Consolidated Unaudited Results for the Year 2001; ENDESA's Net Income in 2001 Was Euro 1.48 Billion -USD 1.32 Billion-, Rising 5.1% Against 2000.Business Editors MADRID Madrid (mədrĭd`, Span. mäthhrēth`), city (1990 pop. 3,120,732), capital of Spain and of Madrid prov., central Spain, and the focus of its own autonomous region, on the Manzanares River. , Spain--(BUSINESS WIRE)--Feb. 27, 2002 ENDESA (NYSE NYSE See: New York Stock Exchange : ELE ELE equine leukoencephalomalacia. ): Operating Income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for the Period was Euro 3.18 Billion (USD USD In currencies, this is the abbreviation for the U.S. Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 2.83 Billion), An Increase of 7.1% Under Homogeneous The same. Contrast with heterogeneous. homogeneous - (Or "homogenous") Of uniform nature, similar in kind. 1. In the context of distributed systems, middleware makes heterogeneous systems appear as a homogeneous entity. For example see: interoperable network. Accounting Criteria criteria (krītēr´ē  ),n. for CTCs Operating Income Rose 6.3% for the Domestic and 9.3% for the International Business ENDESA Invested Euro 1.21 Billion (USD 1.08 Billion) in the Domestic Electricity Business to Increase Installed Capacity and Improve the Quality of Supply This Amount Represents Around 58% of the Spanish Spanish, river, c.150 mi (240 km) long, issuing from Spanish Lake, S Ont., Canada, NW of Sudbury, and flowing generally S through Biskotasi and Agnew lakes to Lake Huron opposite Manitoulin island. There are several hydroelectric stations on the river. Electricity Industry's Total Estimated Investment in 2001 - The cancellation of deferred tax charges of Euro 224 million (USD 199 million), as a result of the application of a 18% tax rate to capital gains affected by the regime on deferrals of reinvestments approved by Law 24/2001 of 27 December. - The tax exemption for the capital gains on the sale of Edenor. ENDESA's net income in 2001 was Euro 1.48 billion (USD 1.32 Billion), an increase of 5.1% against year 2000. Earnings per share for the year (Euro 1.40 or USD 1.25) were also 5.1% higher. On the other hand, operating income for the year rose 3.7% to Euro 3.18 billion (USD 2.83 billion). Still, it is important to highlight that Royal Decree decree, in law, decision of a suit in a court of equity. It is the counterpart in equity of the judgment in a court of law, although in those jurisdictions where law and equity have merged, judgment is sometimes used to include both. 2/2001 of 2 February February: see month. changed the procedure and the horizon for the recovery of CTCs. Under a homogeneous accounting of the latter in both years, the Years, The the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109] See : Time increase in operating income would have been 7.1% for the year 2001. It should be highlighted that the increase in operating income was 27.4% for the fourth quarter 2001 against the fourth quarter 2000. The 6.3% improvement in the domestic electricity business in 2001 was mainly due to the higher levels of hydraulic generation in the year, which enabled a reduction in fuel costs, and also to Endesa's continued efforts in its cost cutting program during the year. Operating income for the international business was 9.3% higher in spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite the unfavorable macroeconomic mac·ro·ec·o·nom·ics n. (used with a sing. verb) The study of the overall aspects and workings of a national economy, such as income, output, and the interrelationship among diverse economic sectors. conditions in Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. , mainly as a result of the improvements in efficiency achieved by the implementation of Plan Genesis in the affiliates in the region. As for the situation in Latin America, it is important to highlight that ENDESA's financial statements for the year 2001 reflect the impact of the devaluation devaluation, decreasing the value of one nation's currency relative to gold or the currencies of other nations. It is usually undertaken as a means of correcting a deficit in the balance of payments. of the Argentinean peso in January January: see month. 2002. The net negative impact of the devaluation was Euro 84 million (USD 75 million) in net income and Euro 356 million (USD 317 million) in reserves. On the other hand, in 2001 ENDESA sold its holdings in the Argentinean distributor Edenor for Euro 834 million (USD 742 million) and 12.5% of the equity of Viesgo for Euro 241 million (USD 215 million), with net capital gains of Euro 494 (USD 440 million) and 132 million (USD 117 million), respectively. Investments in 2001 were Euro 5.45 billion (USD 4,85 billion), of which Euro 2.90 billion (USD 2.58 billion) were financial investments, mainly to complete the European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. expansion. The rest were capital expenditures and financial investments. The company invested in 2001 Euro 1.21 billion (USD 1.08 billion) in the increase in installed capacity and improvement in the quality of supply in Spain Spain, Span. España (āspä`nyä), officially Kingdom of Spain, constitutional monarchy (2005 est. pop. 40,341,000), 194,884 sq mi (504,750 sq km), including the Balearic and Canary islands, SW Europe. , which represents around 58% of the total amount invested by Spain's the electricity industry in 2001. Basis for the Comparison of the Information The following issues need to be considered in order to compare the financial information for the year 2001 with the previous year: - As previously mentioned, Royal Decree 2/2001 of 2nd February has changed both the accounting treatment and the period for the recovery of CTCs. Under the new regulations CTC CTC - Cornell Theory Center revenues are accounted on a cash basis and the amortization of CTC-recoverable assets is extended from year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. 2007 to year-end 2010. Therefore, and in order to facilitate the analysis of the financial information and a homogeneous comparison of the accounts year-on-year, this note includes a pro-forma income statement for the year 2000 in which the same accounting criteria used in the income statement of the year 2001 are applied as well a comparison of the main magnitudes for each year.
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Main magnitudes from ENDESA's income statement
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(Euro Million)
----------------------------------------------------------------------
2001 2000 % Chge. Proforma % Chge.
2000(a)
----------------------------------------------------------------------
FULL YEAR
----------------------------------------------------------------------
Revenues 15,576 15,264 2.0 14,971 4.0
----------------------------------------------------------------------
EBITDA 5,004 4,969 0.7 4,799 4.3
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Operating Income 3,175 3,061 3.7 2,966 7.1
----------------------------------------------------------------------
Net Income 1,479 1,407 5.1 1,424 3.9
----------------------------------------------------------------------
FOURTH QUARTER
----------------------------------------------------------------------
Revenues 4,249 4,101 3.6 4,005 6.1
----------------------------------------------------------------------
EBITDA 1,214 1,046 16.1 1,059 14.6
----------------------------------------------------------------------
Operating Income 726 549 32.2 570 27.4
----------------------------------------------------------------------
Net Income 432 419 3.1 393 9.9
----------------------------------------------------------------------
(a) Under homogeneous accounting criteria regarding CTCs, that is,
incorporating the changes brought by Royal Decree 2/2001
----------------------------------------------------------------------
Main magnitudes from ENDESA's income statement
----------------------------------------------------------------------
(USD Million)
----------------------------------------------------------------------
2001 2000 % Chge. Proforma % Chge.
2000 (a)
----------------------------------------------------------------------
FULL YEAR
----------------------------------------------------------------------
Revenues 13,864 13,586 2.0 13,326 4.0
----------------------------------------------------------------------
EBITDA 4,454 4,423 0.7 4,272 4.3
----------------------------------------------------------------------
Operating Income 2,826 2,725 3.7 2,640 7.1
----------------------------------------------------------------------
Net Income 1,316 1,252 5.1 1,268 3.9
----------------------------------------------------------------------
FOURTH QUARTER
----------------------------------------------------------------------
Revenues 3,782 3,650 3.6 3,565 6.1
----------------------------------------------------------------------
EBITDA 1,081 931 16.1 943 14.6
----------------------------------------------------------------------
Operating Income 646 489 32.2 507 27.4
----------------------------------------------------------------------
Net Income 385 373 3.1 350 8.8
----------------------------------------------------------------------
(a) Under homogeneous accounting criteria regarding CTCs, that is,
incorporating the changes brought by Royal Decree 2/2001
In order to analyze the income statement of the year 2001 and its
comparison with the year 2000, both are broken down into domestic and
international businesses, as well as international electricity
business and telecoms and other businesses. The financial statements
for the domestic business include ENDESA's corporate structure.
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Domestic International Telecommunications
electricity electricity and
business business other
----------------------------------------------------------------------
Euro %Chge. % Euro % % Euro % %
Mill. on on Mill. chge. on Mill. chge. on
2000 total total total
----------------------------------------------------------------------
FULL YEAR
----------------------------------------------------------------------
Revenues 10,086 3.6 64.8 5,125 3.7 32.9 365 24.6 2.3
----------------------------------------------------------------------
Operating
Income 2,894 2.7 57.8 2,086 6.3 41.7 24 33.3 0.5
----------------------------------------------------------------------
EVITAD 1,799 6.3 56.7 1,423 9.3 44.8 -47 -67.9 -1.5
----------------------------------------------------------------------
FOURTH QUARTER
----------------------------------------------------------------------
Revenues 2,709 6.2 63.8 1,431 7.7 33.7 109 -13.5 2.5
Operating
Income 619 10.9 51 584 16.1 48.1 11 N/A 0.9
---------------------------------------------------------------------
EBITDA 336 30.2 46.3 398 18.8 54.8 -8 65.2 -1.1
---------------------------------------------------------------------
----------------------------------------------------------------------
Domestic International Telecommunications
electricity electricity and
business business other
businesses
----------------------------------------------------------------------
USD %Chge. % USD % % USD % %
Mill. on on Mill. chge. on Mill. chge. on
2000 total total total
----------------------------------------------------------------------
FULL YEAR
Revenues 8,978 3.6 64.8 4,562 3.7 32.9 325 24.6 2.3
----------------------------------------------------------------------
Operating
Income 2,576 2.7 57.8 1,857 6.3 41.7 21 33.3 0.5
----------------------------------------------------------------------
EBITDA 1,601 6.3 56.7 1,267 9.3 44.8 -42 -67.9 -1.5
----------------------------------------------------------------------
FOURTH QUARTER
----------------------------------------------------------------------
Revenues 2,411 6.2 63.8 1,274 7.7 33.7 97 -13.5 2.5
----------------------------------------------------------------------
Operating
Income 551 10.9 51 520 16.1 48.1 10 N/A 0.9
----------------------------------------------------------------------
EBITDA 299 30.2 46.3 354 18.8 54.8 -7 65.2 -1.1
----------------------------------------------------------------------
ANALYSIS OF RESULTS In accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with the above homogeneous accounting criteria, the following analysis of ENDESA's results both for the whole and for its domestic business is based on the comparison of the accounts for 2001 with the proforma Proforma A financial projection based on assumptions. income statement for the year 2000. 1 Operating Income ENDESA's revenues in 2001 were Euro 15.58 billion (USD 13.87 billion), a 4.0% rise on the previous year. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become was Euro 5.00 billion (USD 4.45 billion), an increase of 4.3% over the previous year. Operating income was Euro 3.18 billion (USD 2.83 billion), an increase of 7.1% against 2000. 1.1 Domestic electricity business Operating income for the domestic electricity business was Euro 1.80 billion (USD 1.60 billion) in 2001, an increase of 6.3% against 2000. This increase was mainly due to the following: - The cancellation of deferred tax charges of Euro 224 million (USD 199 million), as a result of the application of a 18% tax rate to capital gains affected by the regime on deferrals of reinvestments approved by Law 24/2001 of 27 December. - The tax exemption for the capital gains on the sale of Edenor. 1.1.1 Revenues Revenues for the domestic electricity business were Euro 10.09 billion (USD 8.98 billion) in 2001, an increase of 3.6% against the previous year. Revenues are broken down as shown below:
----------------------------------------------------------------------
Euro Million
----------------------------------------------------------------------
2001 2000 Change % change
----------------------------------------------------------------------
Sales 9,656 9,276 380 4.1
----------------------------------------------------------------------
CTC 147 237 -90 -38.0
----------------------------------------------------------------------
Services 283 224 59 26.3
----------------------------------------------------------------------
TOTAL 10,086 9,737 349 3.6
----------------------------------------------------------------------
----------------------------------------------------------------------
USD Million
----------------------------------------------------------------------
2001 2000 Change % change
----------------------------------------------------------------------
Sales 8,595 8,257 338 4.1
----------------------------------------------------------------------
CTC 131 211 -80 -38.0
----------------------------------------------------------------------
Services 252 199 53 26.3
----------------------------------------------------------------------
TOTAL 8,978 8,667 311 3.6
----------------------------------------------------------------------
It should be highlighted that the increase in revenues was very similar to the increase in purchase of energy. Therefore net revenues were practically even with year 2000. This was due to the net effect of, on one hand, the higher generation output and, on the other hand, the lower prices charged to end customers as a result of the lower electricity tariff tariff, tax on imported and, more rarely, exported goods. It is also called a customs duty. Tariffs may be distinguished from other taxes in that their predominant purpose is not financial but economic—not to increase a nation's revenue but to protect domestic for the year 2001. Sales Sales were Euro 9.66 billion (USD 8.60 Billion), broken down as follows:
----------------------------------------------------------------------
Euro Million
----------------------------------------------------------------------
2001 2000 Change % change
----------------------------------------------------------------------
Generation,
mainland 3,432 3,228 204 6.3
----------------------------------------------------------------------
Distribution
and transport,
mainland 3,978 3,964 14 0.4
----------------------------------------------------------------------
Supply 1,085 952 133 14
----------------------------------------------------------------------
Trading 173 10 163 N/A
----------------------------------------------------------------------
Extrapeninsular
systems(a) 845 792 53 6.7
----------------------------------------------------------------------
Compensations for
extra costs in
extrapeninsular
systems 126 114 12 10.5
----------------------------------------------------------------------
Resettlements
and others 17 216 -199 -92.1
----------------------------------------------------------------------
TOTAL 9,656 9,276 380 4.1
----------------------------------------------------------------------
(a) For a higher transparency and due to the particularities of
production and generation in the extrapeninsular systems, the
information on these activities is shown separately.
----------------------------------------------------------------------
USD Million
----------------------------------------------------------------------
2001 2000 Change % change
----------------------------------------------------------------------
Generation,
mainland 3,055 2,873 182 6.3
----------------------------------------------------------------------
Distribution
and transport,
mainland 3,541 3,528 12 0.4
----------------------------------------------------------------------
Supply 966 847 118 14
----------------------------------------------------------------------
Trading 154 9 145 N/A
----------------------------------------------------------------------
Extrapeninsular
systems(a) 752 705 47 6.7
----------------------------------------------------------------------
Compensations for
extra costs
in extrapeninsular
systems 112 101 11 10.5
----------------------------------------------------------------------
Resettlements
and others 15 192 -177 -92.1
----------------------------------------------------------------------
TOTAL 8,595 8,257 338 4.1
----------------------------------------------------------------------
(a) For a higher transparency and due to the particularities of
production and generation in the extrapeninsular systems, the
information on these activities is shown separately.
Generation In 2001, demand for electricity in the mainland Mainland. 1 Island (1991 pop. 14,150), 178 sq mi (461 sq km), N Scotland. The largest of the Orkney Islands, it is also called Pomona. Kirkwall, the seat of the Orkney Islands council area, is on the island. grew 5.6% against 2000. Still, the output from generators under the ordinary regime only grew 4.4%, due to the 14.8% increase in the output from generators under the special regime. ENDESA's generation sales in the mainland were 6.3% higher as a result of the following: - The cancellation of deferred tax charges of Euro 224 million (USD 199 million), as a result of the application of a 18% tax rate to capital gains affected by the regime on deferrals of reinvestments approved by Law 24/2001 of 27 December. - The tax exemption for the capital gains on the sale of Edenor. The table below shows the structure of the generation in the mainland for both ENDESA and the whole of the industry for the last two years:
----------------------------------------------------------------------
Structure of electricity generation in the mainland(%)
----------------------------------------------------------------------
ENDESA Total industry
----------------------------------------------------------------------
2001 2000 2001 2000
----------------------------------------------------------------------
Nuclear 34.4 34.4 34.5 35.2
----------------------------------------------------------------------
Coal 45.2 50.3 37.6 43.9
----------------------------------------------------------------------
Hydro 15.4 11.5 22.1 16.0
----------------------------------------------------------------------
Oil-gas 5.0 3.8 5.8 4.9
----------------------------------------------------------------------
Total 100.0 100.0 100.0 100.0
----------------------------------------------------------------------
Distribution and Transmission Energy sold by ENDESA in the mainland was 76,013 GWh in 2001, 4.8% higher than 2000. Despite this increase, revenues from transmission and distribution in the mainland were only Euro 14 million (USD 12 million) higher mainly as a result of the following: - The cancellation of deferred tax charges of Euro 224 million (USD 199 million), as a result of the application of a 18% tax rate to capital gains affected by the regime on deferrals of reinvestments approved by Law 24/2001 of 27 December. - The tax exemption for the capital gains on the sale of Edenor. Still, it should be highlighted that the lower sales from distribution derived de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. from the above are compensated compensated /com·pen·sat·ed/ (kom´pen-sa?tid) counterbalanced; offset. with the subsequent increase in sales in the supply business. Supply In 2001 ENDESA sold 21,741 GWh to eligible customers, an increase of 5.9% against the previous year. Sales from this activity were Euro 1.09 billion (USD 0,97 billion), an increase of 14.0% against 2000, as a result of the higher sales volume and a 7.6% higher average price of electricity sold. Extrapeninsular Systems In 2001 ENDESA's generation output in the extrapeninsular systems was 10,839 GWh. Energy sold to end customers was 11,294 GWh, an increase of 7.4% against the previous year. The difference between generation output and sales to customers is due to the purchases of energy from self-generators. Revenues in these markets amounted to Euro 845 million (USD 752 million), an increase of 6.7% against 2000. Besides, Euro 126 million (USD 112 million) were accounted as compensations. These compensations correspond only to the ones which, with a provisional Temporary; not permanent. Tentative, contingent, preliminary. A provisional civil service appointment is a temporary position that fills a vacancy until a test can be properly administered and statutory requirements can be fulfilled to make a permanent appointment. nature, were set forth in the Royal Decree that set the tariff for the year 2001. Therefore they do not include the additional amounts which ENDESA considers legitimate to receive as a compensation for the higher fuel costs for the extrapeninsular generation the settlement of which is still pending from the Administration and, in accordance with current legislation, amount to Euro 250 million (USD 223 million). CTC Revenues CTC revenues in 2001 were Euro 147 million (USD 131 million) as shown below:
----------------------------------------------------------------------
Euro Million
----------------------------------------------------------------------
2001 2000 Change
----------------------------------------------------------------------
Technology 70 127 -57
----------------------------------------------------------------------
Coal 77 110 -33
----------------------------------------------------------------------
Total 147 237 -90
----------------------------------------------------------------------
----------------------------------------------------------------------
USD Million
----------------------------------------------------------------------
2001 2000 Change
----------------------------------------------------------------------
Technology 62 113 -51
----------------------------------------------------------------------
Coal 69 98 -29
----------------------------------------------------------------------
Total 131 211 -80
----------------------------------------------------------------------
The lower amount of CTCs by technology as defined by Royal Decree 2/2001 is mainly due to the reduction in the electricity tariff for the year, which, by reducing revenues for the industry, also reduces the available amounts for the recovery of CTCs. It should be pointed out that against the Euro 70 million (USD 62 million) in CTCs by technology accounted in 2001, the initial estimate in the draft project for the Law on the Electricity Industry contemplated revenues for ENDESA under this concept for the year 2001 of Euro 635 million (USD 565 million). The lower amount of coal CTCs is due to a smaller amount of generation using domestic coal in the year 2001 as a consequence of the higher levels of hydro hy·dro adj. Hydroelectric. n. pl. hy·dros 1. Hydroelectric power. 2. A hydroelectric power plant. generation in the first quarter. 1.1.2 Operating Expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. Operating expenses in 2001 were 3.1% higher against 2000, and were broken down as shown below:
----------------------------------------------------------------------
Euro Million
----------------------------------------------------------------------
2001 2000 Change % chge.
----------------------------------------------------------------------
Purchases 5,885 5,528 357 6.5
----------------------------------------------------------------------
Purchases of energy 4,074 3,656 418 11.4
----------------------------------------------------------------------
Fuel 1,476 1,546 -70 -4.5
----------------------------------------------------------------------
Transmission and other
external expenses 335 326 9 2.8
----------------------------------------------------------------------
Depreciation 1,095 1,127 -32 -2.8
----------------------------------------------------------------------
Provisions 23 84 -61 -72.6
----------------------------------------------------------------------
Personnel and other
operating costs 1,452 1,461 -9 -0.6
----------------------------------------------------------------------
TOTAL 8,455 8,200 255 3.1
----------------------------------------------------------------------
----------------------------------------------------------------------
USD Million
----------------------------------------------------------------------
2001 2000 Change % chge.
----------------------------------------------------------------------
Purchases 5,238 4,920 318 6.5
----------------------------------------------------------------------
Purchases of energy 3,626 3,254 372 11.4
----------------------------------------------------------------------
Fuel 1,314 1,376 -62 -4.5
----------------------------------------------------------------------
Transmission and other
external expenses 298 290 8 2.8
----------------------------------------------------------------------
Depreciation 975 1,003 -28 -2.8
----------------------------------------------------------------------
Provisions 20 75 -54 -72.6
----------------------------------------------------------------------
Personnel and other
operating costs 1,292 1,300 -8 -0.6
----------------------------------------------------------------------
TOTAL 7,526 7,299 227 3.1
----------------------------------------------------------------------
Purchases Purchases showed an increase of Euro 357 million (USD 318 million) in absolute and 6.5% in relative terms against last year, mainly as a consequence of the following: - Purchases of energy were higher by Euro 418 million (USD 372 million), representing a 11.4% increase above last year. This increase was due to: - The cancellation of deferred tax charges of Euro 224 million (USD 199 million), as a result of the application of a 18% tax rate to capital gains affected by the regime on deferrals of reinvestments approved by Law 24/2001 of 27 December. - The tax exemption for the capital gains on the sale of Edenor. Personnel and Other Operating Expenses As of 31 December December: see month. 2001, workforce for the domestic electricity business was 15,016 employees, a decrease of 1,723 against the end of the previous year. Personnel expenses for the period amounted to Euro 868 million (USD 773 million), 1.6% lower than last year. On the other hand, other operating expenses were Euro 584 million (USD 520 million), an increase of Euro 5 million (USD 4 million) or 0.9%, against the previous year. The balance of this account in 2001 includes Euro 32 million (USD 28 million) corresponding to the increase in costs from new activities, mainly from services to third parties. Disregarding dis·re·gard tr.v. dis·re·gard·ed, dis·re·gard·ing, dis·re·gards 1. To pay no attention or heed to; ignore. 2. To treat without proper respect or attentiveness. n. this effect, the balance of other operating expenses would be lower by Euro 28 million (USD 25 million), a decrease of 4.7% against last year. The implementation of ENDESA's cost cutting plan has enabled savings in the above items under homogeneous terms of Euro 51 million (USD 45 million) in the year 2001, representing a decrease of 3.2% in nominal Trifling, token, or slight; not real or substantial; in name only. Nominal capital, for example, refers to extremely small or negligible funds, the use of which in a particular business is incidental. NOMINAL. Relating to a name. and 5.7% in real terms. Annual cost savings in the domestic electricity business in the year 2001 with respect to the year 1996 amount to Euro 459 million (USD 409 million), or 24% of the cost base in year 1996 in homogeneous terms, to which the 13.7% cumulative inflation for the period should be added. 1.1.3 Operating Income by Line of Business The table below shows the breakdown breakdown /break·down/ (brak´doun) 1. the act or process of ceasing to function. 2. an often sudden collapse in health. 3. loss of self-control. of the operating income for the domestic electricity business by its different activities. Figures below include the result from the corporate structure.
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Euro Million
----------------------------------------------------------------------
Change
----------------------------------------------------------------------
2001 2000 Amount %
----------------------------------------------------------------------
Generation and supply 1,069 1,028 41 4
----------------------------------------------------------------------
Distribution 730 664 107 9.9
----------------------------------------------------------------------
Operating Income 1,799 1,692 148 6.3
----------------------------------------------------------------------
----------------------------------------------------------------------
USD Million
----------------------------------------------------------------------
Change
----------------------------------------------------------------------
2001 2000 Amount %
----------------------------------------------------------------------
Generation and supply 952 915 36 4
----------------------------------------------------------------------
Distribution 650 591 95 9.9
----------------------------------------------------------------------
Operating Income 1,601 1,506 132 6.3
----------------------------------------------------------------------
Operating income for distribution was 9.9% higher as a result of the improvements in efficiency and 4.0% higher for the deregulated activities of generation and supply, in spite of lower CTC revenues and thanks to the reduction in controllable costs and the higher prices of electricity sold to customers. 1.2 International Electricity Business Operating income for the international electricity business in 2001 was Euro 1,42 billion (USD 1.26 billion), an increase of 9.3% against last year. Besides, and for a homogeneous comparison between both years, the following items should be taken into account: - The cancellation of deferred tax charges of Euro 224 million (USD 199 million), as a result of the application of a 18% tax rate to capital gains affected by the regime on deferrals of reinvestments approved by Law 24/2001 of 27 December. - The tax exemption for the capital gains on the sale of Edenor. Should the effect of the above two factors be discounted to allow a homogeneous year-on-year comparison, the increase in operating income would have been 25.7%, which corresponds to the average improvement of the operating income in local currency terms. The table below shows the performance of the EBITDA and operating income broken down by activity and their comparison against the previous year:
----------------------------------------------------------------------
Euro Million
----------------------------------------------------------------------
EBITDA Operating Income
----------------------------------------------------------------------
2001 2000 % Var. 2001 2000 %Var.
----------------------------------------------------------------------
Generation 968 835 15.9 653 531 23
----------------------------------------------------------------------
Distribution and
Transmission 1,115 998 11.7 774 679 14
----------------------------------------------------------------------
Other (a) 3 129 N/A -4 92 N/A
----------------------------------------------------------------------
Total 2,086 1,962 6.3 1,423 1,302 9.3
----------------------------------------------------------------------
(a) Figures for 2000 include ENERSIS's holding in Transelec until
September 2000.
----------------------------------------------------------------------
USD Million
----------------------------------------------------------------------
EBITDA Operating Income
----------------------------------------------------------------------
2001 2000 % Var. 2001 2000 %Var.
----------------------------------------------------------------------
Generation 862 743 15.9 581 473 23
----------------------------------------------------------------------
Distribution and
Transmission 992 888 11.7 689 604 14
----------------------------------------------------------------------
Other (a) 3 115 N/A -4 82 N/A
----------------------------------------------------------------------
Total 1,857 1,746 6.3 1,267 1,159 9.3
----------------------------------------------------------------------
(a) Figures for 2000 include ENERSIS's holding in Transelec until
September 2000.
In spite of the unfavorable macroeconomic conditions in Latin America, especially in Argentina Argentina (ärjəntē`nə, Span. ärhāntē`nä), officially Argentine Republic, republic (2005 est. pop. 39,538,000), 1,072,157 sq mi (2,776,889 sq km), S South America. , and the rationing rationing, allotment of scarce supplies, usually by governmental decree, to provide equitable distribution. It may be employed also to conserve economic resources and to reinforce price and production controls. implemented in Brazil Brazil (brəzĭl`), Port. Brasil, officially Federative Republic of Brazil, republic (2005 est. pop. 186,113,000), 3,286,470 sq mi (8,511,965 sq km), E South America. as a result of the draught, both generation and distribution showed a good performance, with increases of 23% and 14%, respectively. These results have been made possible by the efficiency improvements in all of ENDESA's Latin Lat·in n. 1. a. The Indo-European language of the ancient Latins and Romans and the most important cultural language of western Europe until the end of the 17th century. b. American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of affiliates as a result of the implementation of Plan Genesis, which allow to compensate for the effects of the current economic environment in the region. On the other hand, total workforce for the international electricity business as of 31 December 2001 was 10,617 employees, a reduction of 553 against the previous year. The table below shows EBITDA, operating income for the activities of generation and distribution in the year 2001 and their comparison against 2000, broken down by country where ENDESA has fully consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: affiliates.
----------------------------------------------------------------------
Euro Million
----------------------------------------------------------------------
EBITDA Operating Income
----------------------------------------------------------------------
2001 2000 % Chg. 2001 2000 % Chg.
----------------------------------------------------------------------
Generation
----------------------------------------------------------------------
Chile 362 237 52.7 256 115 122.6
----------------------------------------------------------------------
Colombia 193 186 3.8 132 127 3.9
----------------------------------------------------------------------
Argentina 180 180 - 81 99 -18.2
----------------------------------------------------------------------
Brazil 70 86 -18.6 63 71 -11.3
----------------------------------------------------------------------
Peru 163 146 11.6 121 119 1.7
----------------------------------------------------------------------
TOTAL Generation 968 835 15.9 653 531 23
----------------------------------------------------------------------
----------------------------------------------------------------------
Distribution and
Transmission
----------------------------------------------------------------------
Chile 208 220 -5.5 184 195 -5.6
----------------------------------------------------------------------
Colombia 149 144 3.5 65 65 -
----------------------------------------------------------------------
Argentina 353 311 13.5 235 201 16.9
----------------------------------------------------------------------
Brazil 314 231 35.9 228 156 46.2
----------------------------------------------------------------------
Peru 91 92 -1.1 62 62 -
----------------------------------------------------------------------
TOTAL Dist. and
Transmission 1,115 998 11.7 774 679 14
----------------------------------------------------------------------
----------------------------------------------------------------------
USD Million
----------------------------------------------------------------------
EBITDA Operating Income
----------------------------------------------------------------------
2001 2000 % Chg. 2001 2000 % Chg.
----------------------------------------------------------------------
Generation
----------------------------------------------------------------------
Chile 322 211 52.7 228 102 122.6
----------------------------------------------------------------------
Colombia 172 166 3.8 117 113 3.9
----------------------------------------------------------------------
Argentina 160 160 - 72 88 -18.2
----------------------------------------------------------------------
Brazil 62 77 -18.6 56 63 -11.3
----------------------------------------------------------------------
Peru 145 130 11.6 108 106 1.7
----------------------------------------------------------------------
TOTAL Generation 862 743 15.9 581 473 23
----------------------------------------------------------------------
----------------------------------------------------------------------
Distribution and
Transmission
----------------------------------------------------------------------
Chile 185 196 -5.5 164 174 -5.6
----------------------------------------------------------------------
Colombia 133 128 3.5 58 58 -
----------------------------------------------------------------------
Argentina 314 277 13.5 209 179 16.9
----------------------------------------------------------------------
Brazil 279 206 35.9 203 139 46.2
----------------------------------------------------------------------
Peru 81 82 -1.1 55 55 -
----------------------------------------------------------------------
TOTAL Dist. and
Transmission 992 888 11.7 689 604 14
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The above figures show the positive performance of the operating income for generation in Chile Chile (chĭl`ē, Span. chē`lā), officially Republic of Chile, republic (2005 est. pop. 15,981,000), 292,256 sq mi (756,945 sq km), S South America, west of the continental divide of the Andes Mts. , which more than doubled previous year's figures and that allowed to compensate by a wide margin the negative effects of the situation in Argentina and Brazil, leading to overall increases in the generation business of 23% in operating income and 15.9% in EBITDA. In distribution, operating income grew 14% and EBITDA grew 11.7%, although each country showed different rates of increase. In Chile, operating income in local currency terms rose 7.6%, but the devaluation of the Chilean peso against the dollar turned it into a 5.6% drop in dollar terms. On the other hand, operating income for distribution in Argentina rose 16.9% in Euro terms despite the situation the country went through in the year. In Brazil, the measures approved by the government to compensate for the effects of the energy rationing as a result of the draught in 2001 resulted in a compensation of Euro 140 million (USD 125 million), which offset the negative impact on revenues. This, together with the higher efficiency levels achieved by ENDESA's affiliates, allowed a 46.2% increase in operating income. The table below shows the physical magnitudes for generation and distribution by country and their comparison against 2000.
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Generation (GWh) Distribution (GWh)
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2001 % chge. on 2000 2001 % chge. on 2000
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Chile 15,741 2.6 10,761 6.2
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Colombia 10,105 5.1 8,608 -1.9
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Argentina 11,864 13.3 12,909 2.5
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Brazil 2,256 -33.8 12,091 -10.3
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Peru 4,480 23.7 3,675 3.1
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TOTAL 44,446 4.7 48,044 -1.0
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1.3. Telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. and Other Businesses Telecommunications and other businesses showed an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of Euro 47 million (USD 42 million) in 2001. The year 2000 showed an operating loss of Euro 28 million (USD 25 million). Still, it is not possible to compare both results as this line of business incorporates, since 1st January 2001, the result of the Chilean mobile telephony Meaning "sound over distance," it refers to electronically transmitting the human voice. In the beginning, telephony dealt only with analog signals in the circuit-switched networks of the telephone companies. operator Smartcom An earlier family of communications programs for PCs and Macs from Hayes. Versions emulated several terminals and supported a variety of protocols, including the Hayes V-series. , while financial statements for the year 2000 incorporated its results since the month of July July: see month. . On the other hand, Smartcom has achieved a growing penetration The successful unauthorized breach of a security perimeter. See penetration test. in the Chilean market reaching a market share of 12.6% at the end of 2001, against 7.9% at the beginning of the year, and a customer base of 609,000 an amount 124% higher than one year ago. The results for telecommunications and new businesses are broken down as follows:
Euro
million
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Telecommunications -62
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Gas 25
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Cogeneration and renewables 15
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New businesses -16
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Structure costs and others -9
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TOTAL -47
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USD
million
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Telecommunications -55
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Gas 22
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Cogeneration and renewables 13
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New businesses -14
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Structure costs and others -8
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TOTAL -42
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2. Financial Results Financial results for the year 2001 were a net loss of Euro 1.72 billion (USD 1.53 billion) as broken down below:
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Euro million
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2001 2000 Change % change
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Financial expenses -1,628 -1,663 35 2.1
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Financial income 167 249 -82 -32.9
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FX differences -398 139 -537 N/A
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Monetary correction 141 150 -9 -6
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Change in provisions -4 -18 14 77.8
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Total financial results -1,722 -1,143 -579 -50.7
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USD Million
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2001 2000 Change % change
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Financial expenses -1,449 -1,480 31 2.1
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Financial income 149 222 -73 -32.9
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FX differences -354 124 -478 N/A
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Monetary correction 126 134 -8 -6
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Change in provisions -4 -16 12 77.8
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Total financial results -1,533 -1,017 -515 -50.7
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2.1 Financial Expenses Financial debt as of 31st December 2001 was Euro 25.01 billion (USD 22.26 billion), an increase of 3.07 billion (USD 2.73 billion) against 31st December 2000. Of this increase, Euro 560 million (USD 498 million) correspond to the accounting effect of the higher Euro value of foreign currency-denominated debt, mainly in dollars, which correspond to a large extent to the Latin American affiliates. Disregarding this effect, the increase in debt would be Euro 2.51 billion (USD 2.23 billion), mainly due to ENDESA's important strategic investments in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). during the year.Still, it is important to take into account that on 8 January 2002 the company collected the funds from the sale of Viesgo which together with the debt of Viesgo, brings a decrease in debt of Euro 1.91 billion (USD 1.70 billion). On the other hand, the lower average cost of debt, which went down from 6.47% in the year 2000 to 5.85% in 2001, enabled a reduction in financial expenses of Euro 35 million (USD 31 million), that is, 2.1%. The following table shows a breakdown of debt and its average cost by line of business in the year:
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Debt as of
EURO Million Average cost %
12-31-01
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Domestic electricity business 11,768 4.57
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International electricity business 11,525 7.02
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Telecommunications and other businesses 1,714 5.77
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TOTAL 25,007 5.85
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Debt as of
USD Million Average cost %
12-31-01
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Domestic electricity business 10,475 4.57
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International electricity business 10,258 7.02
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Telecommunications and other businesses 1,526 5.77
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TOTAL 22,259 5.85
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2.2 Foreign Exchange Differences In 2001 both the Chilean peso and the Brazilian real The real (IPA: [xe'aw] or [ʁe'aɫ], symbol: R$, ISO 4217 code: BRL, plural: reais) is the currency of Brazil. It is also the name of the earliest Brazilian currency (see from the Colonial period to 1942. suffered strong devaluations against the dollar.
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% Devaluation
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US$ Euro
Chilean peso 14.1 8.1
Brazilian real 18.7 12.4
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The devaluation against the US dollar has a negative impact on the financial statements in local currencies of the affiliates in their countries, as it increases the balance of their dollar-denominated debt and generates a foreign exchange loss in the income statement; on the other hand, the devaluation against the Euro has an impact on ENDESA's consolidated statements by reducing the Euro value of the equity of the affiliates in these countries. The above effects have had a negative impact of Euro 827 million (USD 736 million) on ENDESA's equity through the "Translation differences" account. Additionally, the impact on the income statement under the "Foreign exchange losses" footing was Euro 398 million (USD 354 million), with an effect on net income after taxes and minorities of Euro 117 million (USD 104 million). These amounts include the effect of the decision made by the Argentinean authorities in January 2002 to abandon abandon v. to intentionally and permanently give up, surrender, leave, desert, or relinquish all interest or ownership in property, a home or other premises, a right of way, and even a spouse, family, or children. the link of the peso's exchange rate with the US dollar, which has led to a devaluation of the Argentinean currency. Despite the devaluation's having take place in 2002, its effects have been accounted for in 2001 using an exchange rate of 1.7 pesos to the dollar, with an impact of Euro 260 million (USD 231 million) in the income statement under the "Foreign exchange losses" footing, with an impact of Euro 356 million (USD 317 million) in reserves and Euro 84 million (USD 75 million) in net income. 3 Equity Income Losses attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to ENDESA under the equity method were Euro 118 million (USD 105 million) for the period. The largest component of the equity losses is the one corresponding to AUNA AUNA Auditory Neuropathy, Autosomal Dominant 1 , with a loss of Euro 198 million (USD 176 million), which, apart from AUNA's ordinary income, incorporate the estimated cost of the disposal of Quiero TV. Still, from an operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. viewpoint, it is important to highlight the significant improvement in AUNA, in line with the targets set in the Strategic Plan 2001-2005, to the point that its EBITDA has been positive since May, which enabled a cumulative positive EBITDA for the year of Euro 129 million (USD 115 million). Other contributions to equity income include as the most significant one ENDESA Italia (Elettrogen), with a positive result of Euro 28 million (USD 25 million), corresponding to ENDESA's 45% stake, only for the last quarter of the year. It is important to highlight the positive performance of this company's operations, as well as the fact that ENDESA will soon increase its stake to above 50%, thereby leading to the full consolidation of the company in 2002. The rest of the equity income mainly corresponds to the positive results from Aguas de Barcelona Barcelona (bär'səlō`nə, Catalan bär'səlō`nə, Span. bär'thālō`nä), city (1990 pop. 4,738,354), capital of Barcelona prov. and chief city of Catalonia, NE Spain, on the Mediterranean Sea. , Red Electrica de Espana, Repsol, Snet and Tejo Energia Tejo Energia is a utility that operates the Pego Power Station. Tejo Energia is also one of the largest private sector companies in Portugal by asset value. It's headquarted in Paço de Arcos, near Oeiras. . 4. Amortisation Noun 1. amortisation - the reduction of the value of an asset by prorating its cost over a period of years amortization reduction, step-down, diminution, decrease - the act of decreasing or reducing something 2. of Goodwill Amortisation of goodwill in 2001 was Euro 289 million (USD 257 million), a 6.3% increase on 2000. This higher amount is due to the new investments made in 2001, which led to new goodwill amounts in ENDESA Italia of Euro 773 million (USD 688 million), in Snet of Euro 284 million (USD 253 million) and in Repsol of Euro 109 million (USD 97 million). 5. Extraordinary Results Extraordinary results for 2001 Euro 579 million (USD 515 million), a decrease of Euro 455 million (USD 405 million) against 2000. These results correspond mainly to the Euro 660 million (USD 587 million) capital gains on the sale of various holdings, among which ENDESA's direct and indirect holdings in the Argentinean Edenor (Euro 494 million or USD 440 million) and 12.5% of Viesgo, sold in December 2001 with a gross capital gain of Euro 152 million (USD 135 million). On the other hand, several extraordinary provisions were charged, which include Euro 114 million (USD 101 million) in Cerj to cover contingent liabilities Contingent Liability 1. The possibility of an obligation to pay certain sums dependent on future events. 2. Defined obligations by a company that must be met, but the probability of payment is minimal. Notes: 1. derived from pension commitments and other commitments with the workforce. 6. Taxation Total corporate tax charge for 2001 amounted to Euro 88 million (USD 78 million). This amount was influenced by two important events: - The cancellation of deferred tax charges of Euro 224 million (USD 199 million), as a result of the application of a 18% tax rate to capital gains affected by the regime on deferrals of reinvestments approved by Law 24/2001 of 27 December. - The tax exemption for the capital gains on the sale of Edenor. Disregarding the above effects, the resulting effective corporate tax rate would be 27.2%. 7. Information by Line of Business The table below shows the main parameters of the income statement and balance sheet of the first year 2001 by line of business.
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Euro million
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Revenues Operating Net Income Fixed
Income Assets
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Generation 4,149 1,018 663 8,484
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Distribution 5,129 730 334 6,819
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Supply 1,115 51 26 28
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International 5,125 1,423 489 13,466
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Telecommunications
and other
businesses 365 -47 -101 682
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Services 239 15 3 44
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Corporate Structure 350 -9 65 93
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USD Million
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Revenues Operating Net Income Fixed
Income Assets
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Generation 3,693 906 590 7,552
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Distribution 4,565 650 297 6,070
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Supply 992 45 23 25
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International 4,562 1,267 435 11,986
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Telecommunications
and other
businesses 325 -42 -90 607
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Services 213 13 3 39
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Corporate Structure 312 -8 58 83
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8. Cash Flow and Investments
Cash flow for the year was Euro 3.35 billion (USD 2.98 billion),
0.2% higher than in 2000. Investments in the period were Euro 5.45
billion (USD 4.85 billion) broken down as follows:
Euro
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Capital expenditures 2,403
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Intangibles 141
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Financial 2,902
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Total investments 5,446
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USD
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Capital expenditures 2,139
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Intangibles 126
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Financial 2,583
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Total investments 4,847
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The following table shows a breakdown of capital expenditures by
line of business:
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Euro Million
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Domestic International Telecoms and Total
Electricity Electricity Other
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Generation 555 242 797
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Distribution 591 690 1,281
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Other 65 46 214 325
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Total 1,211 978 214 2,403
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USD Million
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Domestic International Telecoms and Total
Electricity Electricity Other
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Generation 494 215 709
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Distribution 526 614 1,140
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Other 58 41 190 289
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Total 1,078 871 190 2,139
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8.1 Investments in the Domestic Electricity Business In 2001 ENDESA invested Euro 1.21 billion (USD 1.08 billion) in the Spanish electricity business, which represents around 58% of total estimated investment in the year in the electricity industry. Of the above amount, Euro 591 million (USD 526 million), that is, 48.8% of total investments, were in the distribution business in order to extend and improve the quality of service. This amount represents around 64% of the Spanish industry's total estimated investment in the electricity distribution activity in 2001. The company invested Euro 555 million (USD 494 million) in increasing the installed capacity, especially to the construction of new CCGT CCGT Combined Cycle Gas Turbine CCGT Chicago Center for Green Technology CCGT Combined-Cycle Generating Technology CCGT catalytic combustion gas turbine plants. 8.2 Financial Investments Financial investments amounting to Euro 2.90 billion (USD 2.58 billion) include the acquisitions of 45% of Elettrogen (ENDESA Italia) for Euro 999 million (USD 889 million) and 30% of the French SNET for Euro 452 million (USD 402 million); the capital increase of AUNA subscribed Subscribed Newly issued securities that an investor has agree to, or stated his intent to, buy in a public offering prior to the issue date. When an investor uses rights, he expects to own the designated number of shares they have subscribed to once the offering is completed. by ENDESA for Euro 498 million (USD 443 million), of which Euro 171 million (USD 152 million) were disbursed through the cancellation cancellation (See: cancel) CANCELLATION. Its general acceptation, is the act of crossing a writing; it is used sometimes to signify the manual operation of tearing or destroying the instrument itself. Hyde v. Hyde, 1 Eq. Cas. Abr. 409; Rob. of loans; and the additional acquisition of REPSOL shares for Euro 194 million (USD 173 million). These strategic investments were wholly financed with the proceeds from the disposals of EDENOR and VIESGO, which amounted to a cash inflow in·flow n. 1. The act or process of flowing in or into: an inflow of water; an inflow of information. 2. of Euro 2.71 billion (USD 2.41 billion), of which the amount corresponding to Viesgo was received on 8 January 2002. 8.3 Other Uses of Funds On the other hand, ENDESA acquired treasury stock during the year 2001, mainly in the third quarter, with a net cost of Euro 149.7 million (USD 133.2 million). This has brought treasury stock up from 0.3% as of 31st December 2000 to 1.2% as of 31 December 2001. As per current accounting regulations, a provision charge has been made against reserves to cover the difference between the cost of acquisition of these shares and their net book value for an amount of Euro 109 million (USD 97 million). Dividends paid against results from year 2000 were Euro 687 million (USD 611 million). Payments of provisions, mainly from externalization The ability to easily connect to and transfer information between business partners. Increasingly, information systems are designed to make their data available to outside partners and customers. This type of collaboration is expected to be a vital part of IT in the 21st century. See EDI. of pension and workforce restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). liabilities, were Euro 1.51 billion (USD 1.34 billion), of which Euro 667 million (USD 594 million) were financed through a deferred payment to the pension funds. |
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