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Main changes in the scope of consolidation

In the two periods examined here, the scope of consolidation changed as a result of the following main transactions:

2008

  • acquisition, on March 5, 2008, of 85% of Enel Productie (formerly Global Power Investment), a Romanian company active in the generation of electricity; on May 19, 2009, an additional 15% was acquired, giving Enel full control;

  • acquisition, on April 25, 2008, of 50% of Electrica Muntenia Sud (now Enel Distributie Muntenia and Enel Energie Muntenia) and the concurrent subscription of a capital increase approved by the company’s shareholders. Following the operation, Enel holds 64.4% of the company. As from the conclusion of the changes in the company’s governance arrangements needed to define control on June 4, 2008, the company is consolidated on a line-by-line basis, taking account of the shareholding covered by the put option granted to Electrica at the time of the sale, equal to 23.6%;

  • acquisition, on May 19, 2008, of 100% of International Wind Parks of Crete and Hydro Constructional, which operate in Greece in the generation of electricity from renewables;

  • conclusion, on May 28, 2008, of the changes in the governance arrangements of Enel OGK-5, which gave Enel full control as from that date. Enel, acting through the subsidiary Enel Investment Holding, had acquired 59.80% of the Russian company in a series of purchases, of which 22.65% in the public tender completed on March 6, 2008, before selling a minority stake of 4.1% on June 25, 2008. As from May 28, 2008, the company is consolidated on a line-by-line basis;

  • disposal, on June 26, 2008, of the assets specified in the agreements signed between Enel and Acciona on March 26, 2007, and between Enel, Acciona and E.On on April 2, 2007 and March 18, 2008, consisting of:

  • the assets and liabilities held directly or indirectly by Endesa in Italy, France, Poland and Turkey, as well as a number of other assets in Spain (hereinafter “Endesa Europa”);

  • the assets and liabilities in respect of Enel’s equity investments in Enel Viesgo Generación, Enel Viesgo Servicios and Electra de Viesgo Distribución and the equity investments held by them;

  • acquisition, on June 30, 2008, of 80% of Marcinelle Energie, which is building a combined-cycle gas turbine plant in Belgium. The company is consolidated taking account of the put option on 20% granted to Duferco at the time of the sale;

  • disposal, on July 25, 2008, of 51% of Hydro Dolomiti Enel (HDE), a company established by Enel Produzione on May 12, 2008, for the development, together with other partners, of hydroelectric power in the Autonomous Province of Trento. Taking account of the governance structure provided for by the agreement, Enel will exercise a dominant influence over HDE until approval of the financial statements for the 2010 financial year and will therefore consolidate the company on a line-by-line basis until that time.

2009

  • acquisition, on January 9, 2009, of 100% of KJWB (now Endesa Ireland), which operates in Ireland in the electricity generation sector. As it is controlled by Endesa, the company was consolidated on a proportionate basis until June 25, 2009, and on a full line-by-line basis thereafter;

  • disposal, on April 1, 2009, of the entire share capital of Enel Linee Alta Tensione (ELAT), the company to which Enel Distribuzione transferred, with effect from January 1, 2009, a business unit consisting of high-voltage power lines and the related legal relationships;

  • acquisition, between April 22 and June 23, 2009, of 100% of International Wind Parks of Rhodes, Glafkos Hydroelectric Station and International Wind Parks of Achaia, which operate in Greece in the generation of electricity from renewables;

  • acquisition, on June 25, 2009, by Enel, acting through its subsidiary Enel Energy Europe, of the 25.01% of Endesa held, directly and indirectly, by Acciona. Following the acquisition, Enel holds 92.06% of Endesa and exercises full control over the company. As a result, as from that date, Endesa is consolidated in the Enel Group on a full, line-by-line basis rather than proportionately, with separate reporting of the minority interest of 7.94%.

  • disposal, on September 23, 2009, of 51% of SeverEnergia, a Russian company 100% owned until that date by Artic Russia, in which Enel and Eni have stakes of 40% and 60%, respectively. Taking account of the existing governance mechanisms, which enable Enel to exercise a significant influence over the company through Artic Russia, as from that date SeverEnergia has been accounted for using the equity method rather than being consolidated on a proportionate basis;

  • disposal, on September 30, 2009, by Enel Distribuzione of 80% of Enel Rete Gas. Following the transaction, Enel’s stake in Enel Rete Gas fell from 99.88% to 19.8%, with a consequent loss of control. Taking account of the existing governance mechanisms, which enable Enel to exercise a significant influence over the company, as from that date Enel Rete Gas has been accounted for using the equity method rather than being consolidated on a line-by-line basis;

  • disposal, on December 10, 2009, of the 100% of Avisio Energia held by Hydro Dolomiti Enel; following the disposal, the company, which operates in the gas sale and transport sector in Italy, was deconsolidated;

  • acquisition, on December 30, 2009, of 100% of Aioliko Voskero, a company operating in Greece in the renewables generation sector.

For the purpose of accounting for the terms of the agreement of March 26, 2007, between Enel and Acciona, and following achievement of joint control of Endesa, the assets (net of associated liabilities) in respect of renewable energy operations held by Endesa and due to be transferred to Acciona were classified as “Net assets held for sale” in the reclassified balance sheet at December 31, 2008.
Beginning on June 25, 2009, and continuing during the 2nd Half of 2009, Endesa also sold Acciona certain of the assets indicated above, partially modifying, in the contract of February 20, 2009, the assets involved compared with those specified in the agreement of March 26, 2007, for €2,814 million.
At December 31, 2009, the item “Net assets held for sale” therefore includes, in the amount of €3 million, the assets and liabilities of the Endesa renewable energy assets, which although they were included among operations to be sold had not yet been transferred to Acciona pending completion of authorization requirements. Net assets held for sale also include certain other assets held by Endesa, which in the light of decisions taken by management meet the requirements under IFRS 5 for their classification among assets and liabilities held for sale.

In the reclassified income statement, the income or loss, net of the related tax effect, attributable to Enel Rete Gas is reported under “discontinued operations” until the date of its deconsolidation, as have the effects of the disposal of the company on September 30, 2009. As regards those effects, in addition to the €136 million in respect of the adjustment of the value of those assets – carried out in the 1st Quarter of 2009 when the parties reached agreement on a consensus valuation of the assets and liabilities involved in the sale – the item “Net income from discontinued operations” also reflects the loss of €73 million resulting from the sale itself.
In addition to the Italian gas distribution activities, the results of the discontinued operations for 2008 reported for comparative purposes include the results of the assets of Endesa Europa until their sale to E.On on June 26, 2008, as those net assets were acquired for the sole purpose of their resale.