ENDESA First Quarter 2004 Consolidated Results; Net Profit Was Euro 400 Million in January-March 2004.Energy Editors/Business Editors NEW YORK--(BUSINESS WIRE)--April 28, 2004 ENDESA (NYSE NYSE See: New York Stock Exchange :ELE ELE equine leukoencephalomalacia. ) ENDESA'S 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. TOTALLED EURO euro: see European Monetary System. euro Single currency of 15 countries of the European Union (EU), including Germany, France, and Italy. It is also the official currency in several areas outside the EU. 1,024 MILLION IN THE FIRST QUARTER OF 2004, AN INCREASE OF 18.5% WITH RESPECT TO 2003 ORDINARY PROFIT WAS EURO 736 MILLION, AN INCREASE OF 24.8% VERSUS THE SAME PERIOD OF 2003 CONFIRMING THE HIGH QUALITY OF THE COMPANY'S EARNINGS WHICH IN THIS PERIOD WERE ALL RECURRING re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. A LIKE FOR LIKE COMPARISON OF NET PROFIT, AFTER STRIPPING OUT CAPITAL GAINS AND EXTRAORDINARY PROVISIONS FROM THE RESULTS FOR THE FIRST QUARTER OF 2003, NET PROFIT INCREASED BY 74.7% IN THE FIRST QUARTER OF 2004 -- All ENDESA's businesses recorded net profit. Net profit from 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 business totalled Euro 286 million, that from the 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 electricity business Euro 24 million, that from the European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. electricity business Euro 45 million and that from other businesses also Euro 45 million. -- In addition, all the company's businesses recorded growth in operating profit compared to the first quarter of 2003: the Spanish electricity business by 27.4%, the electricity business in the rest of 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). by 15.9%, the Latin Americanelectricity business by 3.4% and other businesses by 116.7%. -- In the first quarter of 2004, the operating profit of ENDESA's Latin American electricity business increased in terms of euros despite the lower average exchange rate of the dollar against this currency when compared to the first quarter of 2003. In this sense, operating profit of Latin American business significantly reversed the trend seen in previous quarters. -- In the first quarter of 2004, ENDESA generated a total of 44,300 GWh of electricity in all the markets in which it operates 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. , the rest of Europe and 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. , an increase of 12.8% on the same period of 2003. Electricity sales in these same markets were 43,300 GWh, 7.4% more than in the first quarter of 2003. -- 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 (operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. ) totalled Euro 1,412 million in the first quarter of 2004, an increase of 12.2% with respect to 2003. -- The company's leverage ratio has remained stable, at 31 March 2004 it was 125.3% vs. 125.5% as of 31 December December: see month. , 2003, an improvement of 0.2 percentage points confirming progress towards the goal of reducing leverage included in the Strategic Plan for 2004-2008. -- At 31 March 2004, ENDESA's net debt was Euro 17,896 million. 92% of this was at fixed or hedged hedge n. 1. A row of closely planted shrubs or low-growing trees forming a fence or boundary. 2. A line of people or objects forming a barrier: a hedge of spectators along the sidewalk. rates, thereby minimizing risks from a possible rate hike in coming years. -- The Spanish telecoms operator Auna made a profit for the first time in the first quarter of 2004, which together with the good performance 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. company 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. led to a Euro 32 million increase in equity-consolidated earnings from these companies in the first quarter of 2004 versus the same period of 2003. -- At the beginning of March, ENDESA reached an agreement with Charbonnages de France Charbonnages de France is a French enterprise created in 1946, as a result of the nationalization of the private mining companies. External links
the French generator generator, in electricity, machine used to change mechanical energy into electrical energy. It operates on the principle of electromagnetic induction, discovered (1831) by Michael Faraday. SNET n. 1. The fat of a deer. v. t. 1. The clear of mucus; to blow. , in which ENDESA already held 30%, thereby increasing its shareholding to 65%. The European Commission approved this deal on April 21, so this now only requires the authorization The right or permission to use a system resource; the process of granting access. See access control. of the French State Holdings Agency. -- In the first quarter of 2004, ENDESA maintained its leadership of the Spanish electricity market, with a 44.9% market share in electricity generation in the ordinary regime, 42.2% in distribution and 41.7% in sales to end customers. -- In the first quarter of 2004, ENDESA's coal-fired Adj. 1. coal-fired - fueled by burning coal; "a coal-fired ship" coal-burning fueled - heated, driven, or produced by burning fuel power plants generated 9,193 GWh, 18.3% of peninsular pen·in·su·la n. Abbr. Pen. A piece of land that projects into a body of water and is connected with the mainland by an isthmus. [Latin paen electricity generation under the ordinary regime of the whole Spanish electricity sector. -- In the first quarter of 2004, which saw lower rainfall than in the same period of 2003, the Company's coal-fired plants provided one out of every five GWhs generated in the peninsula A peninsula is a piece of land that is bordered on three sides by water. A peninsula can also be a headland, cape, island promontory, bill, point, or spit.[1] Europe
guaranteeing coverage of demand. -- Tangible investment In contrast to stocks, bonds, and real estate (see equity investment), tangible investments are objects; there is a wide variety, including:
totalled Euro 127 million in the first quarter of 2004, a rise of 25.7% versus the same period of 2003, due to the efforts ENDESA is making on improving supply quality. -- Gas sales of companies in which ENDESA has a majority stake amounted to 3,850 GWh in the first quarter of 2004. Of this amount, 2,293 GWh was sold on the deregulated market and 1,557 GWh on the regulated market A regulated market is the provision of goods or services that is regulated by a government appointed body. The regulation may cover the terms and conditions of supplying the goods and services and in particular the price allowed to be charged. . -- Endesa 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. started the loading of Ralco Dam dam, barrier, commonly across a watercourse, to hold back water, often forming a reservoir or lake; dams are also sometimes used to control or contain rockslides, mudflows, and the like in regions where these are common. (Chile), a 570 MW facility whose generation will cover 9% of the Central Interconnected System (SIC). This plant will begin generating by mid 2004. ENDESA's (NYSE:ELE) net profit in the first quarter of 2004 was Euro 400 million, and its EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. Euro 0.38. No significant extraordinary results have been recorded in this quarter so virtually all net profit reflects earnings from the company's ordinary activities. On the contrary, in the first quarter of 2003 the company recorded capital gains from the sale of transmission assets to Red Electrica de Espana (REE) and certain real estate assets, whose impact on net profit for the period after the deduction deduction, in logic, form of inference such that the conclusion must be true if the premises are true. For example, if we know that all men have two legs and that John is a man, it is then logical to deduce that John has two legs. of extraordinary provisions made during this period totalled Euro 440 million. Stripping out this impact, recurring profit in the first quarter of 2003 was Euro 229 million. Consequently, a like for like comparison of net profit in the first quarter of 2004 with that for the same period of 2003, in other words Adv. 1. in other words - otherwise stated; "in other words, we are broke" put differently after stripping out extraordinary earnings in both periods, shows net profit increased by 74.7% in the first quarter of 2004. In the first quarter of 2004, ENDESA generated a total of 44,300 GWh of electricity in all the markets in which it operates, an increase of 12.8% on the same period of 2003, with electricity sales of 43,300 GWh, growth of 7.4% on the first quarter of 2003. All ENDESA's businesses recorded net profit in the first quarter of 2004. Net profit from the Spanish electricity business totalled Euro 286 million, that from the Latin American electricity business Euro 24 million, that from the European electricity business Euro 45 million and that from other businesses also Euro 45 million. Ordinary profit was Euro 736 million, an increase of 24.8% versus the same period of 2003 reflecting the high quality of the Company's earnings. Operating profit was Euro 1,024 million, an increase of 18.5% on the same period of 2003. Operating profit grew for all ENDESA's electricity businesses. Operating profit from the domestic electricity business was Euro 586 million, an increase of 27.4% on the same period of last year. In the rest of Europe this figure was Euro 124 million, an increase of 15.9%, and in Latin America it was Euro 301 million, an advance of 3.4%, while in the other businesses growth was 116.7% to Euro 13 million. In the first quarter of 2004, the operating profit of ENDESA's Latin American electricity business increased in terms of euros despite the lower average exchange rate of the dollar against this currency when compared to the first quarter of 2003. In this sense, operating profit of Latin American business significantly reversed the trend seen in previous quarters. ENDESA's leverage ratio at 31 March 2004 was stable at 125.3%, compared to 125.5% at 31 December 2003, an improvement of 0.2 percentage points. Accordingly, ENDESA has continued to make progress towards the target of reducing leverage included in the Strategic Plan 2004-2008. At 31 March 2004, ENDESA's net debt was Euro 17,896 million. 92% of this was at fixed or hedged rates, thereby eliminating risks from a possible rate hike in coming years. AUNA and Smartcom's results continued to perform well in the first quarter of 2004. The Spanish telecoms operator made a profit for the first time. This, allied to a good performance from Smartcom, led to a Euro 32 million increase in equity-consolidated earnings from these companies versus the same period of 2003. 1. Results analysis The table below shows the key figures from ENDESA's 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: P&L for the first quarters of 2004 and 2003.
Endesa key P&L data (Euro million)
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03/31/04 03/31/03 % Chg
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Revenue 4,246 3,927 8.1
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Operating cash flow 1,412 1,258 12.2
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Operating profit 1,024 864 18.5
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Ordinary profit 736 590 24.8
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Net profit 400 669 -40.2
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Cash flow 1,004 991 1.3
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1.1 Operating profit ENDESA posted revenue of Euro 4,246 million in the first quarter of 2004, an increase of 8.1% on the same period of 2003. Operating cash flow was Euro 1,412 million, an increase of 12.2% compared to the first quarter of 2003. Operating profit rose 18.5% to Euro 1,024 million. 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. for ENDESA's markets and businesses by revenue, cash flow, operating cash flow and operating profits.
Electricity business
Spain Europe Latin America Other
businesses
-------------- ------------- -----------------------------------------
Euro % Euro % Euro % Euro %
mill. total mill. total mill. total mill. total
-------------- ------ ------ ------ ------ ------ ------ ------ ------
Revenue 2,720 64.0 559 13.2 937 22.1 30 0.7
-------------- ------ ------ ------ ------ ------ ------ ------ ------
Operating cash
flow 837 59.3 154 10.9 400 28.3 21 1.5
-------------- ------ ------ ------ ------ ------ ------ ------ ------
Operating
profit 586 57.2 124 12.1 301 29.4 13 1.3
-------------- ------ ------ ------ ------ ------ ------ ------ ------
Cash flow 568 56.6 134 13.3 239 23.8 63 6.3
-------------- ------ ------ ------ ------ ------ ------ ------ ------
1.1.1. Electricity business in Spain ENDESA's Spanish electricity business made operating profits of Euro 586 million in the first three months of 2004, an increase of Euro 126 million in absolute terms (Alg.) such as are known, or which do not contain the unknown quantity. See also: Absolute or 27.4% in percentage terms on the same period last year. Euro 25 million of this increase came from the increase in the estimated useful life of the company's nuclear power plants from 30 to 40 years, resulting in smaller depreciation charges for these plants. Coinciding co·in·cide intr.v. co·in·cid·ed, co·in·cid·ing, co·in·cides 1. To occupy the same relative position or the same area in space. 2. To happen at the same time or during the same period. 3. with this change, ENDESA has begun to make a provision to cover the costs of dismantling dis·man·tle tr.v. dis·man·tled, dis·man·tling, dis·man·tles 1. a. To take apart; disassemble; tear down. b. these plants once their useful lives have concluded. In the first quarter of 2004, Euro 5 million has been provided for in this respect. Stripping out the effect of the change to the useful life of its nuclear plants, operating profit from the Spanish electricity business would have grown by 22.0%. The main factors driving operating profit growth in the Spanish electricity business were the 7.9% increase in energy generated, the average 1.7% increase in the regulated reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. 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 in 2004 versus 2003, the 8.8% increase in the average price to liberalized customers, and the fact that the increase in fuel costs was smaller than the increase in generation. Below a detailed breakdown of the various items is shown, comprising ENDESA's electricity operating profits. Revenues Revenues from the Spanish electricity business were Euro 2,720 million in the first quarter of 2004, a 10.1% increase from the year earlier. The breakdown by item was as follows.
Euro million
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03/31/04 03/31/03 Chg % Chg
--------------------------------------------- --------- -------- -----
Sales 2,473 2,285 188 8.2
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Technology CTC 143 107 36 33.6
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Coal CTC 24 19 5 26.3
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Services 80 59 21 35.6
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TOTAL 2,720 2,470 250 10.1
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Sales Sales in the Spanish electricity market were Euro 2,473 million, broken down as follows:
Euro million
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03/31/04 03/31/03 Chg % Chg
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Peninsular generation 706 633 73 11.5
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Distribution and supply at peninsular
tariff 955 931 24 2.6
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Supply to liberalized clients 426 324 102 31.5
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Non-peninsular systems 247 228 19 8.3
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Non-peninsular compensation 56 54 2 3.7
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Wholesale bilateral transactions 3 33 (30) -90.9
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Gas 57 48 9 18.8
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Others 23 34 (11) -32.4
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TOTAL 2,473 2,285 188 8.2
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In the first quarter of 2004, ENDESA maintained its leadership of the Spanish electricity market, with a 44.9% market share in ordinary regime electricity generation, 42.2% in distribution and 41.7% in sales to end customers. Peninsular generation In the first three months of 2004, electricity demand on the Iberian peninsula Iberian Peninsula, c.230,400 sq mi (596,740 sq km), SW Europe, separated from the rest of Europe by the Pyrenees. Comprising Spain and Portugal, it is washed on the N and W by the Atlantic Ocean and on the S and E by the Mediterranean Sea; the Strait of Gibraltar grew 4.4% with respect to the same period of 2003. However, ordinary regime generation grew more, by 4.9%, as a result of the decline in the balance of international exchanges and the 10.1% increase in special regime generation. In the first quarter of 2004, ENDESA generated 20,842 GWh of the electricity sold on the wholesale market, representing a rise of 7.7% on the same period of 2003. This represents a market share of 41.5%. In the first quarter of 2004, ENDESA's coal-fired power plants generated 9,193 GWh, 18.3% of peninsular electricity generation under the ordinary regime of the whole Spanish electricity sector. This means that in periods of lower than average rainfall such as the first quarter of 2004, the Company's coal-fired plants provided one out of every five GWhs generated in the peninsula, thereby making a significant contribution to guaranteeing coverage of demand. Meanwhile, ENDESA companies operating under the special regime generated 1,470 GWh in the first quarter of 2004. Earnings from this activity are recorded under "Other businesses." Of this amount, 903 GWh were generated by installations exploiting renewable energy Renewable energy utilizes natural resources such as sunlight, wind, tides and geothermal heat, which are naturally replenished. Renewable energy technologies range from solar power, wind power, and hydroelectricity to biomass and biofuels for transportation. in which ENDESA has an interest, a 13.3% increase on the first quarter of 2003. ENDESA's generation sales on the peninsula rose 11.5% due to the increase in generation mentioned above and the 2.3% rise in the average pool price in the first quarter of 2004 compared to the same period of 2003. In absolute terms, the average pool price for the first quarter of 2004 was Euro cents 3.14 per kWh. The table below shows the structure of peninsular electricity generation for ENDESA and the sector as a whole in the first quarters of 2004 and 2003:
Peninsular electricity generation structure of Endesa and the Spanish
sector (%)
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ENDESA Sector
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1Q04 1Q03 1Q04 1Q03
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Nuclear 33.5 34.4 30.9 31.6
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Coal 44.1 42.5 36.6 32.7
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Hydro 14.1 17.7 19.2 29.8
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CCGT 7.0 4.2 11.4 4.2
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Fuel-gas 1.3 1.2 1.9 1.7
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Total 100 100 100 100
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The figures in the table above reflect the stability of ENDESA's generation mix in respect of fluctuations in rainfall levels, indicating that the company is not so exposed to the unstable unstable, adj 1. not firm or fixed in one place; likely to move. 2. capable of undergoing spontaneous change. A nuclide in an unstable state is called radioactive. An atom in an unstable state is called excited. regime of hydro hy·dro adj. Hydroelectric. n. pl. hy·dros 1. Hydroelectric power. 2. A hydroelectric power plant. contributions which exists on the peninsula as other companies. Distribution and supply at peninsular tariff ENDESA distributed 21,028 GWh of electricity in the peninsular market in the first quarter of 2004, of which 14,522 Gwh were supplied to regulated tariff customers. Endesa's distribution tolls and energy sales on the peninsular market increased by 2.6% compared to the same period of 2003. This increase was mainly the result of a 0.3% rise in energy supplied at tariff and the 1.2% hike in the price of energy acquired from the pool, which automatically feeds through to revenue billed to regulated customers. The gross distribution margin, measured as the difference between energy sales and purchases in this activity, amounted to Euro 339 million in the first quarter of 2004, an increase of 4.0% on the same period of 2003. Supply to liberalized clients In the first quarter of 2004, ENDESA sold 7,158 GWh to clients on the deregulated market, an increase of 21.1% from 2003 . This increase breaks down as follows: 15.4% in areas in which ENDESA acts as distributor, 11.6% in other areas and 87.3% to clients in other European countries. The rise in energy sold, together with the 8.8% increase in the average price, allowed for growth of 31.5% in sales of this activity, to Euro 426 million. Non-peninsular systems ENDESA's output in non-peninsular systems was 3,106 GWh in the first quarter of 2004, 8% more than in the same period of 2003. Demand rose 8.2% in the system as a whole. Sales on these markets in the period were Euro 247 million, representing growth of 8.3% from the first quarter of 2003, basically as a result of this rise in demand. In addition, the company received Euro 56 million in compensation, Euro 2 million more than in the first quarter of 2003. Gas Gas sales in the first quarter of 2004 amounted to Euro 57 million, an increase of 18.8% compared to the same period of last year. Gas sales of companies in which ENDESA has a majority stake amounted to 3,850 GWh in the first quarter of 2004. Of this amount, 2,293 GWh was sold on the deregulated market and 1,557 GWh on the regulated market. The 3,850 GWh sold together with the 3,395 GWh consumed con·sume v. con·sumed, con·sum·ing, con·sumes v.tr. 1. To take in as food; eat or drink up. See Synonyms at eat. 2. a. in generation amount to a total of 7,245 GWh, an 8.3% share of the Spanish market. CTC CTC - Cornell Theory Center In the first quarter of 2004, system revenues were sufficient to cover all the system's recognized costs, allowing for the payment of Euro 270 million in stranded strand 1 n. The land bordering a body of water; a beach. v. strand·ed, strand·ing, strands v.tr. 1. To drive or run ashore or aground. 2. costs (CTC). Of this amount, Euro 143 million correspond to ENDESA, Euro 36 million more than in the first quarter of 2003. Operating costs operating costs npl → gastos mpl operacionales The table below shows the breakdown of operating costs for ENDESA's Spanish electricity business in the first quarters of 2004 and 2003.
Euro million
03/31/04 03/31/03 Chg % Chg
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Purchases 1,534 1,418 116 8.2
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Energy purchases 1,010 926 84 9.1
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Raw materials 374 358 16 4.5
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Transmission and other external costs 150 134 16 11.9
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Depreciation 251 256 (5) -2.0
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Provisions 8 7 1 14.3
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Personnel 211 208 3 1.4
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Other operating expenses 184 169 15 8.9
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TOTAL 2,188 2,058 130 6.3
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Purchases Purchases from January January: see month. to March 2004 in the Spanish electricity business were Euro 1,524 million, an increase of Euro 116 million or 8.2% on the first quarter of 2003. This was due mainly to the following factors: -- Energy purchases made by ENDESA's distributor and supplier for client sales increased by Euro 84 million or 9.1% compared to the corresponding period of 2003. This increase was mainly the result of a 6.5% rise in energy supplied to both tariff and deregulated clients and the 1.2% increase in the average price of the energy acquired. -- Gas purchases for client sales increased by Euro 8 million or 23.5% due to the 18.8% increase in gas sales. -- Fuel costs for electricity generation rose by Euro 26 million, accounting for a 7.7% increase over the first quarter of 2003. Depreciation In recent months a study has been carried out in the European electricity sector into the remaining useful life of nuclear plants based on their current situation taking into account the investments made in recent years. As a result of this study, it was concluded that these plants were technically viable for a total period of 40 years compared to the 30-year period over which they were being depreciated Depreciated may refer to:
Accounting regulations establish that when a change is made to the estimated useful life of plant this shall be reflected by adjusting the depreciation charges over the remaining useful life of the installation. 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 this, since 1 January 2004 ENDESA has been depreciating de·pre·ci·ate v. de·pre·ci·at·ed, de·pre·ci·at·ing, de·pre·ci·ates v.tr. 1. To lessen the price or value of. 2. To think or speak of as being of little worth; belittle. its nuclear plants on the basis of a useful life of 40 years. This change in the estimated useful life of the company's nuclear power stations This is a list of major nuclear power plants in all countries in the world. This is an incomplete list. You can help Name of power station Installed capacity in MW Country Atucha I nuclear power plant 357 Argentina has resulted in a Euro 25 million smaller depreciation charge in the first quarter of 2004 than would have been the case if depreciation had been continued over 30 years. Despite this, the depreciation charge for the Spanish electricity business has only declined by Euro 5 million due to the depreciation of the investments made in 2003 and the Euro 6 million increase in the depreciation of assets to be recovered via CTCs applying their foreseeable fore·see tr.v. fore·saw , fore·seen , fore·see·ing, fore·sees To see or know beforehand: foresaw the rapid increase in unemployment. recovery path. The net impact of this change in the estimated useful life of the company's nuclear power stations, together with the beginning of the provision for their dismantling, on ENDESA's net profit in the first quarter of 2004 was very small, around Euro 13 million, or 3%. Personnel expenses At 31 March 2004, ENDESA's Spanish electricity business employed 13,593 employees, a reduction of 58 with respect to 31 December 2003. In the first quarter of 2004, personnel expenses totalled Euro 211 million, an increase of 1.4% on 2003. Other 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. Other operating expenses totalled Euro 184 million in the first quarter of 2004, an increase of Euro 15 million with respect to 2003. This increase was due mainly to the Euro 7 million increase in repairs and maintenance as a result of plans aimed at boosting the quality of supply and the Euro 8 million increase in tax from the increase in the public thoroughfare THOROUGHFARE. A street or way so open that one can go through and get out of it without returning. It differs from a cul de sac, (q.v.) which is open only at one end. 2. Whether a street which is not a thoroughfare is a highway, seems not fully settled. levy To assess; raise; execute; exact; tax; collect; gather; take up; seize. Thus, to levy a tax; to levy a Nuisance; to levy a fine; to levy war; to levy an execution, i.e., to levy or collect a sum of money on an execution. A seizure. because of higher sales and the environmental tax which has begun to be levied in Andalusia Andalusia, city, United States Andalusia (ăndəl  `shə, –zhə), city (1990 pop. 9,269), seat of Covington co., S Ala., in a farming and forestry area; inc. .1.1.2. Electricity business in Europe Operating profit from the electricity business in Europe totalled Euro 124 million in the first quarter of 2004, an increase of 15.9% with respect to 2003. In both the first quarter of 2004 and in 2003, practically all these earnings came from ENDESA Italia . Figures for sales and purchases of energy include bilateral bilateral /bi·lat·er·al/ (-lat´er-al) having two sides, or pertaining to both sides. bi·lat·er·al adj. 1. Having or formed of two sides; two-sided. 2. wholesale operations carried out on the European market whose results were neutral. These operations declined Euro 44 million in the first quarter of 2004 compared to the same period of 2003. The following table shows changes in ENDESA Italia's operating profit between the first quarter of 2004 and the first quarter of 2003.
Endesa Italia key data
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Euro million
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03/31/04 03/31/03 Chg Chg %
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Revenues 387 367 20 5.5
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Capitalized expenses 4 3 1 33.3
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Other revenues 2 1 1 100
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Energy purchases (14) (22) 8 -36.4
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Raw materials (186) (179) (7) 3.9
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Electricity transmission costs (1) (1) - -
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Personnel expenses (16) (16) - -
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Depreciation (30) (27) (3) 11.1
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Other expenses (20) (16) (4) 25.0
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Operating profit 126 110 16 14.6
------------------------------------------------- --------- --- ------
ENDESA Italia's revenues were 5.5% higher in the first quarter of 2004 than in the same period of 2003, due to a 16.0% increase in electricity sold and a 14.6% decrease in the average sale price caused by the tariff revision (programming) revision - A release of a piece of software which is not a major release or a bugfix, but only introduces small changes or new features. approved by the Electricity and Gas Authorities. Meanwhile, this same regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. body approved through the resolution number 8/04 dated on February February: see month. 5th the compensation for the purchase of "green certificates" in prior years, having a positive effect of Euro 18 million over Endesa Italia's revenues. Endesa Italia sold 5,777 GWh of electricity in the first quarter of 2004, of which 393 GWh was acquired from third parties for a cost of Euro 14 million. ENDESA Italia's output was 5,394 GWh in the first quarter of 2004, an increase of 768 GWh or 16.6% on the same period of 2003. This increase in output was the result of a 48 GWh decline in hydro production and a 816 GWh increase in thermal-fired electricity. The latter, together with higher fuel prices, led to a Euro 8 million increase in fuel costs. At the beginning of last August, ENDESA reached an agreement with Charbonnages de France (CDF) to acquire an additional 35% of the French generator SNET, in which ENDESA already held 30%. The European Commission European Commission, branch of the governing body of the European Union (EU) invested with executive and some legislative powers. Located in Brussels, Belgium, it was founded in 1967 when the three treaty organizations comprising what was then the European Community approved this deal on April 21, so this now only requires the authorisation of the French State Holding Agency. Once this operation has been completed, ENDESA will own 65% of SNET so the latter's results will be fully consolidated instead of equity accounted as has been the case to date. 1.1.3. Electricity business in Latin America Operating profit from the electricity business in Latin America totalled Euro 301 million in the first quarter of 2004, an increase of 3.4% with respect to 2003. Growth was underpinned by improved economic trends in the countries where ENDESA operates, which were first seen in 2003. This business's operating profit has grown in euros despite this currency's average exchange rate experienced a 16.3% appreciation vis-a-vis the dollar between the first quarters of 2003 and 2004 and the fact that a significant portion of revenues from Latin America, primarily from generation and the interconnection in·ter·con·nect v. in·ter·con·nect·ed, in·ter·con·nect·ing, in·ter·con·nects v.intr. To be connected with each other: The two buildings interconnect. v.tr. between 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. and 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. , are linked to the US$. Measured in dollars, the operating profit of the Latin American electricity business in the first quarter of 2004 increased by 20.2%. This operating profit performance demonstrates the basis strength of ENDESA's Latin American electricity business and the favourable operating performance of its subsidiaries in the region. The table below shows the generation and distribution figures of ENDESA's Latin American subsidiaries in the first quarter of 2004 compared to the same period in 2003.
Generation Distribution
(GWh) (GWh)
-------------------------------------------------------- -------------
1Q04 % Chg 1Q04 % Chg
vs vs
1Q03 1Q03
------------------------------------------------- ------ ------- -----
Chile 3,953 -8.3 2,721 8.9
------------------------------------------------- ------ ------- -----
Colombia 2,834 12.5 2,357 5.3
------------------------------------------------- ------ ------- -----
Argentina 4,139 70.2 3,439 8.6
------------------------------------------------- ------ ------- -----
Brazil 1,309 166.1 3,390 1.2
------------------------------------------------- ------ ------- -----
Peru 1,257 -3.2 1,041 4.2
------------------------------------------------- ------ ------- -----
TOTAL 13,492 22.1 12,948 5.6
------------------------------------------------- ------ ------- -----
The table below sets out the operating cash flow and operating profit of ENDESA's Latin American electricity business, broken down by activity:
Euro million
----------------------------------------------------------------------
Operating cash Operating
flow profit
------------------------------------------------------ ---------------
1Q04 1Q03 % Chg 1Q04 1Q03 % Chg
------------------------------------------- ---- ----- ---- ---- -----
Genco and transmission 245 257 -4.7 191 198 -3.5
------------------------------------------- ---- ----- ---- ---- -----
Distribution 170 146 16.4 125 102 22.5
------------------------------------------- ---- ----- ---- ---- -----
Others (15) (9) N/A (15) (9) N/A
------------------------------------------- ---- ----- ---- ---- -----
Total 400 394 1.5 301 291 3.4
------------------------------------------- ---- ----- ---- ---- -----
The following table shows the operating cash flow and operating profit of Latin American power generation and distribution businesses in the first quarter of 2004 compared to the same period in 2003, broken down by the countries where ENDESA operates through fully consolidated subsidiaries.
Operating cash Operating profit
flow
----------------------------------------------------- ----------------
1Q04 1Q03 % Chg 1Q04 1Q03 % Chg
----------------------------------------- ---- ------ ---- ---- ------
Genco and transmission
----------------------------------------- ---- ------ ---- ---- ------
Chile 79 81 -2.5 60 59 1.7
----------------------------------------- ---- ------ ---- ---- ------
Colombia 53 44 20.5 42 34 23.5
----------------------------------------- ---- ------ ---- ---- ------
Brazil - Generation 16 11 45.5 13 9 44.4
----------------------------------------- ---- ------ ---- ---- ------
Brazil - Transmission 27 50 -46.0 23 46 -50.0
----------------------------------------- ---- ------ ---- ---- ------
Peru 33 36 -8.3 23 23 -
----------------------------------------- ---- ------ ---- ---- ------
Argentina - Generation 33 31 6.5 26 24 8.3
----------------------------------------- ---- ------ ---- ---- ------
Argentina - Transmission 4 4 - 4 3 33.3
----------------------------------------- ---- ------ ---- ---- ------
----------------------------------------- ---- ------ ---- ---- ------
TOTAL Genco and transco 245 257 -4.7 191 198 -3.5
----------------------------------------- ---- ------ ---- ---- ------
----------------------------------------- ---- ------ ---- ---- ------
Distribution
----------------------------------------- ---- ------ ---- ---- ------
Chile 37 34 8.8 33 30 10.0
----------------------------------------- ---- ------ ---- ---- ------
Colombia 48 30 60.0 32 15 113.3
----------------------------------------- ---- ------ ---- ---- ------
Brazil 50 44 13.6 37 33 12.1
----------------------------------------- ---- ------ ---- ---- ------
Peru 18 18 - 12 11 9.1
----------------------------------------- ---- ------ ---- ---- ------
Argentina 17 20 -15.0 11 13 -15.4
----------------------------------------- ---- ------ ---- ---- ------
TOTAL Distribution 170 146 16.4 125 102 22.5
----------------------------------------- ---- ------ ---- ---- ------
The main factors responsible for the performance of these items by country are explained below. Chile Operating profit from the Chilean generation business totaled Euro 60 million, a 1.7% increase on the first quarter of 2003, despite earnings for this latter period including those from the Canutillar power plant, which was subsequently sold. In the first quarter of 2003, this plant produced a total of 234 GWh and generated operating profit of Euro 3 million. Under like-for-like conditions, in other words excluding earnings from Canutillar, the operating profit of ENDESA's business in Chile grew 7.1% in the first quarter of 2004. The increase in sales obtained in the first quarter of 2004 was offset by a similar increase in energy purchases. The operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: has had to absorb absorb To offset sell orders or a new security offering with buy orders. Euro 7 million in higher fuel and energy transmission costs. Meanwhile, the depreciation of the Chilean peso against the dollar in the first quarter of 2004 allowed for a Euro 5 million increase in capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. expenses compare to the same period last year. Lastly, Euro 3 million less were allocated to depreciation and amortization than in the first quarter of 2003. Operating profit in the Chilean distribution business totalled Euro 33 million, a 10% increase from the previous year. This rise was fuelled by a Euro 9 million increase in the contribution margin (i.e. the difference between revenues and energy purchases), accompanied ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. by a Euro 6 million increase in fixed costs fixed costs, n.pl the costs that do not change to meet fluctuations in enrollment or in use of services (e.g., salaries, rent, business license fees, and depreciation). . Endesa Chile has started loading the dam of the hydro plant at Ralco, a 570 MW facility accounting for 15% of the company's total capacity. The plant will start operations in the middle of this year and will meet 9% of the Central Interconnected System's (SIC) requirements. Finally, the Chilean Government has recently decided to increase the node node, in astronomy, point at which the orbit of a body crosses a reference plane. One reference plane that is often used is the plane of the earth's orbit around the sun (ecliptic). price of the Central Interconnected System (SIC) to be paid in Alto alto, singing voice the range of which is lower than the soprano by the interval of a fifth. More generally, the term refers to the register in which this voice sings, i.e. Jahuel by 18.8% in US$ due to uncertainty over the supply of natural gas from Argentina. Colombia Colombia (kəlŭm`bēə, Span. kōlōm`byä), officially Republic of Colombia, republic (2005 est. pop. 42,954,000), 439,735 sq mi (1,138,914 sq km), NW South America. Bogotá is the capital and largest city. Operating profit in the Colombian generation business amounted to Euro 42 million, a 23.5% increase from the first quarter of 2003. The entire increase was due to the higher gross margin, thanks to a Euro 6 million increase in revenues and a Euro 5 million decrease in energy purchases and raw materials, while electricity transmission costs were Euro 3 million higher. The distribution business in Colombia contributed Euro 32 million in operating profits versus Euro 15 million in the first quarter of 2003. This improvement was driven by a 19.6% increase in the electricity tariff, which, coupled with growth in energy sales, led to a Euro 26 million rise in revenues while energy purchases only increased by Euro 5 million. Brazil The Brazilian generation business recorded operating profit of Euro 13 million versus Euro 9 million in the first quarter of 2003. The increase derived de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. from the start-up Start-up The earliest stage of a new business venture. of the Fortaleza Fortaleza (f rtəlĕ`zə), city (1996 pop. 1,967,365), capital of Ceará state, NE Brazil, a port on the Atlantic Ocean. thermal thermal /ther·mal/ (ther´m'l) pertaining to or characterized by heat. ther·mal adj. 1. Of, relating to, using, producing, or caused by heat. 2. plant, which contributed operating profits of Euro 9 million. Meanwhile, operating profit from Cachoeira Dourada Cachoeira Dourada is a small town and municipality in south-central Goiás state, Brazil. The population was 8,539 (2005 estimate) in a total area of 732 km².
adj. Of, relating to, or constituting a precaution: taking precautionary measures; gave precautionary advice. Adj. 1. Measures ordered by the Brazilian courts stemming stemming - stemmer from CELG's lawsuit lawsuit: see procedure; tort. over its contract with this company. We would point out that although the Precautionary Measure provides that the contract will be provisionally pro·vi·sion·al adj. Provided or serving only for the time being. See Synonyms at temporary. n. 1. A person hired temporarily for a job, typically before having taken an examination qualifying the person for permanent paid up for a smaller amount than that established, the court has forced CELG to provide guarantees for the full amount laid down in the contract. Operating profit from the Brazilian distribution business totalled Euro 37 million, a 12.1% increase compared to the same period last year. Revenues advanced Euro 52 million (+31%) thanks to the 31% increase in tariffs This is a list of tariffs and trade legislation:
Operating profit deriving de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. from the interconnection between Brazil and Argentina was Euro 23 million, half the figure obtained in the first quarter of 2003. As revenues from this interconnection are indexed to the US$, the depreciation of the dollar against the euro with respect to the first quarter of last year, coupled with the renegotiation of the COPEL COPEL Companhia Paranaense de Eletricidade contract, led to a decline in revenues in euros, which explains the fall in operating profit. Peru Operating profit from the generation business in Peru totalled Euro 23 million, the same as in the first quarter of 2003. The only noteworthy change was the Euro 4 million decrease in depreciation and amortization caused by the Peruvian sol's depreciation against the euro between the first quarters of 2003 and 2004, which offset the decline in gross margin measured in euros. Despite the currency's 13.7% depreciation, operating profit in euros was broadly flat, thanks to an 17.4% increase in operating profit in local currency. Operating profit from Peruvian distribution amounted to Euro 12 million, a 9.1% increase from the first quarter of 2003. The entire increase was the result of a Euro 4 million decline in fixed costs compensating the Euro 3 million decline in gross margin. Argentina Argentine Argentine having some relationship with the country Argentina. Argentine tick margaropuswinthemi. Argentine tortoise geochelonechilensis. generation produced operating profit of Euro 26 million, 8.3% more than in the same period last year. The increase was driven by a Euro 1 million rise in the gross margin and an equal decline in fixed costs. In distribution, operating profit in Argentina totalled Euro 11 million in the first quarter of 2004, Euro 2 million less than in the same period of 2003. This decline was caused by the Euro 8 million increase in the cost of energy purchased versus the Euro 5 million rise in revenues. Meanwhile, fixed costs were Euro 1 million lower. 1.2. Financial results ENDESA reported financial losses of Euro 230 million in the first quarter of 2004, compared to Euro 187 million in the same period of 2003. These break down as follows:
Euro million
--------------------------------------------------------------- ------
1Q04 1Q03 Chg % Chg
---------------------------------------------------- ----- ---- ------
Financial revenues 45 58 (13) -22.4
---------------------------------------------------- ----- ---- ------
Financial expenses (355) (355) - -
---------------------------------------------------- ----- ---- ------
Foreign exchange differences 43 64 (21) -32.8
---------------------------------------------------- ----- ---- ------
Monetary correction 41 46 (5) -10.9
---------------------------------------------------- ----- ---- ------
Change in provisions (4) - (4) N/A
---------------------------------------------------- ----- ---- ------
Total financial result (230) (187) (43) -23.0
---------------------------------------------------- ----- ---- ------
1.2.1. Financial expenses Financial expenses in the first three months of the year totalled Euro 355 million, in line with the year-earlier figure. Of this amount, Euro 275 million correspond to debt interest and commission, compared to Euro 315 million in the first quarter of 2003, a 12.7% reduction. The rest corresponds to the financial updating of provisions and expenses mainly those associated with 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 financial operations. ENDESA's total debt had an average cost of 5.62% versus 5.20% in the first quarter of 2003. The rise was sharper at the ENERSIS ENERSIS Energy Systems and Infrastructure Group, from 7.38% to 8.90%. The average cost of ENDESA's debt ex ENERSIS was 4.40%, versus 4.33% in the first quarter of 2003. The higher average cost of debt was due to the hedging hedging, in commerce, method by which traders use two counterbalancing investment strategies so as to minimize any losses caused by price fluctuations. It is generally used by traders on the commodities market. policy followed in 2003, which enabled the Group to have 92% of its debt at a fixed or hedged interest rate for an average period of 4 years, and to the extension of the average life of its debt to 5.2 years. In this way, the company eliminates the risk of the potential impact of a rise in interest rates on the P&L and diminishes refinancing risk In banking and finance, refinancing risk is the possibility that a borrower cannot refinance by borrowing to repay existing debt. Many types of commercial lending incorporate bullet payments at the point of final maturity; often, the intention or assumption is that the borrower by extending the average life of its debt in exchange for bearing a higher cost of debt. The table below gives a breakdown of Group debt by business area and its average cost in the first quarter of 2004:
Debt Debt Average
(Euro million) 03/31/04 03/31/03 Chg cost
1Q04
(%)
----------------------------------------------- -------- ----- -------
Spanish electricity business 6,548 6,429 119 5.21
----------------------------------------------- -------- ----- -------
Latin American electricity business 6,493 6,560 (67) 7.66
----------------------------------------------- -------- ----- -------
ENERSIS 4,676 4,630 46 8.90
----------------------------------------------- -------- ----- -------
Others 1,817 1,930 (113) 4.29
----------------------------------------------- -------- ----- -------
European electricity business 2,533 2,437 96 2.70
----------------------------------------------- -------- ----- -------
Other businesses 2,322 1,824 498 3.58
----------------------------------------------- -------- ----- -------
TOTAL 17,896 17,250 646 5.62
----------------------------------------------- -------- ----- -------
However, net debt at 31 March 2004 stood at Euro 17,896 million, an increase of Euro 646 million compared to the 31 December 2003 figure. This rise was due to the following factors: -- The negative impact of the euro's exchange rate against the dollar, which produced an increase of Euro 167 million in the group's dollar-denominated debt (mainly through ENERSIS). -- The Euro 261 million investment for the acquisition of an additional 3% of AUNA. -- The net acquisition of 6.8 million of the company' own shares, which required an investment of Euro 98 million. At 31 March 2004 ENDESA holds 8.9 million shares in treasury stock, equivalent to 0.84% of share capital. -- After the dividend payment, working capital increased by Euro 111 million. This increase recurs in the first quarter of each year as a result of the cyclical cyclical Of or relating to a variable, such as housing starts, car sales, or the price of a certain stock, that is subject to regular or irregular up-and-down movements. impact of some expenses and investments in the last quarter of the year and paid in the first quarter of the ensuing en·sue intr.v. en·sued, en·su·ing, en·sues 1. To follow as a consequence or result. See Synonyms at follow. 2. To take place subsequently. year. Previous years' experience shows that this increase in working capital is adjusted in the last quarter of each year. If we look at the change in working capital between 31 March 2003 and 31 March 2004, we observe TO OBSERVE, civil law. To perform that which has been prescribed by some law or usage. Dig., 1, 3, 32. a decline of Euro 497 million. 1.2.2. Foreign exchange differences Net forex differences in the first quarter of 2004 produced a gain of Euro 43 million. Of this amount, Euro 77 million was due to the cancellation of debt in US$ held in Spain so these are realised forex differences. Meanwhile, the Chilean peso's 3.67% depreciation against the dollar led to negative forex differences of Euro 33 million. It is worth mentioning that from 1 January 2004, ENDESA has adapted its dollar debt hedging policies, both financial and accounting, to IAS See iPlanet Application Server. 1. (computer) IAS - The first modern computer. It had main registers, processing circuits, information paths within the central processing unit, and used Von Neumann's fetch-execute cycle. . Accordingly, it has substituted the hedging policy based A decision made by any software application that is based on the policy (rules and regulations) of the organization. See policy and COPS. on the correlation correlation In statistics, the degree of association between two random variables. The correlation between the graphs of two data sets is the degree to which they resemble each other. of currencies to one based on converting revenues into dollars; i.e. cash flow hedge A cash flow hedge is a hedge of the exposure to the variability of cash flow that
In accordance with this criteria criteria (krītēr´ē  ),n. , debt hedges are considered to be debt in US$ to finance assets that produce revenues in dollars or tied to the dollar. Exchange differences, both positive and negative, arising from this debt are directly recorded against equity and then taken to income as the dollar revenues it covers are obtained. This situation is mostly evidenced in the generation business in Latin America and the interconnection between Brazil and Argentina. To adapt to this policy, ENDESA repaid US$ 296 million of the debt held by ENDESA in Spain in the first quarter of 2004, generating positive forex differences of Euro 77 million. Additional switch over to local currencies from US$ denominated debt of the Latin American subsidiaries is expected. 1.3. Equity income In the first quarter of 2004 the key aspect as regards equity accounted companies is the improvement in results of the telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. business. Spanish operator AUNA contributed Euro 1 million in profits from ENDESA's shareholding and the Chilean mobile company Smartcom posted a loss of just Euro 1 million, signalling improvements of Euro 23 million and Euro 9 million, respectively, versus their contributions in the first quarter of 2003. At 31 March 2003, Auna had 8,470,000 mobile phone clients (310,000 more than at 31 December 2003) and more than 660,000 cable network clients (24,000 more than at 31 December 2003). At 31 March 2004, the 32.89% stake in AUNA had a book value of Euro 1,273 million. Smartcom had 1,220,000 clients at 31 March 2004, 50,000 more than at the end of 2003. Earnings of equity-consolidated companies attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to Endesa were Euro 19 million, an improvement of Euro 32 million versus the first quarter of 2003. The main items of this amount correspond to the assets of the European electricity business in which ENDESA has an interest of less than 50% and whose results, accordingly, are recorded by the equity method. Specifically, earnings from these assets totalled Euro 7 million in the first quarter of 2004, of which Euro 4 million correspond to the Portuguese generator 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. . 1.4. Extraordinaries It should be pointed out that thanks to the performance of the Argentine peso The peso (originally established as the nuevo peso argentino or peso convertible) is the currency of Argentina. Its ISO 4217 code is ARS, and the symbol used locally for it is $ (to avoid confusion, Argentines frequently use US$, against the euro and the results recorded by the group's Argentinean subsidiaries, the total book value of these investments has increased by Euro 17 million during this period. ENDESA, following prudent accounting policies, continues to assign a value of zero to its investments in this country. Therefore, in the first quarter of 2004 the group provisioned Euro 17 million, on top of that already made at 31 December 2003, which was recorded under the extraordinary income caption in the consolidated P&L account. Therefore, ENDESA's balance sheet at 31 March 2004 included a provision of Euro 198 million to cover the full risk of investment and loans in Argentina. Apart from the allocation The apportionment or designation of an item for a specific purpose or to a particular place. In the law of trusts, the allocation of cash dividends earned by a stock that makes up the principal of a trust for a beneficiary usually means that the dividends will be treated as to this provision, extraordinary results for the first quarter of 2004 do not include any other significant item. Conversely con·verse 1 intr.v. con·versed, con·vers·ing, con·vers·es 1. To engage in a spoken exchange of thoughts, ideas, or feelings; talk. See Synonyms at speak. 2. , extraordinary results for the first quarter of 2003 amounted to Euro 528 million due to extraordinary capital gains and provisions. These atypical atypical /atyp·i·cal/ (-i-k'l) irregular; not conformable to the type; in microbiology, applied specifically to strains of unusual type. a·typ·i·cal adj. results had an impact of Euro 440 million on net income for this period. 2. Information by business line The table below shows ENDESA's main P&L and balance sheet figures in the first quarter of 2004, with a breakdown by business line.
Euro million
----------------------------------------------------------------------
Revenue Operating Net Fixed
profit profit tangible
assets
------------------------------------------ --------- ------- ---------
Generation 1,090 316 180 8,119
------------------------------------------ --------- ------- ---------
Distribution 1,356 169 102 6,795
------------------------------------------ --------- ------- ---------
Supply 468 23 14 6
------------------------------------------ --------- ------- ---------
Europe 559 124 45 2,614
------------------------------------------ --------- ------- ---------
Latin America 937 301 24 8,955
------------------------------------------ --------- ------- ---------
Other businesses 30 13 45 435
------------------------------------------ --------- ------- ---------
Services 42 3 4 64
------------------------------------------ --------- ------- ---------
Corporate structure 121 75 (14) 12
------------------------------------------ --------- ------- ---------
3. Cash flow and investments Total investments in the first quarter of 2004 were Euro 888 million, broken down as follows:
Euro million
Chg
03/31/04 03/31/03 %
Tangibles 379 386 (7)
Intangibles 5 4 1
Financial 504 87 417
Total investments 888 477 411
------------------------------------------------------- --------- ----
The following table gives a breakdown of tangible investments by business line:
Euro million
Electricity business
--------------------------------------------------------- Total
Spain Latin Europe Others
America
----------------------------------------- -------- ------ -----
Generation 46 68 38 34 186
----------------------------------------- -------- ------ ------ -----
Distribution 127 44 - - 171
----------------------------------------- -------- ------ ------ -----
Others 19 3 - - 22
----------------------------------------- -------- ------ ------ -----
Total 192 115 38 34 379
----------------------------------------- -------- ------ ------ -----
Tangible investments in distribution in Spain increased by 25.7% in January-March 2004 compared to the same period in 2003. This increase is part of the effort being made by the Company to improve service quality. In relation to this, the Equivalent Installed Capacity Interruption INTERRUPTION. The effect of some act or circumstance which stops the course of a prescription or act of limitation's. 2. Interruption of the use of a thing is natural or civil. Time (TIEPI) was 0.38 hours for ENDESA's total Spanish markets in the first quarter of 2004, an improvement of 29% on the same comparative period of 2003. The main financial investments were the acquisition of an additional 3% stake in AUNA for Euro 261 million and the Euro 185 million capital increase at Smartcom - this was made by converting existing loans into capital and therefore not requiring any further outflow of funds. Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses came to Euro 1,004 million in the first quarter of 2004, 1.3% higher than the same period in 2003. This cash flow amply am·ple adj. am·pler, am·plest 1. Of large or great size, amount, extent, or capacity: an ample living room. See Synonyms at spacious. 2. a. covered all tangible Possessing a physical form that can be touched or felt. Tangible refers to that which can be seen, weighed, measured, or apprehended by the senses. A tangible object is something that is real and substantial. An automobile is an example of tangible Personal Property. and intangible investments (Euro 384 million), the interim dividend paid to ENDESA shareholders on 2 January 2004 (Euro 280 million), the dividends paid to minority shareholders in its subsidiaries (Euro 70 million) and the payment of provisioned obligations - fundamentally for headcount head count or head·count n. 1. The act of counting people in a particular group. 2. The number of people counted in this way. Noun 1. reduction programs (Euro 128 million). 4. Financial structure At 31 March 2004, ENDESA's shareholder equity was Euro 9,162 million, an increase of Euro 361 million compared to 31 December 2003. Equity of subsidiaries attributable to minority shareholders at that date stood at Euro 5,122 million, an advance of Euro 177 million compared to the end of 2003. Therefore, equity increased by Euro 538 million in the first quarter of 2004 compared to an increase of Euro 646 million in debt, putting leverage at 125.3% compared to 125.5% at 31 December 2003. The table below gives the breakdown of debt at 31 March 2004:
Euro million
----------------------------------------------------------------------
ENDESA in ENERSIS Total
Spain and group ENDESA
direct group
subsidiaries
------------------------------------------------------ ------- -------
Euro 12,593 5 12,598
------------------------------------------------------ ------- -------
Dollar 571 3,389 3,960
------------------------------------------------------ ------- -------
Other currencies 56 1,282 1,338
------------------------------------------------------ ------- -------
Total 13,220 4,676 17,896
------------------------------------------------------ ------- -------
Fixed rate 10,000 3,668 13,668
------------------------------------------------------ ------- -------
Hedged rate 1,980 766 2,746
------------------------------------------------------ ------- -------
Variable rate 1,240 242 1,482
------------------------------------------------------ ------- -------
TOTAL 13,220 4,676 17,896
------------------------------------------------------ ------- -------
Average life (years) 4.82 6.20 5.19
------------------------------------------------------ ------- -------
Lastly, we would point out that at 31 March 2004 the liquidity of ENDESA in Spain and its direct subsidiaries stood at Euro 4,973 million, of which Euro 3,983 million corresponded to unused credit lines. This sum covers maturities falling due in the next 23 months for this group of companies. Also, at 31 March 2004, the ENERSIS group had liquidity of Euro 566 million, which is sufficient to cover debt maturities for the next 12 months, excluding (as has become usual practice) debt maturities for the group's Argentine subsidiaries. Given the economic situation of that country, all their debt is short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. and rolled over on a recurrent recurrent /re·cur·rent/ (re-kur´ent) [L. recurrens returning] 1. running back, or toward the source. 2. returning after remissions. re·cur·rent adj. 1. basis. |
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