded company; F-3 Registration Statement de la Securities Act of 1933 of the United States of America, filed (ii) Amendment of Permanent Article Four, in on the Securities and Exchange Commission on order to insert in the first paragraph a comma October 12, 2016. This bond issuance is detailed (,) between expressions “foreign” and “the on the Notice N° 1,072 of this Superintendence, exploration” and replace in letter d) the attached to this significant event, and available at terms “associate companies” with “related, this Superintendece Website (www.svs.cl). subsidiaries and associate companies”; > On October 29, 2016 the following significant event was (iii) Amendment of Article Five, informing of informed: the capital increase of Enersis Américas’ resulting from the Merger, and the issuance Pursuant to the provisions of articles 9 and 10, of newly registered shares of a single series paragraph two, of Securities Market Law No. 18,045, and without par value; and to the provisions of General Norm No. 30 of the Superintendence, and exercising the powers conferred (iv) Rescind all of the bylaws’ transitional upon me and on behalf of (“Enersis Américas” or provisions due to loss of their validity, and add the “Company”), the following Significant Event was a new Transitory Article One related to the informed, regarding the conclusion of the period for status of the subscription and the payment of dissenting shareholders of the merger agreement (the the capital stock after the Merger, and “Merger”) of Enersis Américas and its subsidiaries (v) Issue a new, re-written text of the Enersis Chilectra Américas S.A. (“Chilectra Américas”), adopted Américas bylaws. at the extraordinary shareholders’ meeting of the It is hereby established Record that the statutory merger dissenters’ withdrawal rights in the Company held on September 28, 2016, to exercise their Endesa Américas S.A. (“Endesa Américas”) and Extraordinary Shareholders’ Meetings of Endesa Company, of the following: Américas and Chilectra Américas also held today and in which the Company participated 1. That the exercise of statutory merger dissenters’ as a shareholder, voted favorably on both the withdrawal rights in Enersis Américas did not OPR and the Merger, pursuant to the quorums exceed 10% of the outstanding voting shares by required by law and the bylaws of their respective said company and no shareholder has exceeded companies. the maximum concentration limit of 65% of the outstanding shares of Enersis Américas as of the Finally, I herby inform you that, notwithstanding conclusion of the period to exercise statutory merger what shall be communicated in due time, and dissenters’ withdrawal rights. pursuant to terms established by law and existing regulations, the statutory merger dissenting 2. That, as reported by Endesa Américas and Chilectra shareholders have the withdrawal right pursuant Américas on this same date through Significant to the existing legislation. Events, the exercise of statutory merger dissenters’ 206 Enel Américas Annual Report 2016 withdrawal rights in each of them did not exceed 18,045, and to the provisions of General Norm No. their respective thresholds of 10% of the outstanding 30 of the Superintendence, the following Significant voting shares of Endesa Américas and 0.91% of the Event was informed, held today and as resolved at outstanding voting shares of Chilectra Américas. the Extraordinary Shareholders’ Meeting of Enersis 3. That, having agreed at the extraordinary shareholders’ Américas on September 28, 2016, the Company has meetings of the three merging companies, held on signed in conjunction with its subsidiaries Endesa September 28, 2016, that the Merger remained Américas S.A. (“Endesa Américas”) and Chilectra subject to the conditions precedent (the “Conditions Américas S.A. (“Chilectra Américas”), the Deed Precedent”) consisting of the exercise of statutory of Compliance with Merger Conditions, which merger dissenters’ withdrawal rights by each of the affirms the verification of the conditions precedent company’s respective dissenting shareholders would to which the merger of Enersis Américas with the not exceed the thresholds indicated in numerals 1 aforementioned companies (the “Merger”) was and 2 above and, in the case of the statutory merger subject. dissenters’ withdrawal rights of Enersis Américas, In accordance with the resolutions of the not exceed the shareholder concentration limit of Extraordinary Shareholders’ Meetings of Enersis 65% indicated above, the Conditions Precedent Américas, Endesa Américas and Chilectra Américas to which the Merger was subject have been fully on September 28, 2016, the Merger will be effective met and, therefore, the approval of the Merger at as of the first calendar day of the month following the aforementioned extraordinary shareholders’ the month in which the Deed of Compliance with meetings is firmly declared, subject to the delivery Merger Conditions referred to in this Significant of a single declaratory public deed by the companies Event is granted and, therefore, the Merger will be for full effectiveness. effective on December 1, 2016. In accordance with what was approved at the On that date, the entire equity of Endesa Américas respective extraordinary shareholders’ meetings, and Chilectra Américas will be incorporated into the Merger will be effective as of the first calendar Enersis Américas, the latter occurring within all its day of the month following the month in which the rights and obligations with the respect to the former, declaratory public deed is granted. each of which would then dissolve without the need 4. That, as a result of the above, it was determined for their liquidation. that no causes for the cancellation of the public Additionally, it is reported that, as of December 1, acquisition of shares (“OPA” in its Spanish acronym) 2016, the absorbing company will change its current launched by Enersis Américas for the acquisition of corporate name, Enersis Américas S.A., to Enel 3,282,265,786 issued by Endesa Américas occurred Américas S.A. and that the conditions precedent of the Tender Offer launched by Enersis Américas in the United > On November 24, 2016, the following significant States for the acquisition of all American Depositary event was informed: Shares (“ADSs”) issued by Endesa Américas and all shares issued by that company, whose holders are Pursuant to the provisions of articles 9 and 10, paragraph resident in the United States, have been satisfied. two, of Securities Market Law No. 18,045, and to the Communications relating to the results of such provisions of General Norm No. 30 and Circular No. offers will be made in accordance with the legislation 660 of 1986, of the Superintendence, and exercising applicable to each of them. the powers conferred upon me, I inform you by Significant Event that today, the Board of Directors > On November 15, 2016, the following significant of Enersis Américas S.A. (“Enersis Américas” or the event was informed: “Company”), given that the merger by absorption of Chilectra Américas S.A. (“Chilectra Américas”) and Pursuant to the provisions of articles 9 and 10, Endesa Américas S.A. (“Endesa Américas”) into Enersis paragraph two, of Securities Market Law No. Américas will be effective on December 1, 2016; and 207 having been informed by Chilectra Américas by means Considering that the contents of the Industrial Plan of a Significant Event dated November 4, 2016, that are based on projections and hypotheses that may or the Board of Directors of said company approved a may not come true in the future, its effects cannot be modification to its Dividend Policy for the 2016 Fiscal established at this time. Year in light of said merger and subsequent dissolution, eliminating the distribution of the provisional dividends > On November 28, 2016, the following significant event originally contemplated; and having been informed was informed: by Endesa Américas by means of a Significant Event dated November 23, 2016, that due to the merger and Pursuant to the provisions of Circular No. 660 of 1986, dissolution of Endesa Américas as reported by its Board of the Superintendence, and exercising the powers of Directors, the Dividend Policy for the 2016 Fiscal Year conferred upon me, I hereby forward to you a correction would not be implemented; has resolved to declare, to Form No. 1 in the above referenced circular register unanimously by its members, that it is the intention of through the SIEL module, dated November 24, 2016 the Board of Directors of Enersis Américas – that as of by Enersis Américas SA which communicated the the date of the merger will be renamed Enel Américas distribution of a provisional dividend of $ 0.94664 per S.A. –, to maintain its current Dividend Policy for the share, charged against the 2016 financial year, to be 2016 Fiscal Year and, in this manner, distribute after the paid on January 27, 2017. The rectification changes the effective date of the merger a provisional dividend to all reference to “individualization of the movement”, in shareholders of the Company and maintain the proposed section 1.07 in Form No. 1, and corrects the notice of final dividend already contemplated. publication dated in numeral 7. In accordance with the above, the Board of Directors In compliance with the above, respectfully it was agreed, unanimously by its members, to the payment of requested to amend Form N°1, pursuant to the attached a Provisional Dividend of $ 0.94664 per share, charged significant event of November 28, 2016. against the 2016 financial year, to be paid as of January 27, 2017. Said amount corresponds to 15% of Enersis > On November 30, 2016, the following significant event Américas’ net profits as of September 30, 2016, based was informed: on the Company’s Financial Statements as of that date. Pursuant to the provisions of Circular No. 660 of 1986, In accordance with articles 9 and 10, paragraph 2, under of the Superintendence, we send to you, Form No. Securities Market Law No. 18,045, and as established 1, which provides relevant information regarding the under General Norm No. 30 of the Superintendence, agreed provisional interim dividend. duly authorized I hereby inform you of the following > On November 24, 2016, the following significant event was informed: significant event: The subsidiary Enel Brasil S.A. has presented the best offer for the acquisition of approximately 94.8% In accordance with articles 9 and 10, paragraph 2, under shareholding of the electricity distributor Celg Securities Market Law No. 18,045, and as established Distribuição S.A. (“CELG”), in the respective tender under General Norm No. 30 of 1989 issued by the process organized by the Brazilian Government through Superintendence, I hereby inform you of the following Banco Nacional do Desenvolvimento (“BNDES”). significant event: Today, the Board of Directors of Enersis Américas S.A. The financial offer amounted to 2,187 million of Brazilian (the “Company”), has approved the Industrial Plan of reais equivalent to approximately US$ 640 million. Enersis Américas Group for the period of 2017-2019. It is expected that the Brazilian Government will A copy of the aforementioned Industrial Plan can be announce the result of the tender on December 20, found on the Company’s website at the following link 2016 after a technical and economic evaluation of the www.enersis.cl. offer. It is expected that the execution and closing of 208 Enel Américas Annual Report 2016 the operation take place during the first quarter of 2017 Based on the above, the exchange of shares and the after the approval of the antitrust authority, Conselho distribution of Enel Américas shares certificates for Administrativo de Defesa Econômica (“CADE”), and the shares issued by the companies absorbed in the merger, sectorial regulator, Agência Nacional de Energia Elétrica Endesa Américas S.A. and Chilectra Américas S.A., shall (“ANEEL”). take place as of December 29, 2016. As of that date, the holders of the shares issued by the absorbed companies After the acquisition of the 94.8% shareholding, it will may withdraw the new share certificates issued by Enel remain approximately a 5.1% of CELG, which will be Américas, the absorbing company. The shareholders of offered to the employees and former employees of said Endesa Américas S.A. are entitled to receive 2.8 new company. Enel Brasil S.A. must acquire the remaining shares of Enel Américas per each share of Endesa shares that were not acquired by the aforementioned Américas S.A. owned on December 28, 2016. Similarly, employees and former employees. shareholders of Chilectra Américas S.A. will be entitled CELG was established in 1956 and its headquarter is of Chilectra Américas S.A. owned on December 28, to receive 4 new shares of Enel Américas per each share located in Goiania. CELG operates in a concession area 2016. of more than 337 thousand square kilometers, under a concession until 2045 and has 2.9 million customers. Pursuant to the provisions of article 67 of the Chilean Companies Regulations, the date of the referred This operation is part of the use of proceeds of the capital exchange will be informed to shareholders and to the increase approved by the Extraordinary Shareholders general public through a publication in El Mercurio Meeting held on December 20, 2012, which successfully newspaper of Santiago on December 27, 2016. Such concluded with the subscription of 100% of the available notification will include the details of the exchange and shares as of March 2013, raising nearly Ch$1,121,000 will specify the address and office hours in which the million in cash. From the original funds raised in the shareholders may withdraw their new certificates of aforementioned capital increase, as of today it remains Enel Américas, according to their convenience. approximately Ch$799,000 million. The Company’s management will explain in more detail legislation, the date established for the material the CELG acquisition process in a conference call to exchange of shares is also the date on which the shares all investors that will take place tomorrow, Thursday, of Endesa Américas S.A. and Chilectra Américas S.A. December 1, 2016 at noon Eastern Time (2 PM Chilean will cease their transactions. Lastly, I hereby inform you that pursuant to the current Local Time). > On January 11, 2017, the following significant event was > On December 26, 2016, the following significant event informed: was informed: Pursuant to the provisions of Resolution No. 660 of In accordance with articles 9 and 10, paragraph 2, 1986, of this Superintendence, and duly authorized on under Securities Market Law No. 18,045, and as behalf of Enel Américas S.A., I hereby forward to you a established under General Norm No. 30 issued in 1989 rectification of Form No. 1 contained in Resolution No. by the Superintendence, duly authorized by the Board 660, entered through the SEIL Module on November of Directors of Enel Américas S.A. (“Enel Américas” or 24, 2016 by Enersis Américas S.A., today Enel Américas the “Company”), I hereby inform you of the following S.A. (“Enel Américas” or the “Company”), in order to significant event: communicate the distribution of an interim dividend, to be charged against the financial result of 2016, Today, the Superintendence of Securities and Insurance corresponding to 15% of net income reported on has completed the registration of 9,232,202,625 new September 20, 2016,and to be paid from January 27, shares of the Company, issued due to the merger by 2017. incorporation of Endesa Américas S.A. and Chilectra Américas S.A into Enel Américas. This update is in relationto the number of shares which 209 have the right to receive the indicated dividend, due to changes since November 24, 2016 and as consequence of the withdrawal right exercised in Enel Américas and the merged companies Endesa Américas S.A. and Chilectra Américas S.A.. This update also informs about Endesa Américas the change in the corporate name of the Company to On April 14, 2016, in accordance with articles 9 and 10, Enel Américas S.A. paragraph 2, under the Securities Market Law Nº 18,045, and as established under General Norm N° 30 of the > On February 14, 2017, the following significant event was Superintendence, informed the following significant event informed: regarding the Board of Directors’ Meeting of Endesa Américas held today, has agreed the following: In accordance with articles 9 and 10 under Securities Market Law No. 18,045, and as established under 1.- To announce that, on April 13, 2016, the General Norm No. 30 of the Superintendence, duly Superintendence of Securities and Insurance authorized and on behalf of ENEL AMÉRICAS S.A., (Superintendencia de Valores y Seguros, “SVS”) the following significant event was informed: As proceeded to record Endesa Américas and its shares informed in the significant event dated November 30, in the Securities Registry, according to a certificate 2016, our subsidiary, Enel Brasil, awarded the public issued by this entity, and that it has made the tender offer organized by the Brazilian Government respective listings in the Santiago Stock Exchange, through Banco Nacional do Desenvolvimento (BNDES) the Valparaíso Stock Exchange, the Chile Electronic for the acquisition of the 94.8% shareholding of the Stock Exchange and the New York Stock Exchange of electricity distribution company Celg Distribuição S.A., United States of America, all in accordance with the which operates in the Brazilian State of Goias. As of decision made at the Extraordinary Shareholders’ today, I hereby inform you that the final closure of the Meeting of Empresa Nacional de Electricidad S.A. operation has taken place since the antitrust authorities, (“Endesa Chile”) held on December 18, 2015. Conselho Administrativo de Defensa Econômica (CADE) Therefore, the shares of the divided equity of Endesa and the sector regulator Agência Antimonopólica de Américas should be distributed free of any payment Energia Eléctrica (ANEEL) have granted the appropriate to the shareholders of Endesa Chile entitled to authorizations. Consequently, the sale contract of receive them. approximately 94.8% equity of Celg Distribuição S.A. has been signed for a total of 2,187 million Brazilian reals 2.- The Board of Directors of Endesa Américas agreed (approximately US$ 640 million). to carry out the distribution and delivery of a total of 8,201,754,580 shares issued by Endesa Américas, all The purchase of CELG was financed with resources nominative, of a unique and single series and without raised in the Enel Américas capital increase approved at nominal value, on April 21, 2016, to the shareholders the end of 2012. of Endesa Chile that were listed in its shareholders’ registry at the midnight of the day before April 21, This acquisition increases the customers of Enel Brasil 2016. from a base of 7 to 10 million, which rises the number of the Enel Group’ customers at a Global level to 3.- This distribution to the shareholders of Endesa approximately 65 million. Chile will be carried out by delivering one (1) share of Endesa Américas for each share of Endesa Chile that will be registered under its name in the registry at the midnight of the day before April 21, 2016. From April 21, 2016 onwards, the shares issued by Endesa Américas may be officially quoted in the stock markets aforementioned. 210 Enel Américas Annual Report 2016 4.- Representative titles of the shares in Endesa to distribute a definitive dividend amounting to Ch$ Américas will be available for shareholders of Endesa 9.37144 per share, to be paid from May 24, 2016, to Chile to be withdrawn on April 21, 2016 at the Equity those shareholders registered in the Shareholders Department of Endesa Américas at DCV Registros Register at midnight of the fifth working day previous to S.A. offices, located in Huérfanos 770, 22nd floor, the payment date. Santiago, Monday to Thursday from 9:00 am to 5:00 pm, and Friday from 9:00 am to 4:00 pm. > On April 28, 2016, in accordance with articles 9 and 10, paragraph 2, under Securities Market Law N° > On April 26, 2016, in accordance with articles articles 9 18,045 and as established under General Rule N°30 and 10, paragraph 2, under the Securities Market Law Nº of the Superintendence, it was informed the following 18,045, and as established under General Norm N° 30 of significant event: at the Board of Directors meeting the Superintendence, informed the following significant of Endesa Américas held on April 27, 2016, the Board event regarding the announcement that as of today the of Directors agreed to appoint Mr. Rafael Fauquié as Securities and Exchange Commission of the United Chairman of the Board of Directors and of the Company, States of America declared the Registration Statement Mr. Vittorio Vagliasindi as the Vice Chairman and Mr. on Form F-6 effective, which was filed to register the Ignacio Quiñones as the Secretary of the Board. At the American Depositary Receipts program (“ADRs”) issued same meeting, it was agreed to appoint as members by the Company, and to register the Company as an of the Directors´ Committee the following: Mr. Hernán issuer of American Depositary Shares in accordance with Cheyre V., Eduardo Novoa C. and Mrs. María Loreto the aforementioned program. Therefore, the Company Silva R. Mr. Hernán Cheyre V. was appointed as the has carried out the physical distribution of ADRs. Committee’s Financial Expert. A copy of the Form F-6 and its annexes will be available > On May 6, 2016, in accordance with articles 9 and to the shareholders and general public beginning today 10, paragraph 2, under Securities Market Law N° on the Company’s website at www.endesaamericas.cl. 18,045 and as established under General Rule N°30 of the Superintendence, it was informed the following > On April 27, 2016, in accordance with articles 9 and 10, significant event: the Extraordinary session held today, paragraph 2, under Securities Market Law N° 18,045 the Board of Directors of Endesa Américas S.A. (“Endesa and as established under General Rule N°30 of the Américas”) agreed unanimously, the following issues: Superintendence, duly authorized on behalf of Endesa Américas S.A. (“Endesa Américas” or the “Company”), 1.- Formally begin the merger process in which Enersis the following significant event was informed. At the Américas S.A. (“Enersis Américas”) would absorb Endesa America´s Ordinary Shareholders Meeting Endesa Américas and Chilectra Américas S.A. (“OSM”) held today, the new Board of Directors of the (“Chilectra Américas”) by incorporation, dissolving Company was elected for a period of three years starting without liquidation, replacing all their rights and from the date of the meeting. The following are now the obligations in them (the “Merger”), according members of the Board of Directors: to the resolutions adopted at the Extraordinary > Rafael Fauquié Bernal > Maria Loreto Silva Rojas > Umberto Magrini > > Francesco Buresti Vittorio Vagllasindi > Mauro DiCario > Luca Noviello > Hernán Cheyre Valenzuela > Eduardo Novoa Castellón Shareholders’ Meeting of Empresa Nacional de Electricidad S.A. (“Endesa Chile”) held on December 18, 2015, and according to the terms of the Merger presented in the aforementioned meeting, particularly regarding to the following: (i) that the Merger is subject to compliance with the condition precedent in which the right of withdrawal that the shareholders of Enersis Américas, Endesa Américas and Chilectra Américas may potentially exercise as a result of the Merger, should not exceed 10%, 7.72% Likewise, the Ordinary Shareholders Meeting agreed and 0.91%, respectively, to the extent that the 211 right to withdrawal from Enersis Américas should to approve the Merger, as long as before such not cause any shareholder to exceed 65% of share meeting takes place there were no Significant Events ownership of Enersis Américas after the Merger that occur before the Shareholders’ Meeting that is carried out, (ii) that, pursuant to the agreement affect substantially the referred exchange ratios and adopted on November 24, 2015 by the Board of on the other side that (b) if the Merger is approved, Directors of Enersis Américas, it was agreed to it is Enel’s intention as controlling shareholder, in a propose a share ratio of 2.8 of Enersis Américas period of no less than five years from the date the shares for each Endesa Américas share and 5 meeting that approves the Merger takes place, not Enersis Américas shares for each Chilectra Américas to perform or propose any other process to make share to the Board of Directors (iii) that, pursuant any other corporate reorganization process that to the agreement adopted on November 24, 2015, affects Enersis Américas other than the one exposed augmented by the agreement adopted on December in the aforementioned Extraordinary Shareholders’ 17, 2015, the Board of Directors of Enersis Américas Meeting. also announced its intention to submit a tender offer for the acquisition of shares (“OPA,” in its Spanish 2.- Declare that the Directors Messrs. Rafael Fauquié acronym) related to all American Depositary Receipts Bernal, Vittorio Vagliasindi, Francesco Buresti, (“ADRs”) issued by Endesa Américas which are not Umberto Magrini, Luca Noviello, Mauro Di Carlo and owned by Enersis Américas at a price of 285 Chilean Mrs. Loreto Silva Rojas have been appointed in a pesos per share and that the OPA would be subject decisive vote from the controlling shareholder of the to the approval of the Merger at the Extraordinary Company, have declared to have an interest in the Shareholders’ Meetings of Enersis Américas, Endesa Merger under the terms contained in Article 147 of Américas and Chilectra Américas, and after the legal the Chilean Companies Act Law N°18,046 (“LSA”), period to exercise the right to withdrawal from and with regards to the Sentence of the Court of Enersis Américas and Endesa Américas has expired Appeals of Santiago on March 22, 2016. and the right to withdrawal has not been exercised above a certain number or percentage of shares as 3.- Appoint Mr. Colin Becker as independent expert relevant; and the remaining terms and conditions appraiser of the Company, who will release a that will be promptly detailed on time to submit the report regarding the value of the companies of the offer, (iv) also, in compliance with the agreement Merger and the corresponding exchange relation, in of November 24, 2015 the Chief Executive Officer compliance with the terms contained on Articles 156 (“CEO”) was instructed to, strictly and exclusively, and 168 of LSA. under the assumption that the Merger agreements were not adopted before December 31, 2017, to 4.- Appoint Banco Santander Chile S.A. as the financial negotiate in good faith with Endesa Chile the terms advisor of the Board of Directors of Endesa Américas of a compensation commitment, whereby the tax with regards to the Merger, which will release a report costs of Endesa Chile that were due to its division in the terms contained on Article 147 of the LSA. and duly authorized, and deduct the benefits or tax credits that Endesa Américas or Endesa Chile may For its part, the Directors’ Committee of Endesa obtain after the division, from those tax benefits Américas, in a extraordinary session held after the that Enersis Américas may obtain as a result of the Board of Directors’ Meeting of the Company today, merger, (v) the controlling shareholder Enel S.p.A. unanimously appointed “Asesorías Tyndall Limitada as (“Enel”), through two letters dated November 25 additional independent evaluator to help in the Merger and December 17, 2015 said that, (a) it took into operation of Enersis Américas. account that the exchange ratio announced for the > On August 5, 2016, in accordance with articles 9 and Merger would be suitable for the interests of all the 10, paragraph 2, under Securities Market Law N°18,045, shareholders and of the companies involved in the and as established under General Norm N°30 of the reorganization, in a manner that would vote in the Superintendence, duly authorized on behalf of Endesa corresponding Extraordinary Shareholders’ Meeting Américas S.A. (“Endesa Américas” or the “Company”), 212 Enel Américas Annual Report 2016 it was informed of the significant event: essential fact basis, that in an extraordinary session held today, the Board of Directors of Endesa Américas S.A. In connection with the related party-transaction of the (“Endesa Américas” or the “Company”), by a majority statutory merger of Endesa Américas S.A. and Chilectra of its members, agreed to summon an Extraordinary Américas S.A. into Enersis Américas S.A. (The “Merger”), Shareholders’ Meeting on September 28, 2016, at 15:30, the Board of Directors of the Company has received and to be held at Enersis Stadium, located at Carlos Medina immediately made the following background documents N° 858, Independencia, Santiago. public: 1. The report issued by the financial advisor Banco Extraordinary Shareholders’ Meeting are the following: Santander Chile S.A., which refers to Merger’s conditions, effects and potential impacts to the I. Related-party transactions (OPR, by its Spanish The matters to be discussed and decided by the Company; acronym). First of all, pursuant to the terms of Title XVI of the Chilean Companies Act, Law No. 18,046 2. The report of Asesorías Tyndall Limitada, the (“LSA”, by its Spanish acronym), approve the related- independent evaluator appointed by the Board of party transaction (“OPR”) consisting of the proposed Directors dated August 5, 2016; merger by absorption of Endesa Américas S.A. (“Endesa Américas”) and Chilectra Américas S.A. 3. The Fairness Opinion of Deutsche Bank, the financial (“Chilectra Américas”), into Enersis Américas S.A. advisor appointed by the Board of Endesa Américas (the “Merger”), referred to in item II below, taking into to advise on the merger process, dated August 5. account the following background data that serve as 4. The report of Mr. Colin Becker, the independent expert at the Company’s corporate address and website, foundation, and which are available to the shareholders appraiser appointed by the Board of the Company, www.endesaamericas.cl: including the estimated value of the entities to be merged and the corresponding estimated exchange (i) Report issued by the independent valuator ratios; appointed by the Board of Directors, Banco Santander Chile S.A., submitted on August 5, 5. The report of the Directors´ Committee of the 2016; Company, dated August 5, 2016; and 6. The individual opinions of the Company’s Directors, appointed by the Directors’ Committee, Asesorías Messrs. Rafael Fauquié B., Vittorio Vagliasindi, Tyndall Limitada, submitted on August 5, 2016; Hernán Cheyre V., Eduardo Novoa C., Loreto Silva R., Francesco Buresti, Mauro Di Carlo, Umberto Magrini (iii) Fairness opinion issued on August 5, 2016 by (ii) Report issued by the independent valuator and Luca Noviello. Deutsche Bank, the financial advisor appointed by the Endesa Américas Board of Directors, to Therefore, in compliance with Article 147 of the 18,046 advise on the merger process. Corporations Law, the reports and opinions referenced above are available to the general public and shareholders (iv) Report issued by the Company’s Directors’ on the Company’s website (www.endesaamericas.cl) Committee, issued on August 5, 2016; and and at the Company’s offices at Santa Rosa No. 76, 15th floor, Santiago. (v) Individual opinions of the Company Directors, Rafael Fauquié Bernal, Vittorio Vagliasindi, Hernán > On August 5, 2016, pursuant to the provisions of articles Cheyre Valenzuela, Eduardo Novoa Castellón, 9 and 10, paragraph two, of Securities Market Law No. Loreto Silva Rojas, Francesco Buresti, Mauro Di 18,045, and to the provisions of General Norm No. Carlo, Umberto Magrini and Luca Noviello, all 30 of that Superintendence, it was informed, on an dated August 5, 2016. 213 (vi) The document comprising the terms and Chilectra Américas, respectively. conditions of the proposed merger prepared in accordance with Article 155(a) of the Chilean 2. The Merger would be subject to the following Companies Regulations, and that also contains conditions precedent (the “Conditions the objectives and expected benefits of the Precedent”): Merger. (i) The right to withdraw that may be exercised II. Merger. Once item I above has been approved, by the shareholders of Enersis Américas as pursuant to the terms of Title IX of the LSA, and of a result of the Merger may not exceed 10% paragraph 3 of Title IX of the Chilean Companies of its outstanding voting shares; provided Regulations, approve (i) the proposed Merger by that the exercise by the shareholders of virtue of which Enersis Américas, in its capacity as Enersis Américas of the right to withdraw the surviving company, would absorb by acquisition does not result in any shareholder exceeding each of Endesa Américas and Chilectra Américas, the maximum shareholding concentration each of which would then dissolve without the limit of 65% in Enersis Américas on the date need for their liquidation, succeeding them in all the exercise period of the right to withdraw their rights and obligations; and (ii) the background by dissenting shareholders is due to expire, information that serves as foundation for the Merger. considering for that purpose the number of The specific terms and conditions of the Merger will shares into which the new Enersis Américas be the following: capital stock approved according to item 4 1. The background information that serves as foundation for the Merger, according to the (ii) The right to withdraw that may be exercised applicable law, made available to the shareholders by the shareholders of Endesa Américas as a as of today’s date and through the date the result of the Merger may not exceed 10% of Extraordinary Shareholders’ Meeting is held, its outstanding voting shares; and below is divided; consists of: (iii) The right to withdraw that may be exercised (I) The document containing the terms and by the shareholders of Chilectra Américas as conditions of the proposed Merger, drawn up a result of the Merger may not exceed 0.91% in accordance with Article 155(a) of the Chilean of its outstanding voting shares. Companies Regulations, and which also contains the objectives and expected benefits of the Within sixty days of the date of the respective Merger; shareholders’ meetings to vote on the Merger, the shareholders of each of the (ii) The balance sheets and financial statements merging companies may agree at a new of Enersis Américas, Endesa Américas and shareholders’ meeting that the Merger shall Chilectra Américas as of June 30, 2016, duly become effective even if one or more of the audited by the external audit firms Ernst Conditions Precedent should not be satisfied & Young, KPMG Auditores Consultores (the “Special Agreement”). Limitada, and RSM Chile Auditores Limitada, respectively; and 3. Once the Conditions Precedent have been satisfied or the Special Agreement has been (iii) The expert reports prepared by Messrs. Pablo adopted, the representatives appointed by D´Agliano, Colin Becker and Emilio Venegas the Boards of Directors of Enersis Américas, Valenzuela, all issued on August 5, 2016, and Endesa Américas, and Chilectra Américas commissioned by the Boards of Directors shall grant a single declaratory public deed, of Enersis Américas, Endesa Américas and notifying about the compliance with said 214 Enel Américas Annual Report 2016 Precedent Conditions. Said public deed shall of the increase of the shareholding capital be titled “Deed of Compliance with Merger of Enersis Américas associated with the Conditions.” incorporation of the equity corresponding to the shareholders of the absorbed companies The Merger shall be effective as of the first shall be subscribed and paid, excluding Pre- day of the calendar month following the Merger Shares held by Enersis Américas. The month in which the aforementioned Deed shares from the capital increase shall be fully of Compliance with Merger Conditions is and exclusively allocated to the distribution granted. The foregoing is without prejudice among the shareholders of Endesa Américas to timely compliance with the registration and Chilectra Américas, excluding Enersis in the corresponding Commercial Registry Américas, pursuant to the allocation rule, and publication in the Official Gazette of which is described in number 10 below, in the the extracts of the respective public deed corresponding proportions according to the recordings, either prior to or after granting the share exchange ratio as agreed. Deed of Compliance with Merger Conditions. Once the Merger has become effective, it 5. An exchange equation or ratio of 2.8 shares will be timely informed to the SVS and to the of Enersis Américas for each share of Endesa market as an essential fact. Américas and 4 shares of Enersis Américas for each share of Chilectra Américas will be 4. The Enersis Américas capital shall increase by proposed without considering fractions of the amount of Ch $1,046,470,167,544, through shares. the issuance of 9,232,202,625 new registered shares, of the same series and without par 6. The name of the Company shall be changed to value, which will be subscribed and paid in Enel Américas S.A. and it will be clarified that it is full or in part through the incorporation of a publicly traded company. the equity corresponding to the shareholders of the companies that are being absorbed, 7. The corporate purpose of Enersis Américas shall excluding for the purposes of this subscription be changed in order to allow related companies and payment, the shareholding capital which and associates of Enersis Américas as Enersis Américas owns both in Endesa potential recipients of its services, and a formal Américas and Chilectra Américas, either by amendment of the text shall be drafted to that shares it currently owns in those companies effect. (“Current Shares”) as well as those shares issued by Endesa Américas to be acquired 8. An amended and restated text of Enersis prior to the date on which the Merger takes Américas’ bylaws. place, as a result of the tender offer (Spanish acronym- OPA) of the shares which will be 9. For the purposes of the provisions of article 69 carried out by Enersis Américas and directed of the Tax Code, Enersis Américas, in its capacity at all the shares and American Depositary as the surviving company and legal successor Receipts (ADRs) of Endesa Américas of Endesa Américas and Chilectra Américas, which are not owned by Enersis Américas, shall be liable and shall be required to pay all under the terms and conditions that will be the taxes owed or that may be owed by Endesa disclosed at the time of commencement of Américas and Chilectra Américas, according to the OPA (hereinafter, shares thus acquired the final balance sheets that Endesa Américas shall be referred to as the “OPA shares”, and Chilectra Américas must prepare by virtue of and together with the existing shares, they the aforementioned legal provision. shall be called the “Pre–Merger Shares”). When the Merger take place, only the part 10. The Board of Directors of Enersis Américas 215 shall allocate the new shares and update its For these purposes, and via an agreement that shareholder ledger at midnight of the day prior to is subsequent to and separate from the Merger, the date on which the Merger becomes effective, a capital decrease of Enersis Américas shall be considering for this purpose the shareholders proposed, subject to the Merger taking place, registered in the shareholder ledgers of Endesa for the amount up to the amount incurred by Américas and Chilectra Américas on that date, any company to acquire repurchased shares, and any duly executed conveyances, transfers, in accordance with the price to be paid for the and transmissions of shares that may have been exercise of the withdrawal right in each company, submitted to Endesa Américas and Chilectra which will be reported at the shareholders Américas prior to the Merger and that may not meeting. The maximum amount that this capital yet have been finalized and recorded in the reduction could reach shall be informed at the corresponding shareholder ledger. meeting to be convened based on a previously designated formula. This capital decrease shall Any shares in the acquired companies owned be subject to the following terms and conditions: by Enersis Américas shall be excluded from this assignment, and will be cancelled once the (a) In the first place, the effect of not transferring Merger becomes effective. repurchased shares shall be agreed upon. 11. Agree on any other matters that the shareholders (b) The reduction of capital shall occur automatically, may deem appropriate with respect to the immediately, and without further formalities: (i) proposed Merger, and fully authorize the board with regards to all the shares issued by Enersis of directors of Enersis Américas to grant all the Américas that are repurchased by Enersis powers of attorney that it may deem necessary, Américas prior to the Merger their, cancellation especially those necessary to legalize, will occur immediately and automatically materialize, and carry out the Merger and any once the company has paid for and acquired other agreements adopted. ownership and (ii) with regard to all shares issued by a subsidiary that are repurchased by It is noted that the dissenting shareholders the subsidiary prior to the time the Merger takes of the merger will be entitled to exercise their place, their cancellation shall occur immediately withdrawal rights in accordance with the and automatically upon the effectiveness of the provisions of Article 69 of the LSA. The terms Merger; and (iii) with regard to all the repurchased and conditions for the exercise of the withdrawal shares that Enersis Américas pays for and right shall be informed promptly, in accordance acquires after the effectiveness of the Merger with the current law and regulations. and until 1st of April, 2017, their cancellation shall take place immediately and automatically once it III. Cancellation of repurchased shares. In order that has paid for and acquired their ownership. the absorbing company should not be a holder of any repurchased shares at the time of the (c) The Board of Directors or the Chief Executive Merger, it will be proposed to the shareholders Officer of Enersis Américas shall grant a of the merging companies to approve that, if declaratory public deed recording of whether the withdrawal right is exercised by up to the any reductions of capital took place and, if so, of maximum percentage agreed as a condition Enersis Américas’ new capital amount, within the precedent to the Merger, the repurchased shares following timeframes: (i) within ten days following which are acquired as a result of the above by the date the Merger becomes effective, and (ii) Enersis Américas, Endesa Américas and/or within ten days after April 1, 2017. Each of those Chilectra Américas (hereinafter these shares public deeds shall be annotated in the margin of shall be known as “repurchased shares”) will be Enersis Américas’ corporate registration. cancelled on the shareholders register. 216 Enel Américas Annual Report 2016 IV. Information about other related-party stock market business day prior to the date of the transactions. Report to shareholders about any meeting that prompts the withdrawal; It is possible agreements on other related-party transactions to establish from such date the price to be paid to within the meaning of Title XVI of the LSA, other each dissenting shareholder who decides to exercise than the Merger, held during the period since the their withdrawal rights on the occasion of the last shareholders’ meeting of Endesa Américas, agreements adopted at the Company’s Extraordinary indicating the directors that approved them. Shareholders’ Meeting to be held on September 28, The shareholders may obtain a full copy of the 2016. documents that explain and support the matters As established above, the price to be paid to each submitted for the discussion and approval of shareholder that is registered in the shareholders’ the Board at the corporate office located in register of Endesa Américas five days prior to the Santa Rosa 76, 15th Floor (Investor Relations aforementioned meeting that decides to exercise Department), Santiago de Chile, beginning today. their withdrawal rights will be Ch$ 299.64 per share. Likewise, beginning today, said documents will also be available to the shareholders in the 2. Furthermore, and once the call is made for the Company’s website: www.endesaamericas.cl. Extraordinary Shareholders’ Meeting of Endesa Américas to decide on the issue of the merger Finally, we hereby inform that also available in with Enersis Américas S.A. (Enersis Américas) and the respective websites of Enersis Américas Chilectra Américas S.A. (Chilectra Américas), as (www.enersis.cl) and Chilectra Américas (www. stated in the Significant Event issued on August chilectraamericas.cl), are the reports of the 5, 2016, the Company has considered relevant, for independent appraisers and experts required greater transparency of the process, and due to the by said entities, as well as all other background importance of this transaction, to restate selected information that may serve as basis to decide information that affects the process according to on the OPR and Merger that will be submitted applicable United States regulations, as follows: for consideration to the shareholders of such entities. As indicated in the application made to the Superintendence of Securities and Insurance (“SVS”) > On August 16, 2016, in accordance with articles by Enersis Américas on May 23, 2016, in submissions 9 and 10, paragraph 2, under Securities Market made to the same entity by Endesa Américas on Law N°18,045, and as established under General May 31, 2016, and by Enersis Américas and Chilectra Norm N°30 of the Superintendence, duly Américas, on June 1, 2016 , all applications and public authorized on behalf of Endesa Américas S.A. submissions and the ones informed by the SVS in its (“Endesa Américas” or the “Company”), it was response by means of Ordinary Official Letter No. informed of the following significant event: 16,030 dated July 1, 2016, the referred companies have asked the SVS to extend the period of validity 1. In accordance with article 69 of the Chilean of the financial statements that will be used in the Companies Act Law N°18,046 and article 132 of merger pursuant to provisions of the applicable the Chilean Companies Regulations, approved by regulation. Decree No. 702, issued in 2011 by the Ministry of Finance, which establishes that the market value Pursuant to the rules of the Securities Exchange of the shares that must be paid to shareholders Commission of the United States of America (“SEC”) exercising their withdrawal rights in corporations applicable to the operation of the proposed merger, with stock market participation, corresponds to the the information statement or final prospectus weighted average of the stock transactions of the must be sent to the holders of the ADR and to share during the period of 60 stock market business the shareholders residing in the United States of days that fall between the thirtieth and the ninetieth America at least 20 days prior to the Extraordinary 217 Shareholders’ Meeting which will decide on the the date and matters discussed at the extraordinary merger and which is expected to take place on shareholders’ meeting held on August 5, 2016 as September 28, 2016. Said prospectus and information detailed in a significant event of the same date. As statement are contained in Form F-4 (“Form F-4” or such, the Extraordinary Shareholders’ Meeting will “F-4”), which must be declared effective by the SEC be held on September 28, 2016, at 14:00, in Enersis’ before the information statement or prospectus can Stadium, located at Carlos Medina N° 858, Santiago. be distributed. Enersis Américas currently expects that the F-4 will be declared effective soon so that The matters to be discussed and voted on at the the distribution of the information statement or Extraordinary Shareholders’ Meeting are as follows: prospectus will take place with sufficient time before the Extraordinary Shareholders’ Meeting in order to I. Related-party transactions (OPR, by its Spanish comply with applicable SEC regulations. However, it acronym). First of all, pursuant to the terms of Title cannot be guaranteed that the F-4 will be declared XVI of the Chilean Companies Act, Law No. 18,046 effective according to the aforementioned deadlines. (“LSA”, by its Spanish acronym), approve the related- Should the SEC not declare the effectiveness of the merger by absorption of Endesa Américas S.A. Form F-4 in time, or should it not grant another type (“Endesa Américas”) and Chilectra Américas S.A. of regulatory waiver, the Extraordinary Shareholders’ (“Chilectra Américas”), into Enersis Américas S.A. Meeting scheduled for September 28, 2016 will be (the “Merger”), referred to in item II below, taking party transaction (“OPR”) consisting of the proposed postponed to a later date. into account the following background data that serve as foundation, and which are available to the In such an event, and pursuant to what has been shareholders at the Company’s corporate address stated above, Endesa Américas will have to prepare and website, www.endesaamericas.cl: new, audited financial statements according to Chilean regulations - given the expiration date of the (i) Report issued by the independent valuator ones prepared before considering the Meeting to be appointed by the Board of Directors, Banco held on September 28, 2016. Furthermore, the Form Santander Chile S.A., submitted on August 5, F-4 will need to be modified and updated, and the 2016; SEC will review the modified Form F-4 so that it may declare its effectiveness. (ii) Report issued by the independent valuator appointed by the Directors’ Committee, Asesorías The above indicated statements do not materially Tyndall Limitada, submitted on August 5, 2016; affect the execution and completion of the corporate reorganization that is currently underway by Enersis (iii) Fairness opinion issued on August 5, 2016 by Américas and its subsidiaries, Endesa Américas Deutsche Bank, the financial advisor appointed and Chilectra Américas and, in the event that the by the Endesa Américas Board of Directors, to indicated operation were to be delayed, it will not advise on the merger process; affect its completion. (iv) Report issued by the Company’s Directors’ Committee, issued on August 5, 2016; and; On August 31, 2016, pursuant to the provisions of articles 9 and 10, paragraph two, of Securities Mar- (v) Individual opinions of the Company Directors, ket Law No. 18,045, and to the provisions of General Rafael Fauquié Bernal, Vittorio Vagliasindi, Hernán Norm No. 30 of that Superintendence, and exercis- Cheyre Valenzuela, Eduardo Novoa Castellón, ing the powers conferred upon me, it was informed, Loreto Silva Rojas, Francesco Buresti, Mauro Di on an essential fact basis, that in an extraordinary Carlo, Umberto Magrini and Luca Noviello, all session held today, the Board of Directors of Endesa dated August 5, 2016. Américas S.A. (“Endesa Américas” or the “Compa- ny”), by a majority of its members, agreed to modify (vi) The document comprising the terms and 218 Enel Américas Annual Report 2016 conditions of the proposed merger prepared in 2. The Merger would be subject to the following accordance with Article 155(a) of the Chilean conditions precedent (the “Conditions Companies Regulations, and that also contains Precedent”): the objectives and expected benefits of the Merger; (A)(i) The right to withdraw that may be exercised by the shareholders of Enersis Américas as II. Merger. Once item I above has been approved, a result of the Merger may not exceed 10% pursuant to the terms of Title IX of the LSA, and of of its outstanding voting shares; provided paragraph 3 of Title IX of the Chilean Companies that the exercise by the shareholders of Regulations, approve (i) the proposed Merger by Enersis Américas of the right to withdraw virtue of which Enersis Américas, in its capacity as does not result in any shareholder exceeding the surviving company, would absorb by acquisition the maximum shareholding concentration each of Endesa Américas and Chilectra Américas, limit of 65% in Enersis Américas on the date each of which would then dissolve without the the exercise period of the right to withdraw need for their liquidation, succeeding them in all by dissenting shareholders is due to expire, their rights and obligations; and (ii) the background considering for that purpose the number of information that serves as foundation for the Merger. shares into which the new Enersis Américas The specific terms and conditions of the Merger will capital stock approved according to item 4 be the following: below is divided; (ii) the right to withdraw that may be exercised by the shareholders of 1. The background information that serves as Endesa Américas as a result of the Merger foundation for the Merger, according to the may not exceed 10% of its outstanding voting applicable law, made available to the shareholders shares; or (iii) the right to withdraw that may as of today’s date and through the date the be exercised by the shareholders of Chilectra Extraordinary Shareholders’ Meeting is held, Américas as a result of the Merger may consists of: not exceed 0.91% of its outstanding voting shares; and (i) The document containing the terms and conditions of the proposed Merger, drawn (B) If one or more of the events described in up in accordance with Article 155(a) of the numerals (i), (ii) or (iii) above occurs within Chilean Companies Regulations, and which the 60 days of the date of the respective also contains the objectives and expected shareholders’ meetings to vote on the benefits of the Merger; merger, the shareholders of each of the merging companies may agree at a new (ii) The balance sheets and financial statements shareholders’ meeting that the merger will of Enersis Américas, Endesa Américas and take effect notwithstanding these effects. Chilectra Américas as of June 30, 2016, duly audited by the external audit firms Ernst 3. Once the Conditions Precedent have been & Young, KPMG Auditores Consultores satisfied, the representatives appointed by Limitada, and RSM Chile Auditores Limitada, the Boards of Directors of Enersis Américas, respectively; and Endesa Américas, and Chilectra Américas shall grant a single declaratory public deed, (iii) The expert reports prepared by Messrs. Pablo notifying about the compliance with said D´Agliano, Colin Becker and Emilio Venegas Conditions Precedent. Said public deed shall Valenzuela, all issued on August 5, 2016, and be titled “Deed of Compliance with Merger commissioned by the Boards of Directors Conditions.” of Enersis Américas, Endesa Américas and Chilectra Américas, respectively. The Merger shall be effective as of the first day of the calendar month following the 219 month in which the aforementioned Deed owed or that may be owed by Endesa Américas of Compliance with Merger Conditions is and Chilectra Américas, according to the final granted. The foregoing is without prejudice financial statements that Endesa Américas and to timely compliance with the registration Chilectra Américas must prepare by virtue of the in the corresponding Commercial Registry aforementioned legal provision. and publication in the Official Gazette of the extracts of the respective public deed 8. The Board of Directors of Enersis Américas recordings, either prior to or after granting the shall allocate the new shares and update its Deed of Compliance with Merger Conditions. shareholder ledger at midnight of the day prior to Once the Merger has become effective, it the date on which the Merger becomes effective, will be timely informed to the SVS and to the considering for this purpose the shareholders market as an essential fact. registered in the shareholder ledgers of Endesa Américas and Chilectra Américas on that date, 4. An increase of the authorized capital and any duly executed conveyances, transfers, of Enersis Américas by the amount Ch and transmissions of shares that may have been $1,046,470,167,544, through the issuance submitted to Endesa Américas and Chilectra of 9,232,202,636 new registered shares Américas prior to the Merger and that may not of the same series and without par value, yet have been finalized and recorded in the which will be subscribed and paid, in whole corresponding shareholder ledger. or part, using the incorporated equity of the shareholders of the absorbed companies, The Current Shares are excluded from this excluding for purposes of this subscription designation as they are left ineffective as a result and capital payment, the shareholding capital of the merger. Enersis Américas owns in each of Endesa Américas and Chilectra Américas through 9. Agree on any other matters that the shareholders shares it currently owns in the companies may deem appropriate with respect to the (“Current Shares”). proposed Merger, and fully authorize the board of directors of Enersis Américas to grant all the 5. An exchange ratio of 2.8 shares of Enersis powers of attorney that it may deem necessary, Américas for each share of Endesa Américas especially those necessary to legalize, and 4 shares of Enersis Américas for each materialize, and carry out the Merger and any share of Chilectra Américas will be proposed other agreements adopted. without considering fractions of shares. It is noted that the dissenting shareholders 6. A consolidated text of the bylaws of Enersis of the merger will be entitled to exercise their Américas, which will include, in addition to withdrawal rights in accordance with the modifications to the social capital, other social provisions of Article 69 of the LSA. The terms modifications approved by the shareholders of and conditions for the exercise of the withdrawal Enersis Américas, including a modification to the right shall be informed promptly, in accordance name and corporate purpose of the company, with the current law and regulations. as well as the elimination of transitional arrangements that would have expired. III. Information about other related-party transactions. Report to shareholders about any 7. For the purposes of the provisions of Article 69 agreements on other related-party transactions of the Tax Code, Enersis Américas, in its capacity within the meaning of Title XVI of the LSA, other as the surviving company and legal successor of than the Merger, held during the period since the Endesa Américas and Chilectra Américas, shall last shareholders’ meeting of Endesa Américas, be liable and shall be required to pay all the taxes indicating the directors that approved them. 220 Enel Américas Annual Report 2016 The shareholders may obtain a full copy of the case, the information statement/prospectus that documents that explain and support the matters is part of the Form F-4 will be made available submitted for the discussion and approval of the to shareholders and holders of ADSs to inform Board at the corporate office located in Santa Rosa them about matters to be voted on at the 76, 15th Floor (Investor Relations Department), upcoming extraordinary shareholders’ meetings Santiago de Chile, beginning today. Likewise, of Enersis Américas S.A. and Endesa Américas beginning today, said documents will also be to be held on September 28, 2016, and about the available to the shareholders in the Company’s shares and ADSs of Enersis Américas S.A. that website: www.endesaamericas.cl. Finally, we will be offered in exchange to holders of Endesa hereby inform that also available in the respective Américas shares and ADSs in the merger. websites of Enersis Américas (www.enersis.cl) and Chilectra Américas (www.chilectraamericas. Additionally, and in accordance with the provisions cl), are the reports of the independent appraisers of General Norm No. 30 of that Superintendence, and experts required by said entities, as well we inform you that the aforementioned declaration as all other background information that may of effectiveness of the Form F-4 allows Endesa serve as basis to decide on the OPR and Merger Américas to confirm that the event described that will be submitted for consideration to the in the Significant Event of the Company dated shareholders of such entities. August 16, 2016, consisting of the possibility that the next Extraordinary Shareholders’ Meeting to Lastly, in accordance with applicable law, a be held on September 28 would be postponed notice of meeting will be published and a letter as a result of not obtaining a timely declaration of to shareholders containing information relating to effectiveness can no longer occur. the meeting will be mailed to shareholders on or before September 13, 2016. Finally, we inform shareholders and the market in general that a complete copy of the information > On September 8, 2016, Pursuant to the provisions statement/prospectus referred to above, is of article 9 and paragraph two of article 10, of available, as of this date, on the Company’s Securities Market Law No. 18,045, and to the website: www.enersis.cl. established provisions of General Norm No. 30 of that Superintendence, duly empowered on behalf > In accordance with articles 9 and 10, paragraph of Endesa Américas S.A. (“Endesa Américas” 2, under Securities Market Law N°18,045, and or the “Company”), the following Significant as established under General Norm N°30 of the Event was informed, as has already been Superintendence, duly authorized on behalf of communicated by Enersis Américas S.A., that Endesa Américas S.A. (“Endesa Américas”, the today the Securities and Exchange Commission “Company,” or the “Society”) it was informed (“SEC”) of the United States of Americas has of the following Significant Event regarding the declared the validity or “effectiveness” of the tender offer for the acquisition of shares that Registration Statement on Form F-4 (“Form F-4”), Enersis Américas S.A. has presented in relation filed by Enersis Américas S.A. with said authority, to all the shares issued by Endesa Américas in accordance with the Securities Act of 1933, to (“OPA,” in its Spanish acronym) and the tender register the issuance of shares and American offer in relation to all the American Depositary Depositary Shares (“ADS”) by Enersis Américas Shares of Endesa Américas and all the shares of as a result of the capital increase, which will be the Company whose holders are residents of the the objective in the event the merger with its United States I inform you the following: associates Endesa Américas S.A. and Chilectra Américas is approved. Today, pursuant to Article 207 letter c) of Securities Market Law N°18,045, the Company Under the United States rules applicable to the has received the individual reports of Company’s 221 Directors, Rafael Fauquié B., Vittorio Vagliasindi, (A)(i) The withdrawal rights that may be exercised by the Hernán Cheyre V., Eduardo Novoa C., Loreto Silva statutory merger dissenting shareholders of Endesa R., Francesco Buresti, Mauro Di Carlo, Umberto Américas as a result of the Merger may not exceed Magrini and Luca Noviello. 10% of its outstanding voting shares; provided that the exercise by the shareholders of Endesa Américas of Also, in accordance with Article 207 letter c), I the withdrawal right does not result in any shareholder hereby communicate that the aforementioned exceeding the maximum shareholding concentration reports and the Prospectus of the OPA have limit of 65% in Endesa Américas on the date the exercise been made available to the general public and period of the withdrawal right by the statutory merger shareholders on the Company’s website (www. dissenting shareholders is due to expire, considering for endesaamericas.cl) and at its corporate offices that purpose the number of shares into which the new located in Santa Rosa 76, 15th floor, Santiago. Enersis Américas capital stock approved by the Board will be divided; (ii) that the withdrawal right that may > On September 28, 2016, In accordance with articles be exercised by the shareholders of Endesa Américas 9 and 10, paragraph 2, under Securities Market Law as a result of the Merger may not exceed 10% of its N°18,045, and as established under General Norm N°30 outstanding voting shares; or (iii) that the withdrawal of the Superintendence of Securities and Insurance right that may be exercised by the shareholders of (“SVS”), and exercising the powers conferred upon Chilectra Américas as a result of the Merger may not me, it was informed this Significant Event, that today, exceed 0.91% of its outstanding voting shares; and the Extraordinary Shareholders’ Meeting of Endesa Américas S.A. (“Endesa Américas” or the “Company”) (B) If one or more of the events described in numbers (i), (ii) resolved, complying with the quorum required by law or (iii) of letter A above should occur within 60 days of the and the Company’s by-laws, the following: date of the respective shareholders’ meetings to favorably vote on the Merger, the shareholders’ meetings of each 1. Approve, pursuant to the terms of Title XVI of the of the merging companies have agreed at a subsequent Chilean Companies Act No. 18,046 (“LSA,” in its shareholders’ meeting that the effects, deriving from any Spanish acronym), the related-party transaction (“OPR,” one of these facts and having been agreed, should not be in its Spanish acronym) that consists of the proposed applicable therefore, that the Merger shall become effective. statutory Merger of Endesa Américas and Chilectra Américas S.A. (“Chilectra Américas”), into Enersis Should the Conditions Precedent be met, a single declaratory Américas S.A. (“Enersis Américas”) (the “Merger”). public deed shall be issued notifying of the compliance with said Conditions Precedent. Said public deed shall be titled 2. Approve, pursuant to the terms of Title IX of the LSA, “Deed of Compliance with the Merger Conditions.” and of paragraph 3 of Title IX of the Chilean Companies Regulations, the proposed Merger by virtue of which The Merger shall be effective as of the first day of the calendar Enersis Américas, in its capacity as the surviving month following the month in which the aforementioned company, would absorb by acquisition the subsidiaries Deed of Compliance with the Merger Conditions is granted Endesa Américas and Chilectra Américas, each of which and once the Merger has become effective, it will be would then dissolve without the need for their liquidation, informed in a timely manner to the SVS, to other relevant succeeding them in all their rights and obligations; and entities and to the market as a Significant Event. the specific terms and conditions of the Merger and the background information that serves as the foundation of The shareholders’ meeting has approved the exchange ratio the Merger. of 2.8 shares of Enersis Américas for each share of Endesa Américas and 4 shares of Enersis Américas for each share of The Merger was subject to the compliance of the Chilectra Américas, without considering fractions of shares. following conditions precedent (the “Conditions Precedent”): The Merger will entail a capital increase of Enersis Américas by the amount of Ch$ 1,046,470,167,544, through 222 Enel Américas Annual Report 2016 the issuance of 9,232,202,625 new registered shares articles 9 and 10, paragraph two, of Securities Market Law of the same series and without par value, which will be No. 18,045, and to the provisions of General Norm No. subscribed and fully paid using the incorporated equity of 30 of the Superintendence, and exercising the powers the shareholders of the absorbed companies, excluding conferred upon me and on behalf of Endesa Américas S.A. for purposes of this subscription and capital payment, the (“Endesa Américas” or the “Company”), and in relation shareholding capital Enersis Américas currently owns in to the fulfillment of the conditions precedent to which Endesa Américas and Chilectra Américas. At the same time, the merger by absorption of the Company and Chilectra the following articles of bylaws will be modified under the Américas S.A. into Enersis Américas S.A. (the “Merger”) following terms: was subject, as agreed to at the Extraordinary Shareholders’ Meeting held on September 28, 2016, it was informed the (i) Amendment of Article One, informing that the new Significant Event regarding following the conclusion of the name of the Company will be Enel Américas S.A., period for dissenting shareholders of the Merger to exercise clarifying that it is a publicly traded company. their statutory merger dissenters’ withdrawal rights in the Company, it was determined that the exercise of statutory (ii) Amendment of Permanent Article Four, in order to merger dissenters’ withdrawal rights in Endesa Américas insert in the first paragraph a comma (,) between did not exceed 10% of the outstanding voting shares of expressions “foreign” and “the exploration” and said company, thereby fulfilling the condition regarding the replace in letter d) the terms “associate companies” maximum limit for exercises of statutory merger dissenters’ with “related, subsidiaries and associate companies” withdrawal rights in Endesa Américas. (iii) Amendment of Article Five, informing of the capital > On November 15, 2016, pursuant to the provisions of increase of Enersis Américas’ resulting from the articles 9 and 10, paragraph two, of Securities Market Law Merger, and the issuance of newly registered shares No. 18,045, and to the provisions of General Norm No. 30 of of a single series and without par value; the Superintendence, duly authorized on behalf of Endesa (iv) Rescind all of the bylaws’ transitional provisions due was informed of the Significant Event, that as of today and to loss of their validity, and add a new Transitory as resolved at the Extraordinary Shareholders’ Meeting of Article One related to the status of the subscription Endesa Américas on September 28, 2016, the Company has and the payment of the capital stock after the Merger, signed in conjunction with Enersis Américas S.A. (“Enersis Américas S.A. (“Endesa Américas” or the “Company”), it and Américas”) and Chilectra Américas S.A. (“Chilectra Américas”), the Deed of Compliance with Merger (v) Issue a new, re-written text of the Enersis Américas Conditions, which affirms the verification of the conditions bylaws. precedent to which the merger of Endesa Américas with the aforementioned companies (the “Merger”) was subject. It is hereby established Record that the Extraordinary Shareholders’ Meetings of Enersis Américas and In accordance with the resolutions of the Extraordinary Chilectra Américas also held today, voted favorably on Shareholders’ Meetings of Endesa Américas, Enersis both the OPR and the Merger, pursuant to the quorums Américas and Chilectra Américas, all on September 28, required by law and the bylaws of their respective 2016, the Merger will be effective as of the first calendar companies. day of the month following the month in which the Deed of Compliance with Merger Conditions referred to in this Finally, I herby inform you that, notwithstanding what Significant Event is granted and, therefore, the Merger will shall be communicated in due time, and pursuant to be effective on December 1, 2016. terms established by law and existing regulations, the statutory merger dissenting shareholders have the On that date, the entire equity of Endesa Américas and withdrawal right pursuant to the existing legislation. Chilectra Américas will be incorporated into Enersis Américas, the latter occurring within all its rights and > On October 29, 2016, pursuant to the provisions of obligations with the respect to the former, each of which 223 would then dissolve without the need for their liquidation. Additionally, it is reported that, as of December 1, 2016, the absorbing company will change its current corporate name, Enersis Américas S.A., to Enel Américas S.A. Chilectra Américas > On March 24, 2016, the Significant Event was informed > On November 23, 2016, pursuant to the provisions of to the Superintendence of Securities and Insurance articles 9 and 10, paragraph two, of Securities Market Law as of January 29, 2016, that pursuant to the matters No. 18,045, and to the provisions of General Norm No. approved at the Extraordinary Shareholders’ Meeting 30 of the Superintendence, it was informed the following held on December 18, 2015, where the Spin-Off of Significant Event of Endesa Américas S.A. (“Endesa Chilectra S.A. was approved, shall become effective on Américas” or the “Company”): March 1, 2016, a date as of which the new company > Endesa Américas will be absorbed by Enersis Américas and its respective shares at the Seurities Register of the Chilectra Américas S.A. began to exist, the registration S.A. on December 1, 2016. Superintendence. On the other hand, the distribution and delivery of information related to the shares issued > The foregoing will result in the Endesa Américas’ dividend by Chilectra Américas S.A. will be carried out as of policy scheduled for 2016 not being implemented, since, the date defined by the Board of Directors, once the by the dates scheduled for its realization (interim dividend registration is completed. payable in January 2017 and final dividend payable no earlier than April 2017), Endesa Américas will have > On April 14, 2016, the following Significant Event was dissolved and been succeeded by Enersis Américas. informed: > As a result of the merger, Endesa Américas - On April 13, 2016, the Superintendence of Securities shareholders will receive shares of Enersis Américas and Insurance proceeded to record Chilectra S.A., of which they should consider in their future Américas and its shares in the Securities Registry, investment decisions the continuous investment thus the shares resulting from the division of the information submitted to the market by the absorbing share capital of Chilectra Américas S.A. should be company, which includes, but is not limited to, its distributed free of any payment to the shareholdersof dividend policy. Chilectra S.A. entitled to receive them. - The Board of Directors of Chilectra Américas agreed to carry out the distribution and deliver information in relation to a total of 1,150,742,161 shares issued by Chilectra Américas S.A., all nominative, of a unique and single series and without nominal value, on April 21, 2016 to the shareholders of Chilectra S.A. - This shares distribution will be carried out by delivering one share of Chilectra Américas for each share of Chilectra S.A. that will be registered under its name in the registry. As such, from April 21, 2016 onwards, the shares issued by Chilectra Américas S.A., may be officially quoted in the stock markets aforementioned. - - Representative titles of the shares in Chilectra Américas S.A., will be available for shareholders of 224 Enel Américas Annual Report 2016 Chilectra S.A., to be withdrawn on April 21, 2016 at external expert of the Company to issue the DCV Registros S.A. offices. a report related to the valuation of the merging companies and the exchange > On April 27, 2016, the appointment of the following ratio associated, as required by the members of the Board was informed: Corporations Law. Chairman of the Board: Gianluca Caccialupi Vice Chairman of the Board Francesca Romana Napolitana Director Monica Hodor Director - Appoint BBVA Asesorías Financieras S.A. as independent appraiser of Chilectra Américas in the Merger operation to issue a report in the terms of Article 147 of the Corporations Law. Iris Boeninger von Kretschmann > On May 31, 2016, it was informed at the Ordinary Director board of Directors’ Session, it was agreed unanimously yo Hernan Felipe Errázuriz Correa. revoke the independent expert appointment conferred upon Mr. Mario Torres Santibáñez, agreed at the Extraordinary Ø In April, 2016 the Superintendence was informed, Session of the Board held on May 6, and to appoint Mr. pursuant to Form N°1, the information related to the Emilio Venegas Valenzuela instead. As such, the new expert final dividend N°31, whose distribution and payment must issue a report regarding the merging companies and has been agreed by the Ordinary Shareholders’ in compliance with provisions of articles 156 and 168 of Meeting held on April 27, 2016. Regulations of the Chilean Companies Act Law N°18,046. Ø On May 6, 2016 the Extraordinary Session of the > On August 05, 2016, the SVS was informed of the Board of Directors agreed the following: related-party transactions of the merger by incorporation - Formally begin the Merger process Enersis Américas S.A. (the “Merger”), and as of this same in which Enersis Américas would date the Company has received the following information: of Endesa Américas S.A. and Chilectra Américas S.A. in absorb Endesa Américas S.A. (“Endesa Américas”) and Chilectra Américas S.A. 1. Report issued by the independent appraiser BBVA (“Chilectra Américas”) by incorporation, Asesorías Financieras S.A., with regards to the which would then dissolve without conditions of the Merger, its effects and its potential liquidation, replacing them in all their impact for the Comoany; and rights and obligations (the “Merger”). 2. Individual opinions of the Directors of he Company, - Communicate that the Directors of Gianluca Caccialupi, Iris Boeninger von Kretschmann, Chilectra Américas S.A., as they have Hernán Felipe Errázuriz Correa, Francesca Romana been elected with the votes of the Napolitano and Mónica Hodor. contolling shareholder of the company, have declared to be interested in the > On August 05, 2016, at the Extraordinary Board of meger in the terms exposed on Article Directors’ Session the following matters were informed: 147 of the Corporations Law. I. Approval of the financial statements and the - Communicate that the General Manager distribution of profits. The balance sheet and other of the company has declared not to be financial statements approval as of June 30, 2016, affected by conflicts of interest in relation audited by the externa audit company RSM Chile to the merger. Auditores Limitada; as well as the distribution of a dividend of $120,000,000,000, to be charged against - Appoint Don Mario Torres Santibáñez as retained earnings. 225 I. Operation on the related-party transactions for their liquidation, succeeding them in all their (OPR). Approve, pursuant to the terms of rights and obligations; and (ii) the background Title XVI of Law N° 18,046 or Corporations information that serves as foundation for the Law (“LSA”), the operation with related Merger. The specific terms and conditions of party (“OPR”) consisting on the merger by the Merger will be the following: incorporation proposal of Endesa Américas S.A. (“Endesa Américas”) and Chilectra Américas, 1. The background information that serves as in Enersis Américas S.A. (“Enersis Américas” foundation for the Merger, according to the and the operation as the “Merger”), mentioned applicable legislation, was made available to the in the following item III, and taking into account shareholders today, including: the following information as the foundation and which is available for the shareholders at the (i) The document containing the terms and address of the company and at the web site of conditions of the proposed Merger, drawn up Chilectra Américas www.chilectraamericas.cl: in accordance with Article 155(a) of the Chilean Companies Regulations, and which also contains The final, independent evaluation on the related-party the objectives and expected benefits of the transaction that is part of the Merger, issued by Banco Merger; Itaú, the independent reviewer appointed by the Board of Directors, within the framework of the Corporate (ii) The balance sheets and financial Reorganization; (i) Report issued by the independiente appraiser appointed by the Board, BBVA Asesorías Financieras S.A., issued on August 5, 2016; statements of Enersis Américas, Endesa Américas and Chilectra Américas as of June 30, 2016, duly audited by the external audit firms Ernst & Young, KPMG Auditores Consultores Limitada, and RSM Chile (ii) Individual opinions of the Directors of Auditores Limitada, respectively; and Chilectra Américas Mesrrs. Iris Boeninger von Kretschmann, Hernán Felipe Errázuriz Correa, (iii) The expert reports prepared by Messrs. Francesca Romana Napolitano, Mónica Hodor, and Gianluca Caccialupi, all dated August 5, 2016; and (iii) The report containing the terms and conditions Pablo D´Agliano, Colin Becker and Emilio Venegas Valenzuela, all issued on August 5, 2016, and commissioned by the Boards of Directors of Enersis Américas, Endesa Américas and of the proposed Merger, prepared in compliance Chilectra Américas, respectively. with the terms of Article 155 letter (a) of the Corporations Law, which also includes the 2. The Merger would be subject to the following expected objectives and benefits of the Merger. conditions precedent (the “Conditions I. Merger. Once the OPR has been approved, Precedent”): pursuant to the terms exposed on item II (i) The right to withdraw that may be exercised above, and in the terms of Title IX of the LSA, by the shareholders of Enersis Américas as and of paragraph 3 of Title IX of the Chilean a result of the Merger may not exceed 10% Companies Regulations, approve (i) the of its outstanding voting shares; provided proposed Merger by virtue of which Enersis that the exercise by the shareholders of Américas, in its capacity as the surviving Enersis Américas of the right to withdraw company, would absorb by acquisition each of does not result in any shareholder exceeding Endesa Américas and Chilectra Américas, each the maximum shareholding concentration of which would then dissolve without the need limit of 65% in Enersis Américas on the date 226 Enel Américas Annual Report 2016 the exercise period of the right to withdraw an essential fact. by dissenting shareholders is due to expire, considering for that purpose the number of 4. An increase in the authorized capital of Enersis shares into which the new Enersis Américas Américas by the amount Ch $1,046,470,167,544, capital stock approved according to item 4 through the issuance of 9,232,202,636 new below is divided; registered shares of the same series and without par value, which will be subscribed and paid, in (ii) The right to withdraw that may be exercised whole or part, using the incorporated equity of by the shareholders of Endesa Américas as a the shareholders of the absorbed companies, result of the Merger may not exceed 10% of excluding for purposes of this subscription and its outstanding voting shares; and capital payment, the shareholding capital Enersis Américas owns in each of Endesa Américas and (iii) The right to withdraw that may be exercised Chilectra Américas through shares it currently by the shareholders of Chilectra Américas as owns in the companies (“Current Shares”) a result of the Merger may not exceed 0.91% and those shares issued by Endesa Américas of its outstanding voting shares. acquired before the Merger takes place, as a consequence of the public offer for the shares If one or more of the events described above acquisition to be carried out by Enersis Américas occurs within the 60 days of the date of the and covering all of the shares and American respective shareholders’ meetings to vote on the Depositary Receipts (ADRs) of Endesa Américas Merger, the shareholders of each of the merging not owned by Enersis Américas, in the terms and companies may agree at a new shareholders’ conditions to be promptly detailed when such meeting that the merger will take effect offer is submitted (hereafter, the shares acquired notwithstanding these effects, nonetheless will be denomintated “OPA Shares”, and jointly one of these Conditions Precedent exist (the with the Current Shares, will be denominated “Special Agreement”). “Pre Merger Shares”). When the Merger takes place, the only share capital increase of Enersis 3. Once the Conditions Precedent have been Américas to be subscribed and paid related to the satisfied, the representatives appointed by the equity incorporation of the absorbed companies’ Boards of Directors of Enersis Américas, Endesa shareholders, excluding the shareholder Enersis Américas, and Chilectra Américas shall grant a Américas in relation to its Pre Merger Shares. single declaratory public deed, notifying about the The capital increase shares will be entirely and compliance with said Conditions Precedent. Said exclusively distributed among the shareholders public deed shall be titled “Deed of Compliance of Endesa Américas and Chilectra Américas, with Merger Conditions.” and excluding the shareholder Enersis Américas, pursuant to the assignation rule described on The Merger shall be effective as of the first day item 8 below, in the proportion related to the of the calendar month following the month in exchange rate to be defined defined in the which the aforementioned Deed of Compliance Merger process. with Merger Conditions is granted. The foregoing is without prejudice to timely compliance with 5. An exchange ratio of 2.8 shares of Enersis the registration in the corresponding Commercial Américas for each share of Endesa Américas Registry and publication in the Official Gazette and 4 shares of Enersis Américas for each share of the extracts of the respective public deed of Chilectra Américas will be proposed without recordings, either prior to or after granting the considering fractions of shares. Deed of Compliance with Merger Conditions. Once the Merger has become effective, it will be 6. A consolidated text of Enersis Américas’ bylaws timely informed to the SVS and to the market as will be provided, which will include, in addition to 227 the modifications to the share capital, ther social proposed Merger, and fully authorize the board modificatinos to be approved by the shareholders of directors of Enersis Américas to grant all the of Enersis Américas, including the modification powers of attorney that it may deem necessary, to the name and social purpose of such company, especially those necessary to legalize, as well as the así como la eliminación de materialize, and carry out the Merger and any disposiciones transitorias que hubieren perdido other agreements adopted. su vigencia. IV. Cancellation of repurchased shares. In order that 7. The corporate purpose of Enersis Américas shall the absorbing company should not be a holder of be changed in order to allow related companies any repurchased shares at the time of the Merger, it and associates of Enersis Américas as will be proposed to the shareholders of the merging potential recipients of its services, and a formal companies to approve that, if the withdrawal right amendment of the text shall be drafted to that is exercised by up to the maximum percentage effect. agreed as a condition precedent to the Merger, the repurchased shares which are acquired as a result For the purposes of Article 69 of the Tax Code, of the above by Enersis Américas, Endesa Américas Enersis Américas, in its capacity of continuing and/or Chilectra Américas (hereinafter these shares company and legal successor of Endesa Américas shall be known as “repurchased shares”) will be and Chilectra Américas, will be constituted as cancelled on the shareholders register. severally liable and will be obliged to pay every tax that Endesa Américas and Chilectra Américas For these purposes, and via an agreement that may owe, according to the closing balance that is subsequent to and separate from the Merger, Endesa Américas and Chilectra Américas must a capital decrease of Enersis Américas shall be prepare in relation to the aforementioned legal proposed, subject to the Merger taking place, for the provision. amount up to the amount incurred by any company to acquire repurchased shares, in accordance with 8. The Board of Directors of Enersis Américas the price to be paid for the exercise of the withdrawal shall allocate the new shares and update its right in each company, which will be reported at the shareholder ledger at midnight of the day prior to shareholders meeting. The maximum amount that the date on which the Merger becomes effective, this capital reduction could reach shall be informed considering for this purpose the shareholders at the meeting to be convened based on a previously registered in the shareholder ledgers of Endesa designated formula. This capital decrease shall be Américas and Chilectra Américas on that date, subject to the following terms and conditions: and any duly executed conveyances, transfers, and transmissions of shares that may have been i. In the first place, the effect of not submitted to Endesa Américas and Chilectra transferring Repurchased Shares shall be Américas prior to the Merger and that may not agreed upon. yet have been finalized and recorded in the corresponding shareholder ledger. ii. The reduction of capital shall occur The Current Shares of Enersis Américas in the further formalities: (i) with regards to all absorbed companies, hereto the Pre Merger the shares issued by Enersis Américas Shares, will be excluded from this designation that are repurchased by Enersis Américas as they are left ineffective as a result of the prior to the Merger their, cancellation will automatically, immediately, and without Merger. occur immediately and automatically once the company has paid for and acquired 9. Agree on any other matters that the shareholders ownership and (ii) with regard to all shares may deem appropriate with respect to the issued by a subsidiary that are repurchased 228 Enel Américas Annual Report 2016 by the subsidiary prior to the time the August 5, the company has seen as relevant, for a Merger takes place, their cancellation better transparency of the process and in relation shall occur immediately and automatically to its uniqueness, to reaffirm that some information upon the effectiveness of the Merger; might impact the process pursuant to the US and (iii) with regard to all the repurchased regulation, in the following sense: shares that Enersis Américas pays for and acquires after the effectiveness of the Furthermore, and once the call is made for the Merger and until 1st of April, 2017, their Extraordinary Shareholders’ Meeting of Enersis cancellation shall take place immediately Américas to decide regarding the merger with and automatically once it has paid for and Endesa Américas S.A. and Chilectra Américas S.A., acquired their ownership. as shown in the Significant Event issued on August 5, 2016, the Company has considered the following iii. The Board of Directors or the Chief relevant for greater transparency of the process, Executive Officer of Enersis Américas shall and due to the importance of this transaction, to grant a declaratory public deed recording restate selected information that affects the process of whether any reductions of capital took according to applicable United States regulations, as place and, if so, of Enersis Américas’ follows: new capital amount, within the following timeframes: (i) within ten days following the As indicated in the application made by Enersis date the Merger becomes effective, and (ii) Américas to the Superintendence of Securities and within ten days after April 1, 2017. Each of Insurance on May 23, 2016, and in submissions those public deeds shall be annotated in made by the same entity regarding Endesa Américas the margin of Enersis Américas’ corporate on May 31, 2016, and with regard to Chilectra registration. Américas and Enersis Américas S.A., on June 1, 2016, all applications and public submissions and the V. Information about other related-party transactions. ones informed to the Superintendence of Securities Report to shareholders about any agreements on and Insurance in its response by means of Ordinary other related-party transactions within the meaning Official Letter No. 16,030 dated July 1, 2016, referred of Title XVI of the LSA, other than the Merger, to companies asked to the Superintendence held during the period since the last shareholders’ to extend the period of validity of the financial meeting of Endesa Américas, indicating the directors statements that will be used in the merger, pursuant that approved them. to provisions of the applicable regulation. It was noted that dissenter shareholders of the In fact, Under the rules of the U.S. Securities Merger would have withdrawal rights, in accordance Exchange Commission (the “SEC”) that are with Article 69 de la LSA. The terms and conditions for applicable to the proposed merger transaction, such period will be promptly informed, in accordance a final information statement or final prospectus with the existing regulation. must be sent to ADR holders and US resident shareholders 20 days in advance of the extraordinary On August 16, 2016, the Extraordinary Shareholders’ meeting of shareholders scheduled for September Meeting advised that the final price for withdrawal 28, 2016. The information statement and prospectus rights will be informed in due time. is contained in a Registration Statement on Form F-4 (the “Form F-4”) that must be declared effective Additionally and with regards to the attendance to by the SEC before the final information statement/ the Extraordinary Shareholders’ Meeting of Chilectra propsectus may be disseminated. Enersis Américas Américas to vote in relation to its merger with currently expects that the Form F-4 will be declared Enersis Américas S.A and Endesa Américas S.A., effective in time to disseminate the final information in accordance with the significant event issued on statement/prospectus sufficiently in advance of the 229 extraordinary shareholder meeting to comply with taking into account the following background data applicable SEC rules. However, there can be no that serves as its foundation, and which are available assurance that the Form F-4 will be declared effective to the shareholders at the Company’s corporate in accordance with the expected timetable. address and on its website www.chilectraamericas. If the SEC does not declare the Form F-4 effective in cl: time, or does not grant other relief, the extraordinary (i) Report of the independiente appraiser appointed shareholders meeting may not be held on September by the Board of Directors, BBVA Asesorías 28, 2016 as scheduled and must be postponed to a Financieras S.A., issued on August 5, 2016; later date. If that’s the case and according to what was Chilectra Américas Messrs. Iris Boeninger von bentioned above, Chilectra Américas must prepare Kretschmann, Hernán Felipe Errázuriz Correa, new Financial Statements and prepare an audit Francesca Romana Napolitano, Mónica Hodor, pursuant to the Chilean regulation – due to the and Gianluca Caccialupi, dated August 5, 2016; (ii) Individual opinions of the Directors of expiration of those prepared previously for the and Extraordinary Shareholders’ Meeting to take place on September 28. Additionally, the Form F-4 should (iii) The document comprising the terms and be modified and updated and the SEC must review conditions of the proposed merger prepared in the modified Form F-4 for the declaration of its accordance with Article 155(a) of the Chilean effectiveness. Companies Regulations, which contains the objectives and expected benefits of the merger. The aforementioned do not materially affect the execution and completion of the corporate III. Merger. Once the OPR has been approved, reorganization that is currently underway by Enersis pursuant to the terms exposed on item II above, Américas and its subsidiaries Endesa Américas and and in the terms of Title IX of the LSA, and of Chilectra Américas, and if the operation is delayed, it paragraph 3 of Title IX of the Chilean Companies will not affect its success. Regulations, approve (i) the proposed Merger by virtue of which Enersis Américas, in its > On August 31, 2016, the Board of Directors agreed to capacity as the surviving company, would absorb modify the matters to be acknowledged and decided at by acquisition each of Endesa Américas and the Extraordinary Shareholders Meeting, as follows: Chilectra Américas, each of which would then dissolve without the need for their liquidation, I. Approval of the financial statements and profits succeeding them in all their rights and obligations; distribution. The approval of the balance sheet and and (ii) the background information that serves as the other financial statements as of June 30, 2016, foundation for the Merger. The specific terms and audited by the external audit company RSM Chile conditions of the Merger will be the following: Auditores Limitada; and also the dividend distribution of $120,000,000,000, to be charged agains retained 1. The background information that serves as earnings. foundation for the Merger, according to the applicable legislation, was made available to the II. Related-party transactions (“OPR”). Pursuant to the shareholders today, including: terms of Title XVI of the Chilean Companies Act, Law No. 18,046 (“LSA”,), to approve the OPR, which (i) The document containing the terms and consists of the proposed statutory merger of Endesa conditions of the proposed Merger, drawn up Américas S.A. (“Endesa Américas”) and Chilectra in accordance with Article 155(a) of the Chilean Américas S.A. (“Chilectra Américas”), into Enersis Companies Regulations, and which also contains Américas (the “Merger”), referred to in item II below, the objectives and expected benefits of the 230 Enel Américas Annual Report 2016 Merger; Merger, the shareholders’ meetings of each of the merging companies have agreed at a subsequent (ii) The balance sheets and financial statements shareholders’ meeting that the effects, deriving of Enersis Américas, Endesa Américas and from any one of these facts and having been Chilectra Américas as of June 30, 2016, duly agreed, should not be applicable therefore, that audited by the external audit firms Ernst & Young, the Merger shall become effective. KPMG Auditores Consultores Limitada, and RSM Chile Auditores Limitada, respectively; and 3. Once the Conditions Precedent have been satisfied, the representatives appointed by the (iii) The expert reports prepared by Messrs. Pablo Boards of Directors of Enersis Américas, Endesa D´Agliano, Colin Becker and Emilio Venegas Américas, and Chilectra Américas shall grant a Valenzuela, all issued on August 5, 2016, and single declaratory public deed, notifying about the commissioned by the Boards of Directors of compliance with said Conditions Precedent. Said Enersis Américas, Endesa Américas and Chilectra public deed shall be titled “Deed of Compliance Américas, respectively. with Merger Conditions.” 2. The Merger was subject to the compliance of the The Merger shall be effective as of the first day following conditions precedent (the “Conditions of the calendar month following the month in Precedent”): which the aforementioned Deed of Compliance with Merger Conditions is granted. The foregoing (A) (i) The withdrawal rights that may be exercised by is without prejudice to timely compliance with the statutory merger dissenting shareholders of the registration in the corresponding Commercial Endesa Américas as a result of the Merger may Registry and publication in the Official Gazette not exceed 10% of its outstanding voting shares; of the extracts of the respective public deed provided that the exercise by the shareholders recordings, either prior to or after granting the of Endesa Américas of the withdrawal right Deed of Compliance with Merger Conditions. does not result in any shareholder exceeding Once the Merger has become effective, it will be the maximum shareholding concentration limit timely informed to the SVS and to the market as of 65% in Endesa Américas on the date the an essential fact. exercise period of the withdrawal right by the statutory merger dissenting shareholders is 4. An increase in the authorized capital of Enersis due to expire, considering for that purpose the Américas by the amount Ch $1,046,470,167,544, number of shares into which the new Enersis through the issuance of 9,232,202,636 new Américas capital stock approved by the Board registered shares of the same series and without will be divided; (ii) that the withdrawal right par value, which will be subscribed and paid, in that may be exercised by the shareholders of whole or part, using the incorporated equity of Chilectra Américas as a result of the Merger the shareholders of the absorbed companies, may not exceed 10% of its outstanding voting excluding for purposes of this subscription and shares; or (iii) that the withdrawal right that may capital payment, the shareholding capital Enersis be exercised by the shareholders of Chilectra Américas owns in each of Endesa Américas and Américas as a result of the Merger may not Chilectra Américas through shares it currently exceed 0.91% of its outstanding voting shares; owns in the companies (“Current Shares”). and (B) If one or more of the events described in Américas for each share of Endesa Américas numbers (i), (ii) or (iii) of letter A above should and 4 shares of Enersis Américas for each share occur within 60 days of the date of the respective of Chilectra Américas will be proposed without shareholders’ meetings to favorably vote on the considering fractions of shares. 5. An exchange ratio of 2.8 shares of Enersis 231 6. The name of the Company shall be changed to last shareholders’ meeting of Chilectra Américas, Enel Américas S.A. and it will be clarified that it is indicating the directors that approved them. a publicly traded company. 7. The corporate purpose of Enersis Américas shall of the Merger will have withdrawal rights, pursuant be changed in order to allow related companies to Article 69 of the LSA. The terms and conditions to and associates of Enersis Américas as exercise those rights will be informed in due course, potential recipients of its services, and a formal in accordance with the law and current legislation. It is hereby noted that the dissentive shareholders amendment of the text shall be drafted to that effect. > On September 1, 2016, the Significant Event that contained the letter of the General Manager 33/ 2016 of 8. The following articles of Enersis Américas’ August 31, was re-entried and replaced by the following: bylaws will be modified, for the sole purpose unanimously agreed, among other issues, to modify the of increasing the capital stock and changing its time and matters to be discussed at the Extraordinary name, as indicated in numbers 4, 6 and 7 above: Shareholders’ Meeting convened by the Board of Directors on August 5, 2016, informed as Significant (i) Amendment of Article One, informing that the Event as of the same date. Thus, the Extraordinary new name of the Company will be Enel Américas Shareholders’ Meeting to be held on September 28, S.A., clarifying that it is a publicly traded company; 2016, at 14:00 hours, at the Chilectra Auditorium, located (ii) Amendment of Permanent Article Fourth, in pursuant to the applicable law, the first appointment order to insert in the first paragraph a comma notice for the Meeting will be published and the letter to (,) between expressions “foreign” and “the shareholders with the information related to the meeting exploration” and replace in letter d) the will be sent to shareholders at the latest on September in Santa Rosa N° 76, Santiago. It was informed that, terms “associate companies” with “related, 13, 2016 subsidiaries and associate companies” The Board of Directors agreed to modify the following (iii) Amendment of Article Five, informing of the sujects: increase of Enersis Américas’ capital resulting from the Merger, and the issuance of newly I. Approval of the financial statements and the registered shares of a single series and without distribution of profits. The extrernal audit company par value; and RSM Chile Auditores Limitada audited the approval of the balance sheet and the other financial (iv) Rescind all of the bylaws’ transitional provisions statements as of June 30, 2016; and the distribution due to loss of validity, and add a new Transitional of an eventual dividend of $120,000,000,000, to be Article One related to the status of the charged to retained earnings. subscription and payment of the capital stock after the Merger. II. Related-party transactions (“OPR”). Pursuant to the terms of Title XVI of the Chilean Companies Act, 9. A consolidated text of Enersis Américas’ bylaws, Law No. 18,046 (“LSA”,), to approve the OPR, which which will include the amendments indicated in consists of the proposed statutory merger of Endesa number 8 above, will be granted. Américas S.A. (“Endesa Américas”) and Chilectra Américas S.A. (“Chilectra Américas”), to Enersis IV. Information about other related-party Américas (the “Merger”), referred to in item III transactions. Report to shareholders about any below, taking into account the following background agreements on other related-party transactions data that serves as its foundation, and which are within the meaning of Title XVI of the LSA, other available to the shareholders at the Company’s than the Merger, held during the period since the corporate address and on the web site of Chilectra 232 Enel Américas Annual Report 2016 Américas www.chilectraamericas.cl: audited by the external audit firms Ernst & Young, KPMG Auditores Consultores (i) Report of the independent appraiser appointed Limitada, and RSM Chile Auditores Limitada, by the Board, BBVA Asesorías Financieras S.A., respectively; and issued on August 5, 2016; (iii) The expert reports prepared by Messrs. Pablo (ii) Individual Opinions of the Directors of D´Agliano, Colin Becker and Emilio Venegas Chilectra Américas Messrs. Iris Boeninger von Valenzuela, all issued on August 5, 2016, and Kretschmann, Hernán Felipe Errázuriz Correa, commissioned by the Boards of Directors Francesca Romana Napolitano, Mónica Hodor, of Enersis Américas, Endesa Américas and and Gianluca Caccialupi, all dated August 5, 2016; Chilectra Américas, respectively. and (iii) Document containing the terms and conditions conditions precedent (the “Conditions 2. The Merger would be subject to the following of the proposed Merger, prepared according Precedent”): to the provisions of Article 155 letter (a) of the Corporations Law, containing the expected (A) (i) The right to withdraw that may be exercised objectives and benefits of the Merger. by the shareholders of Enersis Américas as a result of the Merger may not exceed 10% of III. Merger. Once item I above has been approved, its outstanding voting shares; provided that pursuant to the terms of Title IX of the LSA, and of the exercise by the shareholders of Enersis paragraph 3 of Title IX of the Chilean Companies Américas of the right to withdraw does not result Regulations, approve (i) the proposed Merger by in any shareholder exceeding the maximum virtue of which Enersis Américas, in its capacity as shareholding concentration limit of 65% in Enersis the surviving company, would absorb by acquisition Américas on the date the exercise period of the each of Endesa Américas and Chilectra Américas, right to withdraw by dissenting shareholders is each of which would then dissolve without the due to expire, considering for that purpose the need for their liquidation, succeeding them in all number of shares into which the new Enersis their rights and obligations; and (ii) the background Américas capital stock approved according to information that serves as foundation for the Merger. item 4 below is divided; (ii) the right to withdraw The specific terms and conditions of the Merger will that may be exercised by the shareholders of be the following: Endesa Américas as a result of the Merger may not exceed 10% of its outstanding voting 1. The background information that serves as shares; and (iii) the right to withdraw that may foundation for the Merger, according to the be exercised by the shareholders of Chilectra applicable legislation, was made available to the Américas as a result of the Merger may not shareholders today, including: exceed 0.91% of its outstanding voting shares; (i) The document containing the terms and and conditions of the proposed Merger, drawn up (B) If one or more of the events described in in accordance with Article 155(a) of the Chilean numerals (i), (ii) or (iii) above occurs within the 60 Companies Regulations, and which also contains days of the date of the respective shareholders’ the objectives and expected benefits of the meetings to vote on the merger, the shareholders Merger; of each of the merging companies may agree at a new shareholders’ meeting that the merger will (ii) The balance sheets and financial statements take effect notwithstanding these effects. of Enersis Américas, Endesa Américas and Chilectra Américas as of June 30, 2016, duly 3. Once the Conditions Precedent have been 233 satisfied, the representatives appointed by the arrangements that would have expired. Boards of Directors of Enersis Américas, Endesa Américas, and Chilectra Américas shall grant a 7. For the purposes of the provisions of Article 69 single declaratory public deed, notifying about the of the Tax Code, Enersis Américas, in its capacity compliance with said Conditions Precedent. Said as the surviving company and legal successor of public deed shall be titled “Deed of Compliance Endesa Américas and Chilectra Américas, shall with Merger Conditions.” be liable and shall be required to pay all the taxes owed or that may be owed by Endesa Américas The Merger shall be effective as of the first day and Chilectra Américas, according to the final of the calendar month following the month in financial statements that Endesa Américas and which the aforementioned Deed of Compliance Chilectra Américas must prepare by virtue of the with Merger Conditions is granted. The foregoing aforementioned legal provision. is without prejudice to timely compliance with the registration in the corresponding Commercial 8. The Board of Directors of Enersis Américas Registry and publication in the Official Gazette shall allocate the new shares and update its of the extracts of the respective public deed shareholder ledger at midnight of the day prior to recordings, either prior to or after granting the the date on which the Merger becomes effective, Deed of Compliance with Merger Conditions. considering for this purpose the shareholders Once the Merger has become effective, it will be registered in the shareholder ledgers of Endesa timely informed to the SVS and to the market as Américas and Chilectra Américas on that date, an essential fact. and any duly executed conveyances, transfers, and transmissions of shares that may have been 4. An increase in the authorized capital of Enersis submitted to Endesa Américas and Chilectra Américas by the amount Ch $1,046,470,167,544, Américas prior to the Merger and that may not through the issuance of 9,232,202,636 new yet have been finalized and recorded in the registered shares of the same series and without corresponding shareholder ledger. par value, which will be subscribed and paid, in whole or part, using the incorporated equity of The Current Shares are excluded from this the shareholders of the absorbed companies, designation as they are left ineffective as a result of excluding for purposes of this subscription and the merger. capital payment, the shareholding capital Enersis Américas owns in each of Endesa Américas and 9. Agree on any other matters that the shareholders Chilectra Américas through shares it currently may deem appropriate with respect to the proposed owns in the companies (“Current Shares”). Merger, and fully authorize the board of directors of Chilectra Américas to grant all the powers of 5. An exchange ratio of 2.8 shares of Enersis attorney that it may deem necessary, especially Américas for each share of Endesa Américas those necessary to legalize, materialize, and carry and 4 shares of Enersis Américas for each share out the Merger and any other agreements adopted. of Chilectra Américas will be proposed without considering fractions of shares. IV. Information about other related-party transactions. Report to shareholders about any agreements on 6. A consolidated text of the bylaws of Enersis other related-party transactions within the meaning Américas, which will include, in addition to of Title XVI of the LSA, other than the Merger, modifications to the social capital, other social held during the period since the last shareholders’ modifications approved by the shareholders of meeting of Endesa Américas, indicating the directors Enersis Américas, including a modification to the that approved them. name and corporate purpose of the company, as well as the elimination of transitional It has been recorded that dissentive shareholders of 234 Enel Américas Annual Report 2016 the Merger will have withdrawal rights, pursuant to statements as of June 30, 2016; and the distribution Article 69 of the LSA. The terms and conditions for of an eventual dividend of $120,000,000,000, to be the period of such withdrawal rights will be timely charged to retained earnings. informed, in accordance with the law and current regulation. The Meeting enabled the Board of Directors of Chilectra Américas to set the eventual dividend > On September 9, 2016, a Significant Event was payment date, to be informed through a press informed regarding that the Securities and Exchange publication pursuant to the Corporations Law Commission (“SEC”) of the United States of Americas N°18,046. has declared the validity or “effectiveness” of the Registration Statement on Form F-4 (“Form F-4”), filed II. Related-party transactions (“OPR”). Pursuant to the by Enersis Américas S.A. (“Enersis Américas” or the terms of Title XVI of the Chilean Companies Act, “Company”) with said authority, in accordance with the Law No. 18,046 (“LSA”,), to approve the OPR, which Securities Act of 1933, to record the issuance of American consists of the proposed statutory merger of Endesa Depositary Shares (“ADS”) by the Company as a result Américas S.A. (“Endesa Américas”) and Chilectra of the capital increase, which will be the objective in the Américas S.A. (“Chilectra Américas”), to Enersis event the merger with its associates Endesa Américas Américas (the “Merger”), referred to in item III S.A. and Chilectra Américas is approved. below, taking into account the following background data that serves as its foundation, and which are Under the United States rules applicable to the case, available to the shareholders at the Company’s the information statement/prospectus that is part of the corporate address and on the web site of Chilectra Form F-4, will be made available to shareholders and Américas www.chilectraamericas.cl. holders of ADSs to inform them about matters to be voted on at the upcoming extraordinary shareholders’ III. Merger. Once item I above has been approved, meetings of Enersis Américas and Endesa Américas to pursuant to the terms of Title IX of the LSA, and of be held on September 28, 2016 and information about paragraph 3 of Title IX of the Chilean Companies the shares and ADSs of Enersis Américas offered to Regulations, approve (i) the proposed Merger by holders of Endesa Américas shares and ADSs in the virtue of which Enersis Américas, in its capacity as merger. the surviving company, would absorb by acquisition each of Endesa Américas and Chilectra Américas, Additionally, and in accordance with the provisions each of which would then dissolve without the need of General Norm No. 30 of that Superintendence, we for their liquidation, succeeding them in all their rights inform you that the aforementioned declaration of and obligations; and (ii) the background information effectiveness of the Form F-4 allows Enersis Américas to that serves as foundation for the Merger, including confirm that the event described in the Significant Event the blance sheet and audit financial statements dated August 16, 2016, consisting of the possibility that of the companies that merged, the reports issued the next Extraordinary Shareholders’ Meeting to be held by experts and the consolidated bylaws of Enersis on September 28 would be postponed as a result of not Américas. obtaining a timely declaration of effectiveness can no longer occur. The Merger would be subject to the following conditions precedent (the “Conditions Precedent”): > On September 28, 2016, the following agreements were adopted at the Extraordinary Shareholders’ Meeting: (A)(i) The right to withdraw that may be exercised by I. Approval of the financial statements and the the Merger may not exceed 10% of its outstanding distribution of profits. The extrernal audit company voting shares; provided that the exercise by the RSM Chile Auditores Limitada audited the approval shareholders of Enersis Américas of the right of the balance sheet and the other financial to withdraw does not result in any shareholder the shareholders of Enersis Américas as a result of 235 exceeding the maximum shareholding concentration a modification to the name and corporate purpose of limit of 65% in Enersis Américas on the date the company, as well as the elimination of transitional the exercise period of the right to withdraw by arrangements that would have expired. dissenting shareholders is due to expire, considering for that purpose the number of shares into which It was informed that the Extraordinary Shareholders’ the new Enersis Américas capital stock approved Meetings of Endesa Américas, Enersis Américas according to item 4 below is divided; (ii) the right to and Chilectra Américas also held today, agreed to withdraw that may be exercised by the shareholders approve the OPR and the Merger, pursuant to the of Endesa Américas as a result of the Merger may quorums established by lay and the bylaws of their not exceed 10% of its outstanding voting shares; or respective companies. (iii) the right to withdraw that may be exercised by the shareholders of Chilectra Américas as a result of In accordance with the resolutions of the the Merger may not exceed 0.91% of its outstanding Extraordinary Shareholders’ Meetings of Endesa voting shares; and Américas, Enersis Américas and Chilectra Américas, all held on September 28, 2016, the Merger will be (B) If one or more of the events described in numerals effective as of the first calendar day of the month (i), (ii) or (iii) above occurs within the 60 days of following the month in which the Deed of Compliance the date of the respective shareholders’ meetings with Merger Conditions referred to in this Significant to vote on the merger, the shareholders of each Event is granted and, therefore, the Merger will be of the merging companies may agree at a new effective on December 1, 2016. shareholders’ meeting that the merger will take effect notwithstanding these effects. On that date, the entire equity of Endesa Américas Once the Conditions Precedent have been satisfied, Enersis Américas, the latter occurring within all its the representatives appointed by the Boards of rights and obligations with the respect to the former, Directors of Enersis Américas, Endesa Américas, and each of which would then dissolve without the need and Chilectra Américas will be incorporated into Chilectra Américas shall grant a single declaratory for their liquidation. public deed, notifying about the compliance with said Conditions Precedent. Said public deed shall be > On September 28 2016, the payment of the eventual titled “Deed of Compliance with Merger Conditions.” dividend N° 1 equivalent to $104.28053 per share was approved, whose payment date will be determined by The merger will take place from the first working the Board of Directors. day next to the month in which the aforementioned Merger Compliance Conditions Deed is granted. > On October 29, 2016, Pursuant to the provisions of Once the Merger is in place, a Significant Event will articles 9 and 10, paragraph two, of Securities Market be registered in the Superintendence of Securities Law No. 18,045, and to the provisions of General Norm and Insurance, and also to the other relevant entities. No. 30 of the Superintendence, and exercising the powers conferred upon me and on behalf of (“Enersis In the context of the merger, an exchange ratio of 2.8 Américas” or the “Company”), the following Significant shares of Enersis Américas for each share of Endesa Event was informed, regarding the conclusion of Américas and 4 shares of Enersis Américas for each the period for dissenting shareholders of the merger share of Chilectra Américas will be proposed without agreement (the “Merger”) of Enersis Américas and its considering fractions of shares. subsidiaries Endesa Américas S.A. (“Endesa Américas”) A consolidated text of the bylaws of Enersis Américas, adopted at the extraordinary shareholders’ meeting of which will include, in addition to modifications to the the Company held on September 28, 2016, to exercise social capital, other social modifications approved their statutory merger dissenters’ withdrawal rights in by the shareholders of Enersis Américas, including the Company, its been confirmed that the withdrawal and Chilectra Américas S.A. (“Chilectra Américas”), 236 Enel Américas Annual Report 2016 rights of Chilectra Américas didn’t exceed 0.91% of merger of Enersis Américas with the aforementioned the outstanding voting shares of the company, thus companies (the “Merger”) was subject. complying with the condition regarding the maximum limit of the percentage of withdrawal rights in Chilectra In accordance with the resolutions of the Extraordinary Américas. Shareholders’ Meetings of Enersis Américas, Endesa Américas and Chilectra Américas on September 28, > On November 3, 2016, Pursuant to the provisions of 2016, the Merger will be effective as of the first calendar articles 9 and 10, paragraph two, of Securities Market day of the month following the month in which the Deed Law No. 18,045, and to the provisions of General of Compliance with Merger Conditions referred to in this Norm No. 30 and Circular No. 660 of 1986, of the Significant Event is granted and, therefore, the Merger Superintendence, Chilectra Américas S.A. (“Chilectra will be effective on December 1, 2016. Américas”) informed by Significant Event, given that the merger by absorption of Chilectra Américas S.A. and Additionally, it is reported that, as of December 1, 2016, Endesa Américas S.A. into Enersis Américas, approved the absorbing company will change its current corporate a modification to its Dividend Policy approved in the name, Enersis Américas S.A., to Enel Américas S.A. Board of Directors’ Ordinary Session N° 2/2016 held on February 29, 2016, that approved the distribution of a Ø On November 28, 2016, Pursuant to the dividend equivalent to 100% of the net income of the provisions of Circular No. 660 of 1986, of the period, and a interim dividend to be paid in January 2017. Superintendence, Chilectra Américas informed the In this respect, the dividend policy has to be modified, register of Form N°1 with the information related to while it didn’t consider any interim dividend payment. the Eventual Dividend N° 1, whose distribution and > On November 3, 2016, pursuant to the provisions of Shareholders’ Meeting held on September 28, General Norm No. 30 and Circular No. 660, Chilectra 2016. This information complments the letters Américas sent two copies of Form N°1 with the General Manager N° 37/2016 and N° 44/2016 sent information related to the Eventual Dividend N° 1, to the SVS dated September 28 and November 4, payments has been agreed by the Extraordinary whose distribution and payment has been approved 2016, respectively. by the Extraordinary Shareholders’ Meeting held on September 28, 2016. This information complements the As such, as consequence of the withdrawal right letter to the General Manager N° 37/2016 sent to the exercise of 65,035 shares of Chilectra Américas, we SVS on September 28, 2016. Worth is to mention that hereby update the information related to the number the dividend payment date was agreed at the Board of of shares with dividend rights – item 3.01 of the Director’s Meeting of Chilectra Américas held today. Annex. Also, we update the dividend per share, from $104.28053 to $104.28642 – item 5.01 of the Annex-. > On November 15, 2016, Pursuant to the provisions of Finally, the individualization of movement 1 to 2 – item articles 9 and 10, paragraph two, of Securities Market 1.07 of the Annex is also modified. Law No. 18,045, and to the provisions of General Norm No. 30 and Circular No. 660 of 1986, of the Superintendence, Chilectra Américas S..A (“Chilectra Américas”) informed by Significant Event, t h e following Significant Event was informed, held today and as resolved at the Extraordinary Shareholders’ Meeting of Enersis Américas on September 28, 2016, the Company has signed in conjunction with its subsidiaries Endesa Américas S.A. (“Endesa Américas”) and Chilectra Américas S.A. (“Chilectra Américas”), the Deed of Compliance with Merger Conditions, which affirms the verification of the conditions precedent to which the 237  Identification of Subsidiaries and Associates Companies 239 240 Enel Américas Annual Report 2016 AMPLA ENERGÍA (Ampla Energía E Serviços S.A.) Company Name Ampla Energia e Serviços S.A. Type of Company Publicly Traded Company Address Praça Leoni Ramos, N° 01, São Domingos, Niteroi Río de Janeiro, Brazil Phone (55 21) 2613 7000 Subscribed and paid-in capital (Th$) 266,777,806 Corporate purpose Study, plan, project, build and explore electricity production, transmission, transformation, distribution and sale systems, and provide related services that have been or may be conceded; carry out research in the energy sector, participate in regional, national or international organizations dedicated to the planning, operation, technical Exchange and business development related to the electricity industry and participate as a shareholder in other companies in the energy sector, even within the framework of Brazil´s privatization program. Core business Electricity distribution. Board of Directors Mario Fernando de Melo Santos (Chairman) Monica Hodor (Vice Chairman) Carlo Federico Vladimir Il’ic Zorzoli José Távora Batista José Alves de Mello Franco Aurélio Ricardo Bustilho de Oliveira Luiz Carlos Franco Campos Senior Management Abel Alves Rochinha (General Manager) Aurelio Ricardo Bustilho de Oliveira Carlos Ewandro Naegele Moreira José Nunes de Almeida Neto Janaina Savino Vilella Carro José Alves Mello Franco Déborah Meirelles Rosa Brasil Margot Frota Cohn Pires Ramón Francisco Castañeda Ponce Márcia Sandra Roque Vieira Silva Business Relations The company has no commercial relations with Enel Américas S.A. Enel Américas S.A. Shareholding (Direct and indirect) 99.33% Proportion on Enel Américas S.A. Assets 3.77% ENEL GREEN POWER CACHOEIRA DOURADA S.A. Company Name ENEL GREEN POWER CACHOEIRA DOURADA S.A. Type of Company Limited Liability Company Address Rodovia GO 206, Km 0, Cachoeira Dourada Goiania Goiás, Brazil Phone (55 62) 3434 9000 Subscribed and paid-in capital (Th$) 13,221,417 Corporate purpose The corporate purpose of the Company is the carrying out of studies, planning, construction, installation, operation and exploitation of electricity generation plants, and the trade related to these activities. Likewise, the company may foster or participate in other societies formed for the production of electricity, in or out of the Sate of Goiás. Core business Electricity Generation Board of Directors Carlo Federico Vladimir Il‘ic Zorzoli (Chairman) Julia Freitas de Alcantara Nunes Claudia Maria Suanno Senior Management Newton Souza de Moraes Oliveira (Interim General Manager) Aurelio Ricardo Bustilho de Oliveira Paulo Valle Fróes da Cruz Junior Matteo de Zan Nelson Ribas Visconti Janaina Savino Vilella Carro Carlos Ewandro Naegele Moreira Sérgio Ibrain Figueira Salluh José Nunes de Almeida Neto Anna Paula Hiotte Pacheco Margot Frota Cohn Pires Business relations The company has no commercial relations with Enel Américas S.A. Enel Américas S.A. Shareholding (Direct and indirect) 99.10% CENTRAL DOCK SUD S.A. Company name Central Dock Sud S.A. Type of Company Limited Liability Company Address Avenida Debenedetti 1636 Dock Sud Avellaneda Phone 4229-1000 Subscribed and paid-in capital (Th$) 46,326,930 Company purpose and subsidiary activities linked to its corporate purpose, having to that effect full legal capacity to acquire rights and commit obligations and execute all acts not forbidden by law, by these By-laws, the Document of the International Public Tender for the Sale of Central Dock Sud S.A’s Shares, or by any applicable regulation. Core business Electricity generation Regular Directors Hector Martin Mandarano (Chairman) Vice Chairman position is vacant. Gaetano Salierno Antonio Ascione Mauricio Bezzeccheri Mónica Analía Ciacciarelli Santiago Sajaroff Rodolfo Eduardo Berisso Paula Maria Garcia Kedinger Alternate Directors Fernando Claudio Antognazza Maria Ines Justo Borga Daniel Martini Javier Pastor Vivas Patricio Da Re Carlos Alberto Weis Raul Angel Rodriguez Julian Matias Ferreiro Daniel Gustavo Ciaffone Senior Manangement Gustavo Diego Manifesto General Manager Alejandro Serantes Finance Manager Patricio Cipollone Commercial Manager David Garcia Albalá Operations Manager Graciela Babini Planning and Control Manager Business relations The company has no commercial relations with Enel Américas S.A. Enel Américas S.A. Shareholdings (Direct and indirect) 40.25% CENTRAL GERADORA TERMELÉCTRICA FORTALEZA S.A. Company name Central Geradora Termeléctrica Fortaleza S.A. Type of Company Limited Liability Company Address Rodovia 422, Km 1 s/n, Complexo Industrial e Portuário de Pecém Caucaia Ceará, Brazil Phone (55 85) 3464-4100 The corporate purpose of the company is the generation of electricity and its block sale. The company may carry out any supplementary Subscribed and paid-in capital (Th$) 31,221,803 241 Corporate purpose To study, project, construct and explore electricity production, transmission, distribution and trading systems, awarded, permitted or authorised by any rights title, as well as any other activity related to the aforementioned activities; acquisition, obtaining and exploration of any right, concession or privilege related to the aforementioned activities, as well as the practice of all other acts and businesses necessary to reach its purpose; and participation in other companies or societies corporate capital, as shareholder, partner or on account of participation, whichever its purposes are. Core business Electricity generation. Board of Directors Carlo Federico Vladimir Il‘ic Zorzoli (Chairman) Matteo de Zan (Vice Chairman) Julia Freitas de Alcantara Nunes Senior Management Aurelio Ricardo Bustilho de Oliveira (Interim General Manager) Marcelo Falcucci Claudia Maria Suanno Janaina Savino Vilella Carro Raimundo Câmara Filho Ana Claudia Gonçalves Rebello José Nunes de Almeida Neto José Alves de Mello Franco Margot Frota Cohn Pires upon November 25, 2010 by the National State and the signing Generation companies. Core business Construction of a thermal power plant called Central Vuelta de Obligado. Regular Directors José María Vázquez (Chairman) Claudio Majul (Vice Chairman) Roberto José Fagan Fernando Claudio Antognazza Deputy Directors Leonardo Marinaro Juan Carlos Blanco Daniel Garrido Adrian Salvatore Senior Management Leonardo Katz General Manager Business relations The company has no commercial relations with Enel Américas S.A Enel Américas S.A. Shareholding (Direct and indirect) 25.25% ENEL CIEN S.A. Company name ENEL CIEN S.A. Type of Company Limited Liabilty Company Commercial relations The company has no commercial relations with Enel Américas S.A. Address Praça Leoni Ramos, N° 1, piso 6, Bloco 2, São Domingos, Niterói Río de Janeiro, Brazil Enel Américas S.A. Shareholding (Direct and indirect) 99.34% CENTRAL VUELTA OBLIGADO S.A. Company name Central Vuelta Obligado S.A. Type of society Limited Liability Company Address Av. Thomas Edison 2701 Ciudad Autónoma de Buenos Aires, Argentina Phone (5411) 5533 0200 Subscribed and paid-in capital (Th$) 21,045 of and electricity purchasing Corporate purpose its Generation commercialization by blocks and particularly, equipment management, construction, operation and maintenance of a thermal power plant named Vuelta Obligado complying with “ Management and Operation of Projects, Increase of Thermal Generation Availability and Generation Compensation Adaptation 2008-2011 Agreement” agreed Phone (55 21) 3607 9500 Subscribed and paid-in capital (Th$) 58,574,807 Corporate purpose The purpose of the company is the production, industrialization, distribution and commercialization of electricity, including the import and export activities. In view of achieving the purposes mentioned above, the company will promote the study, planning and construction of facilities for production systems, transmission, conversion and distribution of electricity by capturing the necessary investment to develop the activities and by providing services. Beyond the purposes referred to, the company may promote the implementation of associated products, as well as inherent, ancillary or complementary activities to services and jobs that cometh to provide. To carry out the activities necessary to achieve its goals, the company may participate in other societies. Core business Electricity transmission. Board of Directors Carlo Federico Vladimir Il‘ic Zorzoli (Chairman) Cristine de Magalhães Marcondes (Vice Chairman) Orestes Lizardo Castañeda Pacheco Senior Managemenr Abel Alves Rochinha (General Manager) Aurelio Ricardo Bustilho de Oliveira Orestes Lizardo Castañeda Pacheco José Alves Mello Franco Déborah Meirelles Rosa Brasil Carlos Ewandro Naegele Moreira José Nunes de Almeida Neto Janaina Savino Vilella Carro Margot Frota Cohn Pires Business relations The company has no commercial relations with Enel Américas S.A. Enel Américas S.A. Shareholding (Direct and indirect) 99.34% CHILECTRA INVERSUD S.A. (Merged in Enel Américas S.A. since January 1st, 2017) Company name Chilectra Inversud S.A. TAX ID 99,573,910-0 Type of Company Limited Liability Company Address Santa Rosa 76, 8th Floor Santiago, Chile Phone (56 2) 2675 2000 Subscribed and paid-in capital (Th$) 265,306,227 Corporate purpose Operate abroad, for its own or through third parties, the distribution and sale of electricity. It may make investments in foreign companies and make all kind of investments in every kind of financial instruments, such as; bonds, debentures, debt titles, credits, negotiable securities or other financial or commercial documents, all with to the objective of obtaining their natural and civil returns. In order to do so, it may constitute, amend, dissolve and liquidate companies in foreign countries and develop all other activities that are complementary and/or related to the aforementioned businesses. Core business Investment Company. Board of Directors Ramón Castañeda Ponce Francisco Miqueles Ruz Gonzalo Vial Vial Senior Management Francisco Miqueles Ruz General Manager Business relations Contract for services provision by Enel Américas: Provision of internal audit and 242 Enel Américas Annual Report 2016 compliance control services. Price: UF amount per worked hour that Enersis’ staff dedicates to the services contracted. Enel Américas S.A. Shareholding (Direct and indirect) 100% Proportion on Enel Américas S.A. Investments Assets 3.83% CHINANGO S.A.C. Company name Chinango S.A.C. Type of Company Publicly Traded Company Address Calle César López Rojas N° 201, Urb. Maranga, San Miguel Lima, Peru Subscribed and paid-in capital (Th$) 53,052,121 Corporate purpose Electricity generation, trading and transmission, being able to perform all acts and to engage all contracts that the Peruvian law allows for such purposes. Core business Electricity generation. General Manager Enel Generación Perú S.A.A., represented by Francisco Pérez Thoden Van Velzen Business relations The company has no commercial relation with Enel Américas S.A. Enel Américas S.A. Shareholding (Direct and indirect) 66.88% CHOCÓN Enel Generación El Chocón S.A Company name Enel Generación El Chocón S.A. Type of Company Publicly Traded Company Address Avda, España 3301 Buenos Aires, Argentina Subscribed and paid-in capital (Th$) 12,567,188 Corporate purpose Electricity Generation and its block comercialization Core business Electricity generation. Regular Directors Mauricio Bezzeccheri (Chairman) Gaetano Salierno (Vice Chairman) Daniel Martini Fernando Antognazza Ramiro Alfonsín Balza Alex Daniel Horacio Valdez Juan Carlos Nayar Alberto Eduardo Mousist Alternate Directors María Inés Justo Rodolfo Bettinsoli María Victoria Ramírez Sebastian Eduardo Guasco Fernando Carlos Luis Boggini Gustavo Alejandro Nagel Sergio Maschio Senior Management Néstor Srebernic General Manager Business Relations The company has no commercial relations with Enel Américas S.A. Enel Américas S.A. Shareholding (Direct and indirect) 65.32% CODENSA Compañía Distribuidora y Comercializadora de Energía S.A. Company name CODENSA S.A. E.S.P. NIT: 830.037.248-0 Type of Company Limited Liability Company– Public residential utility company. Address Carrera 13 A No. 93-66 Bogotá D.C, Colombia Phone (57 1) 601 6060 Subscribed and paid-in capital (Th$) 2,999,843 Corporate purpose The company’s main purpose is the distribution and sale of electricity, as well as all similar, connected, complementary and related activities with respect to electricity distribution and sale; the execution of electrical engineering works, design and consultancy, and sale of products for the benefit of its customers. The society may also perform other activities related to the provision of public services in general, manage and operate other utility companies, sign and execute special management agreements with other utility companies and sell or loan goods or services to other economic agents related with utilities, in or out of the country. The society may also participate as partner or shareholder in other utility companies, directly, or joining into partnerships with other persons, or in joint venture with them. Regular Directors David Felipe Acosta Correa Jose Antonio Vargas Lleras Lucio Rubio Diaz Gloria Astrid Álvarez Hernandez Maria Carolina Castillo Aguilar Maria Victoria Angulo Gonzalez Orlando Jose Cabrales Martinez Alternate Directors Carlos Mario Restrepo Leonardo Lopez Vergara Juan Manuel Pardo Gomez Ernesto Moreno Restrepo Eduardo Jose Bernardo Aguirre Monroy Ivan Darío Gomez Castaño Vicente Enrique Noero Arango Senior Management David Felipe Acosta Correa General Manager David Felipe Acosta Infrastructure & Networks Manager Andres Caldas Rico Legal and Corporte Affairs Manager Carlos Mario Restrepo Market Manager Daniele Caprini Administration, Finance and Control Manager Maria Celina Restrepo Santamaría Communications Manager Rafael Carbonell Blanco Human Resources and Organization Manager Diana Marcela Jimenez Regulation and Institutional Relations Manager Eugenio Belinchon Audit Manager Giorgio De Champdore Procurement Manager Ana Patricia Delgado Meza Systems and Telecommunications ICT Manager Ana Lucia Moreno Moreno General Services and Safety Manager Carlo Ferrara Sustainability Manager Business relations The company has no commercial relations with Enel Américas S.A. Enel Américas S.A. Shareholding (Direct and e indirect) 48.41% Proportion on Enel Américas S.A. Investment Assets 12.78% COELCE Compañía Energética Do Ceará S.A. Company name Companhia Energética do Ceará Type of Company Publicly Traded Company Address Rua Padre Valdevino, 150 - Centro Fortaleza, Ceará, Brazil Phone (55 85) 3453-4082 Core business Electricity distribution. Subscribed and paid-in capital (Th$) 114,037,935 243 Corporate purpose Generation, transmission, distribution and sale of electricity, performing awarded or authorised correlated services, and the development of activities associated with the services, as well as celebrating trading acts related to those activities. Likewise, the company may carry out studies, planning, projects, construction and operation of production, transformation, transportation and storage, distribution and sale of energy systems, of any origin, in the form of concessions, authorisations or permits it may be awarded, with jurisdiction in the territory of the State of Ceará, and others defined in the Grantor. The Society may also carry out studies, projects and planning and research and development programmes of new energy sources, especially renewable, and the study, making and execution, in the energy sector, of plans and programmes for economic and social development, in places of interest for the community and for the company. Core business Distribution and sale of electricity and related services in the State of Ceará, Brazil Regular Directors Mário Fernando de Melo Santos (Chairman) Carlo Federico Vladimir Il‘ic Zorzoli (Vice Chairman) Monica Hodor Ramón Francisco Castañeda Ponce Gianluca Caccialupi Cristine de Magalhães Marcondes Francisco Honório Pinheiro Alves Fernando Antonio de Moura Avelino Fernando Augusto Macedo de Melo Aurelio Ricardo Bustilho de Oliveira Alternate Directors José Nunes de Almeida Neto Maria Eduarda Fischer Alcure Deborah Meirelles Rosa Brasil Teobaldo José Cavalcante Leal José Tavora Batista Carlos Ewandro Naegle Moreira Marcia Massotti de Carvalho Cesario Macedo de Melo Neto Nelson Ribas Visconti Dilma Maria Toledo Senior Management Abel Alves Rochinha (General Manager) José Távora Batista Aurelio Ricardo Bustilho de Oliveira Carlos Ewandro Naegele Moreira José Nunes de Almeida Neto Janaina Savino Vilella Carro José Alves Mello Franco Margot Frota Cohn Pires Déborah Meirelles Rosa Brasil Márcia Sandra Roque Vieira Silva Business Relations The company has no commercial relations with Enel Américas S.A. Enel Américas S.A. Shareholding (Direct and indirect) 73.67% Proportion on Enel Américas S.A. Investment Assets 2.66% COMPAÑÍA ENERGÉTICA VERACRUZ S.A.C. Fernando Antognazza Maria Inés Justo Maria Victoria Ramírez Company name Compañía Energética Veracruz S.A.C. Type of Company Limited Liability Company Address Calle César López Rojas N° 201, Urb. Maranga, San Miguel Lima, Peru Subscribed and paid-in capital (Th$) 574,678 Croporate purpose Develop and operate hydroelectric projects located in any river basin in Peru. Activities that the company undertakes Owner of Veracruz hydroelectric project. General Manager Úrsula De La Mata Torres Business relations The company has no commercial relations with Enel Américas S.A. Enel Américas S.A. Shareholding (Direct and indirect) 100% CTM Compañía de Transmisión del Mercosur S.A. Company name Compañía de Transmisión del Mercosur S.A. Type of Company Publicly traded company constituted in Buenos Aires, Argentina Address Bartolomé Mitre 797, 11th Floor, Buenos Aires, Argentina Subscribed and paid-in capital (Th$) 4,209 Corporate purpose The provision of high tension electricity transmission services, in the case of linking both national and international electrical systems, according to current laws, to the purpose of which it may participate in national or international tenders, become a high tension electricity transmission concessionaire, locally or abroad, and perform those activities deemed necessary to carry out its purposes. Core business International interconnected electricity transmission. Regular Directors Juan Carlos Blanco Fernando Boggini Maurizio Bezzeccheri Alternate Directors Senior Management Sandro Ariel Rollan General Manager Business relations The company has no commercial relations with Enel Américas S.A. Enel Américas S.A. Shareholding (Direct and indirect) 99.34% DISTRILEC INVERSORA S.A. Company name Distrilec Inversora S.A. Type of Company Limited Liability Company Address San José 140 Buenos Aires, Argentina Phone (54 11) 4370 3700 Subscribed and paid-in-capital (Th$) 21,276,095 Corporate purpose Exclusively to invest in companies constituted or to be constituted whose main activity is the distribution of electricity or that directly or indirectly participate in companies with that principal business through all kind of financial and investment activities, except those in the laws of financial entities, the purchase and sale of public and private debt paper, bonds, shares, negotiable instruments and the granting of loans, and the placement of its funds in bank deposits of any kind. Core business Investment Company. Regular Directors Maurizio Bezzecheri Gaetano Salierno (Vice Chairman) María Inés Justo Borga Daniel Horacio Martini Fernando Claudio Antognazza Gonzalo Peres Moore Mariano Luis Luchetti Guillermo Pablo Reca Jorge Carlos Bledel Juan Carlos Casas Alternate Directors Mónica Diskin Paula Bossignon Rodrigo Quesada Vanesa Carrafiello Mariana Marine Andrés Leonardo Vittone Edgardo Licen Elena Sozzani Máximo Reca Tomás Peres Business Relations The company has no commercial relations with Enel Américas S.A. 244 Enel Américas Annual Report 2016 Enel Distribución Perú S.A.A. Type of Company Publicly Traded Company Address Calle César López Rojas 201 Urb, Maranga, San Miguel Lima, Peru Phone (51 1) 561 2001 Subscribed and paid-in capital (Th$) 105,913,378 Address San José 140 (1076) Capital Federal, Argentina Phone (54 11) 4370 3700 Subscribed and paid-in capital (Th$) 36,136,963 Corporate purpose Distribution and commercialization of electricity and related activities. Core business Corporate purpose Electricity distribution. Enel Américas S.A. Shareholding (Direct and indirect) 51.50% Proportion on Enel Américas S.A. Investment Assets 0.13% ENEL GENERACIÓN PERÚ S.A.A. Company name Enel Generación Perú S.A.A. Type of Company Publicly Traded Company Address Calle César Lopez Rojas N° 201, Urb. Maranga, San Miguel Lima, Peru (address change according to memo 2015) Subscribed and paid-in capital (Th$) 554,281,444 Corporate purpose In general, electricity generation activities, also the civil, industrial, commercial and any other act or operation related or leading to its Main Corporate Purpose. Core business Electricity generation. Regular Directors Carlos Temboury Molina (Chairman) Francisco José Pérez Thoden Van Velzen Rigoberto Novoa Velásquez Paolo Giovanni Pescarmona Rocío Pachas Soto Francisco García Calderón Portugal Claudio Herzka Buchdahl Alternate Directors Guillermo Lozada Pozo Carlos Rosas Cedillo Daniel Abramovich Ackerman Carlos Sedano Tarancón Úrsula De La Mata Torres Milagritos Tatiana Lozada Gobea Ernesto Villanueva Roca Senior Management Francisco Pérez Thoden Van Velzen General Manager Carlos Rosas Cedillo Energy Management and Trading Manager Daniel Abramovich Ackerman Legal Councel Engage the activities of distribution, transmission and generation of electricity in accordance with the provisions of current legislation. Additionally, the company may engage in the sale of goods in any form, as well as providing consulting and financial services, among others, except those services, which require specific authorization in accordance with current law. Core business Distribution of electricity Board of Directors Carlos Temboury Molina (Chairman) Fernando Fort Marie (Vice Chairman) Mario Ferrai Quiñe Walter Néstor Sciutto Paolo Giovanni Pescarmona Gianluca Caccialupi Carlos Alberto Solis Pino José de Bernardis Guglievan Senior Management General Management Walter Néstor Sciutto Paolo Giovanni Pescarmona Administration, Finance & Control Manager Carlos Alberto Solis Pino Commercial Manager Luis Salem Hone Legal Councel Milagritos Tatiana Lozada Gobea Regulation Manager Rocío Pachas Soto Organization and Human Resources Manager María Alicia Martínez Venero Communications Manager Business relations The company has no commercial relations with Enel Américas S.A. Business relations The company has no commercial relations with Enel Américas S.A. Enel Américas S.A. Shareholding (Direct and indirect) 75.68% Enel Américas S.A. Shareholding (Direct and indirect) 83.60% Proportion on Enel Américas S.A. Investment Assets 1.61% Proportion on Enel Américas S.A. Investment Assets 4.14% EDESUR Empresa Distribuidora Sur S.A. ENEL DISTRIBUCIÓN PERÚ S.A.A. Company name Company name Empresa Distribuidora Sur S.A. Type of Company Publicly Traded Company Regular Directors Maurizio BezzeccherI (Chairman) Mónica Hodor Gaetano Salierno (Vice Chairman) Gonzalo Peres Moore Guillermo P. Reca Alternate Directors Gonzalo Manuel Vial Vial (Legal Councel of Enel Distribución Chile until December 1st, 2016) María Victoria Ramirez Marcello Coffaro Rubén Vazquez Rubén Omar Lopez Class B Regular Directors Paula Aguiar Ernesto Pablo Badaraco Gerardo Marcelo Rogelio Silva Iribarne María Inés Justo Borga Alternate Directors Rodrigo Quesada Daniel Garrido Mariana Marine Mónica Diskin Senior Management Juan Carlos Blanco General Manager Business relations The company has no commercial relations with Enel Américas S.A. Enel Américas S.A. Shareholding (Direct and indirect) 72.07% ELÉCTRICA CABO BLANCO S.A.C. Company name Eléctrica Cabo Blanco S.A.C. Type of Company Publicly Traded Company Address Calle César López Rojas 201, Urb. Maranga, San Miguel Lima, Peru Subscribed and paid-in capital (Th$) 9,248,012 Corporate purpose In general, to invest in other companies, 245 preferably in those oriented to exploiting natural resources, and very specially, in those linked to distribution, transmission and generation of electricity. Likewise, it may make capital investments in any kind of movable property, including shares, bonds and any other kind of securities, as well as administration of said investments within limits fixed by the Board and the General Shareholders’ Meeting. The activities that make up the corporate purpose may be developed in Peru and abroad. Core business Investment Company. Senior Management Manuel Cieza Paredes General Manager Business relations The company has no commercial relations with Enel Américas. Enel Américas S.A. Shareholding (Direct and indirect) 100% Proportion on Enel Américas S.A. Investment Assets 0.43% EMGESA Emgesa S.A. E.S.P. Company name Emgesa S.A. E.S.P. TAX ID 860.063.875-8 Type of Company Private Commercial Corporation. Public Utility Company Address Carrera 11 N°82-76, piso 4 Bogotá, D.C. Colombia Subscribed and paid-in capital (Th$) 145,731,804 Corporate purpose is The corporate purpose of the company generation and sale of electricity and sale of fuel gas, as well as all activities similar, connected, supplementary and related to its main purpose. Core business Electricity and fuel gas generation and commercialization. Regular Directors Bruno Riga Lucio Rubio Diaz Jose Antonio Vargas Lleras Gloria Astrid Álvarez Hernandez Jose Alejandro Herrera Lozano María Consuelo Araujo Castro Luisa Fernanda Lafaurie Rivera Alternate Directors Diana Marcela Jimenez Rodriguez Fernando Javier Gutierrez Medina Daniele Caprini Diana Margarita Vivas Munar Sergio Andrés Gomez Navarro Richard Ernesto Romero Raad Andrés Lopez Valderrama 246 Senior Management Bruno Riga General Manager Bruno Riga Renewables Energies Manager Marcelo Falcuchi Thermal Generation Manager Andres Caldas Rico Energy Management and Trading Manager Fernando Javier Gutierrez Medina Energy Trading Manager Daniele Caprini Administration, Finance and Control Manager Maria Celina Restrepo Santamaría Communications Manager Rafael Carbonell Blanco Human Resources and Organization Manager Diana Marcela Jimenez Rodriguez Regulation and Institutional Relations Manager Eugenio Belinchon Audit Manager Giorgio De Champdore Procurement Manager Ana Patricia Delgado Meza Systems and Telecommunications ICT Manager Ana Lucia Moreno Moreno General Services and Safety Manager Carlo Ferrara Sustaunability Manager Commercial Relations The company has no commercial relations with Enel Américas S.A. Enel Américas S.A. Shareholding (Direct and indirect) 48.48% Proportion on Enel Américas S.A. Investment Assets 5.92% EMGESA PANAMÁ, S.A. Company name Emgesa Panamá, S.A. Type of Company Limited Liability Company, not listed and it’s not a securities issuer. Address Ciudad de Panamá, Panamá Corporate purpose Purchase, sale, import and export of electricity. Additionally, the company may perform other industrial and commercial activities in general; it is able to celebrate all transactions, operations, business, events and activities that are permitted by the Panamanian law to corporations even if they are not expressly mentioned in this corporate purpose. Core business Purchase, sale, import and export of electricity. Subscribed and paid-in capital (Th$) 37,558 Directors Fernando Gutierrez Medina Leonardo Lopez Vergara Juan Manuel Pardo Andres Caldas Rico Senior Management Fernando Gutierrez Medina Chairman and Legal Representative Juan Manuel Pardo Gomez Vice Chairman (First) Leonardo Lopez Vergara (Second) Vice Chairman Business Relations The company has no commercial relations with Enel Américas S.A. Enel Américas S.A. Shareholding (Direct and indirect) 48.48% ENEL GENERACION PIURA S.A. Company name Enel Generación Piura S.A. Type of Company Publicly traded company Address Calle César López Rojas 201, Urb. Maranga, San Miguel Lima, Peru Subscribed and paid-in capital (Th$) 16,239,426 Corporate purpose The main purpose of the company is the generation, sale and transmission of electricity, performing all acts and signing all agreements allowed by Peruvian Legislation to that effect. Core business Electricity generation and sale of natural gas. Directors Francisco Pérez Thoden van Velzen (Chairman) Carlos Temboury (Vice Chairman) Paolo Giovanni Pescarmona Senior Management Francisco Pérez (representing Enel Generación Perú S.A.A.) General Manager Business relations The company has no commercial relations with Enel Américas S.A. Enel Américas S.A. Shareholding (Direct and indirect) 96.50% ENEL ARGENTINA S.A. Company name Enel Argentina S.A. Type of society Publicly Traded Company Address Av. España 3301 Buenos Aires, Argentina Phone (5411) 4307 3040 Subscribed and paid-in capital (Th$) 66,504,682 Corporate purpose Perform investments in companies dedicated to Enel Américas Annual Report 2016 the production, transmission and distribution of electricity and its commercialization, as well as financial activities except those limited by the law to banks. Company name Enel Brasil S.A. Type of Company Limited Liability Company Core business Investment Company. Regular Directors Mauricio Bezzeccheri (Chairman) Gaetano Salierno (Vice Chairman) Maria Inés Justo Borga Alternate Directors Rodrigo Quesada Mariana Cecilia Mariné María Victoria Ramírez Business relations The company has no commercial relations with Enel Américas S.A. Enel Américas S.A. Shareholding (Direct and indirect) 99.88% Proportion on Enel Américas S.A. Investment Assets 2.79% ENEL SOLUÇÕES S.A. Company name ENEL SOLUÇÕES S.A. Type of society Limited Liability Company constituded pursuant to the Brazilian law. Address Praça Leoni Ramos nº 01 Parte, São Domingos, Niterói, Rio de Janeiro, Brazil. Phone (55 21) 2613 7000 Subscribed and paid-in capital (Th$) 2,163,355 Corporate purpose The company’ objective is to participate in the capital of other companies in Brazil or abroad, trade in general, even imports and exports, through retail or wholesale transactions of various products, and to provide general services for the energy electricity sector and others. Core business Provision of services in general to the electricity industry and others. The company doesn’t have any administration council (Board of Directors) Senior Executives Marcus Oliver Rissel Claudio Manuel Rivera Moya Business relations The company has no commercial relations with Enel Américas S.A. Enel Américas S.A. Shareholding (direct and indirect) 99.34% ENEL BRASIL S.A. Address Praça Leoni Ramos, N°1, 7° andar, bloco 2 Parte, Niterói, Río de Janeiro, Brazil Phone (5521) 3607 9500 Subscribed and paid-in capital (Th$) 287,284,756 Company purpose Participate in the capital of other companies in any segment of the electricity sector, including companies that provide services to companies in that sector, in Brazil or abroad; transmission, distribution, generation or commercialization related activities and of electricity and participation, joint ventures, consortia or other similar forms of association, tenders, projects and enterprises for the supply of services and activities previously mentioned. individually or through in Core business Investment Company. Board of Directors Mario Fernando de Melo Santos (Chairman) Luca D’Agnese (Vice Chairman) (General Manager of Enel Américas S.A.) Antonio Basilio Pires de Carvalho e Albuquerque Aurelio Ricardo Bustilho de Oliveira Anna Brogi Senior Management Carlo Federico Vladimir Il‘ic Zorzoli (General Manager) Aurelio Ricardo Bustilho de Oliveira Antonio Basilio Pires de Carvalho E Albuquerque Carlos Ewandro Naegele Moreira José Alves de Mello Franco José Nunes de Almeida Neto Janaina Savino Vilella Carro Flávia da Silva Baraúna Margot Frota Cohn Pires Márcia Massotti de Carvalho Gabriel Maluly Neto Manuel Ricardo Soto Retamal Guilherme Gomes Lencastre Matteo de Zan Cristine de Magalhães Marcondes André Osvaldo dos Santos Business relations The company has no commercial relations with Enel Américas S.A. Enel Américas S.A. Shareholding (Direct and indirect) 99.34% Proportion on Enel Américas S.A. Investment Assets 27.72% ENEL TRADING ARGENTINA S.R.L. Company name Enel Trading Argentina S.R.L. Type of Company Limited Liability Company Address San José 140, piso 6, CABA Buenos Aires, Argentina Phone (5411) 4124-1600 Subscribed and paid-in capital (Th$) 589,755 Corporate purpose The purpose of the company is the wholesale purchase and sale of electricity capacity and energy produced and/or consumed by third parties, including the import and export of electricity power and energy and the marketing of royalties, and the supply and/or performing of services related to the above activity, both in the country as well as abroad of information technology services and/or of control of the telecommunications. operation and/or of Likewise, the Company shall be entitled to execute buy/sell operations or to purchase and sell natural gas, and/or its transportation, including the importation and/or exportation of natural gas and/or the marketing of regalia/ privileges, as well as to provide and/or execute services the abovementioned activity. Also, the Company shall be entitled to execute buy/sell operations or to purchase and sell crude petroleum, and/or lubricants and/ or to transport such elements, including the importation and/or exportation of liquid fuels and the marketing of regalia/privileges, as well as to provide and/or execute services related to the aforementioned activity. related to Core business Trading of electricity, gas and derivatives. IT services and/or operation control and/or telecommunications. Regular Managers Maurizio Bezzeccheri Gaetano Salierno Alternate Managers María Inés Justo Borga Fernando Carlos Luis Boggini Senior Management Fernando C, Antognazza General Manager Business relations The company has no commercial relations with Enel Américas S.A. Enel Américas S.A. Shareholding (Direct indirect) 99.95% Proportion on Enel Américas S.A. Investment Assets 0.05% ENEL GENERACIÓN COSTANERA S.A. Company name Enel Generación Costanera S.A.. Type of Company Publicly Traded Company Address Avda, España 3301, Buenos Aires, Argentina Phone 247 (5411) 4307 3040 Subscribed and paid-in capital (Th$) 30,569,739 MODELO II EÓLICA S.A. Company name Enel Green Power Modelo II Eólica S.A. Corporate purpose Electricity generation and trading in blocks of energy. Type of society Limited Liability Company Type of society Limited Liability Company Address Calle César López Rojas 201, Urb. Maranga, San Miguel Lima, Peru Address Praça Leoni Ramos, Nº 1, 5º andar, bloco 2 Niterói, RJ, Brazil, CEP: 24.210-205 Subscribed and paid-in capital (Th$) 29,178,809 Corporate purpose Core business Electricity generation Regular Directors Mauricio Bezzeccheri (Chairman) Gaetano Salierno (Vice Chairman) Daniel Martini Ramiro Alfonsín Balza María Inés Justo César Fernando Amuchástegui Matías Maria Brea Alternate Directors Fernando Carlos Luis Boggini Rodolfo Silvio Bettinsoli María Victoria Ramírez Rodrigo Quesada Fernando Claudio Antognazza Mariana Mariné Mónica Diskin Juan Donini Senior Management Roberto José Fagan General Manager Core business Wind electricity generation. Corporate purpose Wind electricity generation Subscribed and paid-in capital (Th$) 30,824 Administration Newton Souza de Moraes André Bruno Santos Gordon Afonso Márcio Teixeira Trannin Business relations The company has no commercial relations with Enel Américas. Enel Américas S.A. Shareholding (Direct and indirect) 0.97% EÓLICA FAZENDA NOVA Business relations The company has no commercial relations with Enel Américas S.A. Enel Américas S.A. Shareholding (Direct and indirect) 75.59% Company name Eólica Fazenda Nova or Geraçãoa e Comercialização de Energia S.A. Type of Company Limited Liability Company ENEL GREEN POWER MODELO I EÓLICA S.A. Company name Enel Green Power Modelo I Eólica S.A. Type of Company Limited Liability Company. Address Praça Leoni Ramos, Nº 1, 5º andar, bloco 2 Niterói, RJ, Brazil Subscribed and paid-in capital (Th$) 35,961 Corporate purpose Wind Electricity generation Core business Wind electricity generation. Administration Newton Souza de Moraes André Bruno Santos Gordon Afonso Márcio Teixeira Trannin Address Rua Felipe Camarão, nº 507, sala 104 Ciudad de Natal, Rio Grande do Norte, Brazil Phone (5521) 3607 9500 Subscribed and paid-in capital (Th$) 377,902 Corporate purpose transmission, distribution and Generation, trading of energy, participation in other companies as a partner, shareholder, or quota holders and import machinery and equipment related transmission, the generation, distribution and trading of wind energy. to Core business Electricity generation. Administration Márcio Teixeira Trannin (Gerente General) Leonardo Soares Walter Business relations The company has no commercial relations with Enel Américas S.A. Business relations The company has no commercial relations with Enel Américas. Enel Américas S.A. Shareholding (Direct and indirect) 0.97% ENEL GREEN POWER Enel Américas S.A. Shareholding (Direct and indirect) 99.29% GENERALIMA S.A.C. Company name Generalima S.A.C. 248 To make investments, in general, in other companies, preferably in those dedicated to the exploitation of natural resources, and very specially, in those linked to distribution, transmission and generation of electricity. Likewise, it may make investments in capital of any kind of movable property, including shares, bonds and any other kind of securities, as well as administration of said investments within the limits set by the Board and the General Shareholders’ Meeting. The activities included in this corporate purpose may be developed in Peru or abroad. Core business Investment Company. Senior Management Úrsula de la Mata Torres General Manager Business relations The company has no commercial relations with Enel Américas S.A. Enel Américas S.A. Shareholding (Direct and indirect) 100%- Without variation Proportion on Enel Américas S.A. Investment Assets 0.32% GENERANDES PERÚ S.A. Company name Generandes Perú S.A. Type of society Publicly Traded Company Address Calle César Lopez Rojas 201 N° 201, Urb. Maranga, San Miguel Lima, Peru Phone (511) 215 6300 Subscribed and paid-in capital (Th$) 326,609,152 Corporate purpose The company has the purpose to develop activities related to electricity generation, directly, or through companies created for that purpose Core business Investment Company. Regular Directors Carlos Temboury Molina (Chairman) Francisco José Pérez Thoden Van Velzen Paolo Giovanni Pescarmona Business relations The company has no commercial relations with Enel Américas Annual Report 2016 Enel Américas. Enel Américas Shareholding (Direct and indirect) 100% Proportion on Enel Américas S.A. Investment Assets 7.53% HIDROINVEST S.A. Company name Hidroinvest S.A. Type of society Publicly Traded Company Address Avda, España 3301 Buenos Aires, Argentina Phone (5411) 4307 3040 laboratories, Offer services in engineering, studies, projects, technical consulting, management, inspection and supervision of works supply, inspection and reception of materials and equipment commercial for representation of local and foreign engineering companies, as well as other services that the legal powers permit in the practice of the professions of engineering, architecture, agronomy, geology and meteorology in all their specialties. appraisals, Core business Engineering services. Representative Bruno César Vasconcelos Business relations The company has no commercial relations with Enel Américas S.A. The company has no commercial relations with Enel Américas. Enel Américas S.A.Shareholding (Direct and indirect) 100% Proportion on Enel Américas S.A. Investment Assets 2.45% INVERSORA CODENSA S.A.S. Company name Inversora Codensa S.A.S. Type of Company Simplified Joint Stock Company Address Carrera 11 N°82-76, Piso 4 Bogotá, Colombia Subscribed and paid-in capital (Th$) 2,328,042 Corporate purpose Acquire and maintain a majority shareholding in Hidroeléctrica Alicura S.A. and/or Hidroeléctrica El Chocón S.A. and/or Hidroeléctrica Cerros Colorados S.A. (“the concessionaire companies”) created by National Executive Power decree 287/93 and manage such investments. Core business Investment Company Regular Directors Mauricio Bezzeccheri (Chairman) Gaetano Salierno (Vice Chairman) María Inés Justo Alternate Directors Fernando Claudio Antognazza Rodrigo Quesada Business Relations The company has no commercial relations with Enel Américas S.A. Enel Américas S.A. Shareholding 41.9411% (direct and indirect) 96.03% file Proportion on Enel Américas S.A. Investment Assets 0.57% INGENDESA DO BRASIL Ltda. (Company under liquidation) Company name Ingendesa do Brasil Ltda. Type of society Limited Liability Company Address Praça Leoni Ramos, Nº 1 Parte, São Domingos Niterói - RJ, Brazil Subscribed and paid-in capital (Th$) 102,746 Corporate purpose INVERSIONES DISTRILIMA S.A.C. Phone (571) 601 6060 Company name Inversiones Distrilima S.A.C. Type of society Limited Liability Company Address Calle César López Rojas 201, Urb. Maranga, San Miguel Lima, Peru Phone (511) 561 1604 Subscribed and paid-in capital (Th$) 144,634,754 Corporate purpose Perform investments in other companies, most preferably in those Involved in the exploitation of natural resources, and especially those related to the distribution, transmission and generation of electricity. In order to perform according to its purpose and practice the activities related to it, the company may perform all actions and enter into all contracts that the Peruvian laws allow to corporations. The company may also make equity investments in any kind of property including stocks, bonds and any other class of transferable securities, as well as the administration of such investments within the limits set by the board and ordinary shareholders meeting. The activities that are considered within the purpose of the company may be carried out in Peru and abroad. Core business Investment Company. Directors The Ordinary shareholders meeting held on 03/29/2011 agreed to change the entity Into a Private Company without the constitution of a Board of Directors. Senior Management Carlos Temboury Molina General Manager Business relations Subscribed and paid-in capital (Th$) 1,112 Corporate purpose Investment in residential public electric utility services, especially the acquisition of shares in any public electric utility or in any other company that also invests in utilities whose main purpose is residential electricity service according to the definition in Law 142 of 1994, or in any other company that also invests in utilities whose main purpose is residential public electric utility services. Core business Investment Company. Senior Management David Felipe Acosta Correa Manager Leonardo Lopez Vergara First Deputy Manager Juan Manuel Pardo Gómez Second Deputy Manager Business relations The company has no commercial relations with Enel Américas S.A. Enel Américas S.A. Shareholding (Direct and indirect) 48.41% INVERSORA DOCK SUD S.A. Company name Inversora Dock Sud S.A. Type of Company Limited Liability Company Address Avenida Debenedetti 1636 Dock Sud Avellaneda Phone 4229-1000 Subscribed and paid-in capital (Th$) 33,634,105 Corporate purpose 249 Capital Federal and Gran Buenos Aires, all in accordance with the international public tender for the sale of Class A shares in Edenor S.A. and Edesur S.A. and applicable regulations. Enel Américas S.A. Enel Américas S.A. Shareholding (Direct and indirect) 48.41% The corporate purpose of the company is the participation in companies of any nature, by means of creating shareholding companies, transitory company ventures, collaboration groups, joint ventures, consortiums and any other kind of association, and in general, the purchase, sale and negotiation of titles, shares and all other kind of securities and credit papers in any of the systems or modes created or to be created. Core business Investment Company Regular Directors Mauricio Bezzeccheri Gaetano Salierno Hector Martin Mandarano Raul Angel Rodriguez Mónica Analía Ciacciarelli Antonio Ascione Alternate Directors Danierl Martini Maria Ines Justo Borga Fernando Claudio Antognazza Javier Pastos Vivas Patricio Da Re Core business Lead, supervise and control of operations from the Argentine electricity system. Regular Directors Roberto De Antoni  Leandro Ostuni Daniel Flaks Eduardo Maggi Alternate Directors Fabio Canosa Leonardo Lintura Alberto Rica José Luis Marinelli Senior Management Francisco Cerar General Manager Business relations The company has no commercial relations with Enel Américas S.A. Business relations The company has no commercial relations with Enel Américas S.A. Enel Américas S.A. Shareholding (Direct and indirect) 36.04% Enel Américas S.A. Shareholding (direct and indirect) 57.14% Proportion on Enel Américas S.A. Investment Assets 0.21% SACME S.A. Company name Sacme S.A. Type of Company Limited Liability Company Address Avda, España 3251 Buenos Aires, Argentina Phone (5411) 4361 5107 Subscribed and paid-in capital (Argentinean Pesos) 1,569 Corporate purpose Conduct, supervise and control the operation of the electricity generation, transmission and sub transmission system of Capital Federal and Gran Buenos Aires, and the interconnections with the Argentine Interconnection System (SADI in its Spanish acronym). Represent the companies Distribuidora Edenor S.A. and Edesur S.A. in terms of operations, before the wholesale market administrator, Compañía Administradora del Mercado Mayorista Eléctrico (CAMMESA in its Spanish acronym. In general, adopt all actions necessary to allow it to carry out the administration of the business correctly, as being constituted for this purpose by the concessionaire companies of the electricity distribution and trading in SOCIEDAD PORTUARIA CENTRAL CARTAGENA S.A. Company name Sociedad Portuaria Central Cartagena S.A. Type of Company Publicly Traded Compnay Address Carrera 13 A No. 93-,66, piso 2 Bogotá, D.C. Colombia Subscribed and paid-in capital (Th$) 1,290 Corporate purpose The company’s main purpose is the following: 1. Investment, construction and maintenance of docks and private and public ports, their management and operations and the development and operation of a multipurpose port, is according to the law, among others. Regular Directors Bruno Riga Leonardo Lopez Vergara Juan Manuel Pardo Alternate Directors Fernando Javier Gutierrez Medina Alba Lucia Salcedo Luis Fernando Salamanca Senior Management Fernando Gutierrez Medina General Manager Bruno Riga First Deputy General Manager Oswaldo Rafael Novoa Arroyo Second Deputy General Manager Business relations The company has no commercial relations with TERMOELÉCTRICA JOSÉ DE SAN MARTÍN S.A. Company name Termoeléctrica José de San Martín S.A. Type of Company Publicly Traded Company Address: Elvia Rawson de Dellepiane 150, piso 9, Buenos Aires, Argentina Phone: (54 11) 4117-1011/1041 Capital suscrito y pagado (M$): 35.877 21.045 Corporate purpose The generation of electricity and its block trading, and particularly the management of the equipment, construction, operation and maintenance of a thermal plant in accordance with the management and operation of the projects for the re-adaptation of the MEM in the terms of Resolution SE N° 1427/2004”, approved by Resolution SE N° 1193/2005. the “Definitive agreement for Core business Electricity generation. Management services (acquisition of equipment, construction, operation and maintenance of a thermal power plant). Regular Directors José María Vazquez Claudio O. Majul Roberto Fagan Fernando Claudio Antognazza Patricio Testorelli (Resigned) Martín Genesio Gerardo Carlos Paz José Manuel Tierno Jorge Ravlich Alternate Directors Adrián Gustavo Salvatore Leonardo Pablo Katz María Inés Justo Fernando Carlos Luis Boggini Iván Durontó Emiliano Chaparro Luís Agustín León Longobardo Sergio Raúl Sánchez Rodrigo García Senior Management Ricardo Arakaki General Manager Business relations The company has no commercial relations with Enel Américas S.A. Enel Américas S.A. Shareholding (Direct and indirect) 16.91% TERMOELÉCTRICA 250 Enel Américas Annual Report 2016 Eduardo Albarracín Miguel Angel Sosa Luis Juan B. Piatti Juan Manuel Pereyra Sandro Ariel Rollan Marisa Varela Jorge Neira Toba Alternate Directors Carlos Bergoglio Maria Inés Justo Fernando Antognazza Gianfranco Catrini Massimo Villa Roberto Leonardo Maffioli Darío Ballaré Fernando Boggini Robert Ortega Alberto E. Verra Senior Management Sandro Ariel Rollan General Manager Business relations The company has no commercial relations with Enel Américas S.A. Enel Américas S.A. Shareholding (Direct and indirect) 22.22% Proportion on Enel Américas S.A. Investment Assets 0.02% Notes: 1. There are no acts or agreements signed by Enel Américas with its subsidiaries or associated companies that could significantly influence its operations and results. 2. With regards to the business relations, future relations planned with subsidiaries or associated companies fall within the company’s corporate purpose, especially continuing to provide its subsidiaries and associated companies with the necessary financial resources for their businesses’ development and, additionally, to provide its subsidiaries with management, financial advisory, business, technical, legal, audit services and, in general, services of any kind deemed necessary for their best performance, notwithstanding which, it is not foreseen that any of these connections would significantly influence Enel America’s operations and results. MANUEL BELGRANO S.A. Phone (5411) 4394 1161 Company name Termoeléctrica Manuel Belgrano S.A. Type of company Publicly Traded Company Address Suipacha 268, piso 12 Buenos Aires, Argentina Phone (5411) 3 221 7950 Subscribed and paid-in capital (Th$) 21,045 its block Corporate purpose The company’s purpose is the generation of electricity and trading, and particularly the management of the equipment, construction, operation and maintenance of a thermal plant in accordance with the “Definitive agreement for the management and operation of the projects for the re-adaptation of the MEM in the terms of Resolution SE N° 1427/2004”, approved by Resolution SE N° 1193/2005. Actividades que desarrolla Management services (acquisition of equipment, construction, operation and maintenance of a thermal power plant). Regular Directors Martín Genesio Emiliano Chaparro Adrián Gustavo Salvatore José María Vásquez Fernando Claudio Antognazza Roberto José Fagan Gerardo Carlos Paz José Manuel Tierno Jorge Ravlich Alternate Directors Rodrigo Leonardo García María Inés Justo Fernando Carlos Luis Boggini Leonardo Marinaro Leonardo Pablo Katz Guillermo Giraudo Julián Mc Loughlin Luis Agustín León Longobardo Sergio Raúl Sánchez Senior Management Gabriel Omar Ures General Manager Business relations The company has no commercial relations with Enel Américas S.A. Enel Américas S.A. Shareholding (Direct and indirect) 16.91% TESA Company name Transportadora de Energía S.A. Type of Company Publicly Traded Company Address Bartolomé Mitre 797, 11th floor Buenos Aires, Argentina Capital suscrito y pagado (M$) 4.209 Corporate purpose High tension electricity transmission services’ provision, linked to both national and international electrical systems, for which purpose it may participate in national and international tenders, become a high tension electricity transmission utilities concessionaire, locally or abroad, and carry out all activities deemed necessary to fulfill its purpose. Core business Electricity transmission. Regular Directors Juan Carlos Blanco (Vice Chairman) Fernando Boggini Maurizio Bezzeccheri (Chairman) Alternate Directors Fernando Antognazza Maria Inés Justo Maria Victoria Ramírez Senior Management Sandro Ariel Rollan General Manager Business relations The company has no commercial relations with Enel Américas S.A. Enel Américas S.A. Shareholding (Direct and indirect) 99.34% YACYLEC S.A. Company name Yacylec S.A. Type of Company Limited Liability Company Address Bartolomé Mitre 797, 11th Floor. Buenos Aires, Argentina Phone (5411) 4587 4322/4585 Subscribed and paid-in capital (Th$) 841,786 Corporate purpose Construction, operation and maintenance of the first electrical link between Yacyretá Hydroelectric Plant and the Resistance’s Transformation Station, and provision of electricity transmission services, including the exploitation under concession as independent transmitter. Core business Electricity transmission. Regular Directors Gaetano Salierno (Chairman) Maurizio Bezzeccheri Maria Inés Justo Gerardo Ferreyra Osvaldo Acosta Guillermo Díaz 251 Ring the bell. December 2016 254 Enel Américas Annual Report 2016 Responsibility Statement 255 256 Enel Américas Annual Report 2016  Responsibility Statement The Directors of Enel Américas S.A., formerly Enersis Américas S.A., and the General Manager, signatories of this statement, are responsible under oath of the veracity of the information provided in this Annual Report, in compliance with the General Norm N°30, issued by the Superintendency of Securities and Insurances. CHAIRMAN Francisco de Borja Acha Besga VICECHAIRMAN José Antonio Vargas Lleras DNI: 05263174-S Cédula de ciudadanía: 79,312,642 DIRECTOR Enrico Viale DNI: AU 2580379 DIRECTOR Livio Gallo DNI: AV 0246369 DIRECTOR Hernán Somerville Senn Rut: 4,132,185-7 DIRECTOR Domingo Cruzat Amunaegui Rut: 6,989,304-K DIRECTOR Patricio Gomez Sabiani Pasaporte: 16941675N CHIEF EXECUTIVE OFFICER Luca D’Agnese Rut: 24,910,349-7 257 Enel Américas Annual Report 

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