Endesa reports preliminary 1995 results net income up 12.9%.

MADRID, Spain--(BUSINESS WIRE)--Feb. 8, 1996--ENDESA (NYSE: ELE), a major electric utility company in Spain, reported today preliminary consolidated results for fiscal year 1995. Earnings per share were Pta576.30 ($4.75 per ADR), representing an increase of 12.9 percent in respect of Pta510.50 ($4.21 per ADR) for 1994. One ADR is equivalent to one common share of ENDESA stock.

Consolidated net income was Pta149.85 billion ($1.23 billion), against Pta132.73 billion ($1.09 billion) for fiscal 1994. Contribution from subsidiaries and associated companies grew in importance, since the parent company's increase in net income was 8.1 percent. Important highlights for 1995, when comparing it to 1994, were:

-- Coal-fired generation hit a record level at 36,640 Gwh, 8.7 percent higher than in 1994.

-- Distribution to final consumer reached 31,270 Gwh, an increase of 7.4 percent. When associated companies FECSA and SEVILLANA are added, sales to final consumer amount to 70,466 Gwh, representing 44.2 percent of the national total.

-- ENDESA Group production increased by 6.3 percent, reaching 62,429 Gwh. Adding the associated companies, the figure is 83,512 Gwh, or 54.3 percent of the national total.

-- The Group maintained its policy of increasing financial solidity, with stockholders' equity representing 41.3 percent of total liabilities, against 37.5 percent in 1994.

CONSOLIDATION STRUCTURE.- The integration of new companies into the Group as well as the addition of acquired generation and market assets, in the context of sector agreements, have had an incidence in the economic parameters for the year.

Factors that most significantly contributed to the outcome were as follows:

-- Sustained increase of 3.9 percent in electricity demand, due to greater economic activity.

-- Low hydro generation, 16.2 percent less than in the previous year.

-- Initial tariff rate increase of 2.74 percent, well below the year's CPI. Once negative deviations of 2.69 percent from years 94 and 95 are added, real tariff rate increase was 0.05 percent.

-- Mean cost of debt of 8.3 percent, very similar to the previous year.

-- Debt retirement.

-- Operation and maintenance costs containment.

PRODUCTION.- At a national level, production reached 153,741 Gwh, 1.8 percent more than in 1994. Cogenerators' contribution grew by 15.2 percent.

Low rainfall made the production structure different from the previous years's, with the decrease in hydro generation being offset by higher utilization of coal (+6.9%) and oil (+156.5%) plants, while nuclear generation remained fairly stable.

The system's fuel mix for 1995 was as follows:

1995 1994

Hydro 15.0% 18.3% Coal 44.3% 42.2% Oil/gas 2.6% 1.1% Nuclear 38.1% 38.4%

The ENDESA Group generated 62,429 Gwh in 1995, 6.3 percent more than in 1994, representing 40.6 percent of the national total. Fuel mix was similar in both years, with stable hydro and nuclear generation while coal and oil/gas generation saw increases of 8.7 percent and 13.0 percent, respectively.

The ENDESA Group fuel mix breakdown was as follows:

1995 1994

Hydro 10.3% 10.8% Coal 58.7% 57.4% Oil/gas 10.4% 9.8% Nuclear 20.6 22.0%

OPERATING REVENUES.- Operating revenues amounted to Pta883.92 billion ($7.28 billion), 8.9 percent higher than in fiscal 1994. Sales, distributed by type of customer were as follows (in million pesetas):

1995 1994 Variation %

Wholesale 391,976 357,262 34,714 9.7 Retail 416,415 383,054 33,361 8.7

Breakdown of these increases was as follows:

WHOLESALE RETAIL Rate increase & other 1.6% 1.4% Volumen growth 8.0% 7.2%

OPERATING EXPENSES.- Operating expenses of Pta617.76 billion ($5.09 billion) were up 6.9 percent in respect of 1994. Most significant changes were:

-- "Fuel and electricity puchased" went up 12.6 percent as a result of:

- Greater thermal production

- More purchases from cogenerators

- Replacement of NUCLENOR's own production with energy purchases.

-- Personnel expenses increased by 3.9 percent due to the integration into the Group of ENECO, NANSA, TERBESA, HIDRUNA I and Energias de Aragon. Headcount was reduced by 386 during fiscal 1995, thus off-setting salary increases negotiated with unions. -- Depreciation increased as a result of asset additions. -- Other Group operating expenses were at the same level as the previous year, as a consequence of cost cutting and containment policies.

FINANCIAL INCOME AND EXPENSES.- Financial income increased by Pta3.19 billion ($26.24 million), primarily due to more financial products and positive foreign exchange differences.

Financial expenses, net of pension funding and currency losses, went up 1.7 percent. A mean debt of Pta10.41 billion ($85.78 million) lower than the previous year has compensated for the increase in mean rate of interest from 8.1 percent, in 1994, to 8.3 percent, in 1995.

Unallocated negative foreign exchange differences in early fiscal 1995 were Pta11.36 billion ($93.54 million), compared to Pta4.66 billion ($38.38 million) at year-end, due, primarily, to early repayment of loans in foreign currency.

Interest-bearing debt, as of December 31, 1995, amounted to Pta571.76 billion ($4.71 billion), against Pta593.49 billion ($4.89 billion) at year-end, 1994. This debt includes that of the newly consolidated companies, in the amount of Pta20.78 billion ($171.19 million). Additionally, Pta56.06 billion ($461.80 million) was paid to SEVILLANA in July, 1995, in settlement of the price agreed for one third of Los Barrios coal-fired plant and 50% of ENECO, both acquired in 1994.

INCOME FROM AFFILIATES CARRIED BY THE EQUITY METHOD.- In 1995, income from affiliated companies carried by the equity method was Pta29.37 billion ($241.92 million), against Pta22.27 billion ($183.45 million) in 1994.

EXTRAORDINARY ITEMS.- Extraordinary expenses of Pta18.85 billion ($155.26 million) were due, basically, to greater provisions for restructuring mining activities, changes in actuarial funding rates for pension plans, to cover risks and depreciation of fixed assets and for a new early retirement plan.

CHANGES IN FINANCIAL POSITION.- Cashflow generated amounted to Pta303.28 billion ($2.50 billion), 9.7 percent higher than the previous year.

Investments in capital goods were Pta131.98 billion ($1.09 billion), against Pta189.59 billion ($1.56 billion), which included Pta85.46 billion ($703.94 million) in the asset swap agreed within the industry.

Financial investments were Pta31.52 billion ($259.65 million), highlights of which are Pta3.10 billion ($25.57 million) for the acquisition of 17.8% in Energias de Aragon; Pta4.23 billion ($34.85 million) for 7% in Airtel; Pta1.5 billion ($12.36 million) for a rights issue by Made; Pta9.54 billion ($78.55 million) for 9.7% in EDENOR; and loans to TEJO and ELCOGAS for Pta5.02 billion ($41.38 million) and Pta2.72 ($22.38 million), respectively.

Investments were financed entirely out of cashflow generated.

Consolidated figures are unaudited and calculated in accordance with Spanish GAAP. Conversion of pesetas (Pta) into US dollars ($) is based on the Federal Reserve Bank noon-buying rate on December 29, 1995, of $1.00=Pta121.40.

CONTACT: ENDESA

Fernando Lario, North America Investor Relations,

212/750 7200