Enersis S: Consolidated Results For The Period Ended On June 30, 2013

The following excerpt is from the company's SEC filing.

A special development in Argentina, the incorporation of the ConoSur in kind assets in the context of our capital increase, and the generation business segment led to a 98.2% increase in our net income when comparing 1H13 to 1H12.

Resolution SE N250/13 of the Secretariat of Energy of the Argentine Ministry of Federal Planning, Public Investment and Services, positively affected the accounts of our Argentine subsidiary, Edesur, during the second quarter, which largely explained our improvement in EBITDA and net income.

The addition of the assets of Cono Sur, (the company through which Endesa Spain made the in kind contribution in the latest capital increase) generated an additional 20% of Net Income in the second quarter.

Procurement and service costs decreased Ch$ 266,076 million while operating revenues decreased Ch$ 93,703 million, equivalent to a 2.9% drop reaching Ch$ 3,157,601 million as a consequence of lower revenues in generation business of Ch$ 85,034 million, mainly due to the drought affecting Chile and lower distribution segment revenues of Ch$28,966 million. In generation, this is mainly explained by decreases in Chile, Argentina and Peru, partially offset by Colombia and Brazil. In distribution, lower revenues are attributable to Brazil, Colombia and Peru, partially offset by Argentina and Chile.

Demand for electricity grew less than expected, because of fewer working days, and milder temperatures, both of which are transitory factors. However, our subsidiaries in Chile, Colombia and Brazil grew more than their peers in each country. Demand for electricity, in each one of our markets, was as follows:

Physical sales in the distribution segment increased 1,221GWh, or 3.4%, reaching 36,957GWh, while in generation, physical sales decreased by 0.8%, or 245GWh due to lower hydro availability, partially offset by higher thermal generation at lower costs compared to the the same period in 2012.

Procurement and Service Costs decreased by 14.1%, reaching Ch$1,620,930 million, as a consequence of lower fuel consumption expenses of Ch$77,466 million, lower energy purchase costs of Ch$65,180 million and lower transportation costs of Ch$ 39,986 million. This operating cost reductions are mainly explained by the commissioning of Bocamina II, and were partially offset by:

The drought affecting Brazil, which increased energy prices, and the fact that until now part of the incremental energy purchase costs has not been recognized in the distribution tariffs.

The Companys EBITDA amounted to Ch$ 1,087,175 million during this first semester, 16.2% higher when compared to the same period in 2012. This good performance is mainly due to the one time effect in Edesur, in relation to the recognition of pending higher costs (MMC), and to lower operating cost due to the start up of Bocamina II and lower LNG purchase costs. The effect of the incorporation of Cono Sur into Enersis as of the second quarter of 2013, as a consequence of the capital increase operation ended on March 2013, was a positive impact on EBITDA of Ch$ 4,608 million.

The net financial result was a Ch$ 64,878 million loss, 60% better than for the first half of 2012, mainly explained by higher interest income of Ch$ 52,787 million as a consequence of higher cash availability due to the capital increase operation, and lower interest expense of Ch$28,084 million.

The diversified portfolio of the Enersis Group allowed us to maintain a well balanced contribution to our EBITDA by business segment,

The effect of increasing the ownership in some of the companies that Enersis already consolidated, as well as the incorporation of new assets, both as a consequence of the recent capital increase, led to a positive impact in net income attributable to the owners of the Company of Ch$52,531 million, or US$110 million, in the second quarter of 2013. On an annualized basis, this figure surpasses the initially estimated positive impact of the inkind contribution of US$ 366 million.

Operating revenues decreased 6.6%, reaching Ch$1,211,672 million, primarily due to a lower average energy sale price expressed in Chilean pesos and the slight decrease on physical sales.

Procurement and services costs decreased 15.9% to Ch$ 621,597 million because of the reduction in fuel consumption costs of Ch$ 77,462 million, energy purchases costs of Ch$23,042 million and transportation expenses of Ch$ 19,686 million.

Consolidated physical sales decreased 0.8% to 32,042 GWh, explained basically by decreases in Chile, Per and Brasil, partially offset by increases in Argentina and Colombia.

Lower energy purchases cost of Ch$ 49,204 million due to higher thermal generation as a result of the start up of Bocamina II operation, added to lower fuel consumption costs of Ch$ 55,345 million and lower transportation cost of Ch$ 17,790 million.

This was partially offset by lower energy sale revenues of Ch$ 102,591 million due to lower average energy sale prices and lower physical sales as a result of reduced contracts indexed to marginal cost and the expiration of some contracts with non regulated customers.

This was partially offset by lower operation revenues of Ch$ 20,622 million, as a consequence of a reduction in the average energy sale prices expressed in Chilean peso terms and lower physical sales due to a reduction in hydro generation as a result of lower reservoir levels.

Higher procurement and services costs of Ch$ 18,402 million, mainly explained by higher energy purchases costs of Ch$ 3,137 million, primarly in Central Fortaleza.

This was partially offset by higher energy sale revenues of Ch$ 9,352 million, due to higher thermal generation in Fortaleza at higher average sale prices, that compensated the lower hydro availability in Cachoeira Dourada.

Increase in operating revenues of Ch$ 38,326 million explained by 10.6% increase in the average energy sale price in Chilean peso terms, in line with a higher market price in Colombia, and 3.2% increase in physical sales due to higher demand.

Lower procurement and service cost of Ch$ 4,086 million mainly explained by lower fuel consumption as a result of lower thermal dispatch.

The latter was partially offset by a reduction in operating revenues of Ch$ 2,683 million due to lower average energy sale price in Chilean peso terms and lower physical sales.

Operating revenues reduced by 1.3% compared to the first half 2012, reaching Ch$2,231,771 million. This is explained mainly by the tariff revision process in Coelce and Chilectra which resulted in tariff reductions.

Procurement and service costs reached Ch$ 1,291,392 million, 11.6% lower than in first half 2012. This is mainly explained by reductions in energy purchases cost, other procurement and service cost and transportation cost.

% Physical Sales

Chile

Argentina

Peru

Brazil

Colombia

TOTAL

1H 2013

Chilectra

Edesur

Edelnor

Ampla

Coelce

Codensa

1H 2013

1H 2012

1H 2013

1H 2012

1H 2013

1H 2012

1H 2013

1H 2012

1H 2013

1H 2012

1H 2013

1H 2012

1H 2013

1H 2012

Residential

25%

25%

41%

41%

38%

37%

42%

41%

35%

34%

34%

35%

36%

35%

Industrial

20%

22%

8%

8%

18%

19%

8%

9%

11%

12%

6%

7%

11%

12%

Commercial

31%

29%

25%

27%

22%

22%

20%

20%

18%

19%

16%

16%

23%

23%

Others

23%

24%

25%

25%

22%

22%

30%

30%

36%

34%

44%

42%

30%

29%

TOTAL

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%



Lower procurement and service costs of Ch$ 26,036 million mainly explained by lower energy purchase costs as a result of the absence of marginal cost indexation in contracts with generators.

The above was partially offset by lower energy sales revenues of Ch$ 28,805 million due to lower average energy sale price, explained by the tariff revision process in Chilectra since November 2012.

This was partially offset by an increase of Ch$ 12,335 million in personnel expenses, due to salary increases because of union agreements.

Increase of Ch$ 7,251 million in other fixed operating costs because of higher costs in inputs and services hired to repair the grid.

Reduction of Ch$ 6,847 million in energy sales revenues, due to lower demand as a result of the decrease in industrial and commercial activity.

EBITDA decreased by Ch$ 29,993 million mainly as a consequence of the drought affecting Brazil, that has pushed up the energy price. Also, because until today a part of the incremental energy purchase costs has not been recognized yet in the distribution companies tariffs. In addition to this:

Lower energy sales revenues in Coelce of Ch$ 79,981 million and in Ampla of Ch$ 73,513 million, due to lower average energy sale price expressed in Chilean peso terms as a result of Coleces tariff revision process, partially offset by higher physical sales in both companies.

Lower energy sales revenues of Ch$ 13,859 million, a 3.9% decrease, explained by a 7.0% decrease in energy sales price expressed in Chilean peso terms, partially offset by a 3.3% increase in physical sales.

Average nominal interest rate decreased from 8.9% down to 8.1%, mainly explained by a lower inflation rate in Chile and better rate conditions in the countries where we operate.

Liquidity, a key consideration in our financial management, continues to be in a very solid position, as shown below on a consolidated basis for Enersis,

Hedge and protection: In order to mitigate exchange rate and interest rate risks, Enersis has established strict internal rules to protect our cash flows and balance sheet from fluctuations in these variables.

Our exchange rate policy is based on cash flows and we strive to maintain a balance between US dollar indexed flows, and assets and liabilities in such currencies. In addition to this policy, we have contracted cross currency swaps for a total amount of US$ 1,412 million and forwards for US$ 742 million as of June 30, 2013.

In order to reduce financial results volatility due to changes in market interest rates, we seek to maintain an adequate balance in our debt structure. Thus, as of June 30, 2013, we have contracted interest rate swaps (from variable to fixed rates) for US$ 440 million.

During the period from July 2012 to June 2013, the Chilean Stock Exchanges index for the most important 40 shares, IPSA, showed a decrease of -8.4%. The markets where the Company operates recorded mixed performance, as follows:

In Europe, the main Stock Exchanges showed positive performances over the last 12 months: IBEX: 9.0%, UKX:10.2% and FTSE 250: 24.4%. U.S. market also performed positively in line with its economic recovery: S&P 500: 17.6% and Dow Jones Industrial: 15.8% (all yields measured in local currency).

Enersis share price decreased -11.4% over the past 12 months. This change is mainly attributable to the global economic scenario, especially in the European zone and also due to the drought affecting Chile for the last three consecutive years. Closing price for the period was Ch$ 166.9

On the other hand, Enersis` ADS value decreased -13.0% reaching a price of US$16.4, while its share price in the Madrid Stock Exchange decreased 13.9% reaching 0.248 as of June 30, 2013.

During the last twelve months, Enersis continued to be among the most actively traded companies in the local stock market (Santiago Stock Exchange and Chilean Electronic Exchange), with a daily average trading volume of US$ 12.8 million.

The Companys geographic diversification in South America provides a natural hedge against different regulations and weather conditions. Most of Enersis operating subsidiaries are financially strong and have leading market positions in the countries where Enersis operates.

On July 12, 2013, Standard & Poor's confirmed the international credit risk rating for Enersis of "BBB+" with stable Outlook, a positive sign in the middle of a difficult macroeconomic scenario prevailing in international markets. This took place on the occasion of the reviews of both Enel SpA and Endesa Spain in previous days, in which both credit risk ratings were downgraded.

On January 15, 2013, Feller Rate ratified the AA local rating of Enersis bonds, shares and commercial papers program, also confirming the stable outlook.

On December 19, 2012, Fitch Ratings affirmed both ratings in local and foreign currency of Enersis of "BBB+", as well as its long-term rating on the national scale at 'AA (cl)'. The outlook is "stable".

On September 26, 2012, Humphreys assigned AA to Enersis local bonds, AA/Level 1+ to the commercial papers program and First Class Level 1 to the companys shares.

Enersis

S&P

Moodys

Fitch

Corporate

BBB+ / Stable

Baa2 / Stable

BBB+ / Stable

Enersis

Feller Rate

Fitch

Humphreys

Shares

1st Class Level 1

1st Class Level 1

1st Class Level 1

Bonds

AA / Stable

AA / Stable

AA / Stable



As a result of applying IFRS 11 "Joint Arrangements, since January 1, 2013, the jointly controlled companies, which until the financial statements submitted as of December 31, 2012, were consolidated on a proportional basis, should be recorded under the equity method, as required by the new standard for Joint Arrangements that qualify as Joint Ventures.

Having in mind that application of the IFRS 11 "Joint Arrangements is retroactive, these consolidated financial statements include modifications to certain comparative figures, and the related explanatory notes, which in turn were approved by Enersis governing bodies.
Generation and Transmission Business 2
Distribution Business 4
Financial Summary 5
Market Summary 5
Risk Rating Classification Information 6
TABLE OF CONTENTS 9
GENERAL INFORMATION 11
Simplified Organizational Structure * 12
Consolidated Income Statement Analysis 13
Net Income 13
Net Financial Income 15
Sale of Assets 16
Taxes 16
Consolidated Balance Sheet Analysis 16
Assets Under IFRS 16
BOOK VALUE AND ECONOMIC VALUE OF ASSETS 18
LIABILITIES AND SHAREHOLDERS EQUITY UNDER IFRS 19
Debt Maturity with Third Parties, Thousand US$ 21
Debt Maturity with Third Parties, Million Ch$ 22
Evolution Of Key Financial Ratios 22
Under IFRS 24
Cash Flow Received From Foreign Subsidiaries by Enersis, Chilectra and Endesa Chile 25
THE MAIN RISKS ASSOCIATED TO THE ACTIVITIES OF THE ENERSIS GROUP 26
ARGENTINA 31
Generation 31
Endesa Costanera 31
El Chocn 32
Dock Sud 33
Distribution 34
Edesur 34
BRAZIL 35
Endesa Brasil 35
Generation 35
Cachoeira Dourada 35
Fortaleza (cgtf) 36
Transmission 37
CIEN 37
Ampla 37
Coelce 38
CHILE 39
Generation 39
Endesa Chile 39
Distribution 40
Chilectra 40
COLOMBIA 42
Generation 42
Emgesa 42
Distribution 43
Codensa 43
PERU 44
Generation 44
Edegel 44
Eepsa 44
Distribution 45
Edelnor 45
MARKET INFORMATION 48
Equity Market 48
CONFERENCE CALL INVITATION 52
Disclaimer 53


(Santiago, Chile, Wednesday, July 24, 2013.) Enersis S.A. (NYSE: ENI), announced today its consolidated financial results for the period ended on June 30, 2013. All figures are in Chilean pesos (Ch$) and in accordance with International Financial Reporting Standards (IFRS). Variations refer to the period between June 30, 2012 and June 30, 2013.

Figures as of June 30, 2013 are additionally translated into US$, merely as a convenience translation, using the exchange rate of US$ 1 = Ch$ 507.16 for the Balance Sheet, and the average exchange rate for the period of US$ 1 = Ch$ 478.71 for the Income Statement, Cash Flow Statements, Capex and Depreciation values.

* Due to the capital increase operation, the ownership structure of the highlighted companies has changed when compared to the last period. Also three new operative companies have been incorporated to Enersis Ownership Structure: Piura, Docksud and Yacilec. Yacilec is not consolidated by Enersis.

Enersis Net Income attributable to the owners of the controller as of June 30, 2013 reached Ch$322,356 million, representing a 98.2% increase compared to first half 2012, which was Ch$162,621 million.

Table 1

CONSOLIDATED INCOME STATEMENT

(Million Ch$)

(Thousand US$)

1H 2013

1H 2012

Var 2012-2013

Chg %

1H 2013

Sales

2,845,647

3,135,102

(289,456)

(9.2%)

5,944,407

Energy sales

2,647,590

2,916,319

(268,729)

(9.2%)

5,530,675

Other sales

12,282

9,030

3,252

36.0%

25,656

Other services

185,776

209,754

(23,978)

(11.4%)

388,075

Other operating income

311,954

116,201

195,752

168.5%

651,655

Revenues

3,157,601

3,251,304

(93,703)

(2.9%)

6,596,061

Energy purchases

(909,489)

(974,678)

65,190

6.7%

(1,899,874)

Fuel consumption

(300,975)

(378,441)

77,466

20.5%

(628,721)

Transportation expenses

(190,112)

(230,097)

39,986

17.4%

(397,133)

Other variable costs

(220,355)

(303,789)

83,434

27.5%

(460,310)

Procurements and Services

(1,620,930)

(1,887,006)

266,076

14.1%

(3,386,037)

Contribution Margin

1,536,671

1,364,298

172,372

12.6%

3,210,024

Other work performed by entity and capitalized

27,903

23,335

4,567

19.6%

58,287

Employee benefits expense

(229,999)

(203,619)

(26,380)

(13.0%)

(480,457)

Other fixed operating expenses

(247,398)

(248,316)

918

0.4%

(516,802)

Gross Operating Income (EBITDA)

1,087,175

935,698

151,477

16.2%

2,271,052

Depreciation and amortization

(205,615)

(213,781)

8,166

3.8%

(429,519)

Reversal of impairment profit (impairment loss) recognized in profit or loss

(15,931)

(17,490)

1,559

8.9%

(33,278)

Operating Income

865,630

704,427

161,203

22.9%

1,808,255

Net Financial Income

(64,879)

(162,089)

97,210

60.0%

(135,528)

Financial income

142,110

89,322

52,788

59.1%

296,861

Financial costs

(205,410)

(233,494)

28,084

12.0%

(429,092)

Gain (Loss) for indexed assets and liabilities

(164)

(7,912)

7,748

97.9%

(342)

Foreign currency exchange differences, net

(1,414)

(10,005)

8,590

85.9%

(2,955)

Gains

46,081

24,463

21,618

88.4%

96,260

Losses

(47,495)

(34,468)

(13,027)

(37.8%)

(99,215)

Share of profit (loss) of associates accounted for using the equity method

10,396

16,249

(5,853)

(36.0%)

21,717

Net Income From Other Investments

860

298

562

188.7%

1,797

Net Income From Sale of Assets

6,578

1,491

5,088

341.3%

13,742

Net Income Before Taxes

818,586

560,375

258,211

46.1%

1,709,983

Income Tax

(256,280)

(171,660)

(84,620)

(49.3%)

(535,355)

NET INCOME ATTRIBUTABLE TO:

562,306

388,715

173,591

44.7%

1,174,628

Owners of parent

322,356

162,621

159,735

98.2%

673,385

Non-controlling interest

239,950

226,094

13,856

6.1%

501,243

Earning per share (Ch$ /share and US$ / ADR)

6.6

5.0

1.6

31.8%

1.0



Operating income increased by Ch$ 161,203 million, 22.9% higher than same period in 2012. The breakdown by business line for the period ended June 30, 2013 and June 30, 2012 is as follow:

Table 2

Operating Income by Businesses

Generation and Transmission

Distribution

Million Ch$

Chg%

Th. US$

Million Ch$

Chg%

Th. US$

1H 2013

1H 2012

1H 2013

1H 2013

1H 2012

1H 2013

Operating Revenues

1,211,672

1,296,706

(6.6%)

2,531,119

2,231,771

2,260,737

(1.3%)

4,662,052

Operating Costs

(844,377)

(952,068)

(11.3%)

(1,763,859)

(1,723,969)

(1,894,479)

(9.0%)

(3,601,281)

Operating Income

367,295

344,638

6.6%

767,260

507,802

366,258

38.6%

1,060,771

Operating Income by Businesses

Eliminations and Others

Consolidated

Million Ch$

Chg%

Th. US$

Million Ch$

Chg%

Th. US$

1H 2013

1H 2012

1H 2013

1H 2013

1H 2012

1H 2013

Operating Revenues

(285,842)

(306,139)

(6.6%)

(597,110)

3,157,601

3,251,304

(2.9%)

6,596,061

Operating Costs

276,376

299,671

(7.8%)

577,334

(2,291,971)

(2,546,877)

(10.0%)

(4,787,806)

Operating Income

(9,467)

(6,469)

46.3%

(19,776)

865,630

704,427

22.9%

1,808,255



registered an operating income of Ch$ 367,295 million, representing a Ch$ 22,657 million increase as compared to the first half 2012. Physical sales decreased 5.0%, amounting to 30,674 GWh in this period.

Table 3

Generation & Transmission

Chile

Argentina

Brazil

Million Ch$

Chg%

Th. US$

Million Ch$

Chg%

Th. US$

Million Ch$

Chg%

Th. US$

1H 2013

1H 2012

1H 2013

1H 2013

1H 2012

1H 2013

1H 2013

1H 2012

1H 2013

Operating Revenues

419,742

526,070

(20.2%)

876,819

163,659

184,281

(11.2%)

341,874

179,104

172,907

3.6%

374,140

% of consolidated

35%

41%

35%

14%

14%

14%

15%

13%

15%

Operating Costs

(369,771)

(482,155)

(23.3%)

(772,433)

(156,339)

(181,446)

(13.8%)

(326,584)

(101,529)

(85,190)

19.2%

(212,089)

% of consolidated

44%

51%

44%

19%

19%

19%

12%

9%

12%

Operating Income

49,970

43,915

13.8%

104,386

7,320

2,834

158.3%

15,290

77,575

87,717

(11.6%)

162,051

Generation & Transmission

Peru

Colombia

Consolidated

Million Ch$

Chg%

Th. US$

Million Ch$

Chg%

Th. US$

Million Ch$

Chg%

Th. US$

1H 2013

1H 2012

1H 2013

1H 2013

1H 2012

1H 2013

1H 2013

1H 2012

1H 2013

Operating Revenues

139,071

141,754

(1.9%)

290,511

310,338

272,012

14.1%

648,279

1,211,672

1,296,706

(6.6%)

2,531,119

% of consolidated

11%

11%

11%

26%

21%

26%

100%

100%

Operating Costs

(85,650)

(89,239)

(4.0%)

(178,918)

(131,329)

(114,355)

14.8%

(274,340)

(844,377)

(952,068)

(11.3%)

(1,763,859)

% of consolidated

10%

9%

10%

16%

12%

16%

100%

100%

Operating Income

53,421

52,515

1.7%

111,593

179,009

157,657

13.5%

373,939

367,295

344,638

6.6%

767,260



showed a Ch$ 141,544 million higher operating income, totaling Ch$ 507,802 million. Physical sales amounted to 36,957 GWh, representing an increase of 1,221 GWh, or 3.4%. Our customers base increased by 454 thousand of new customers, amounting over 14.1 million customers.

Table 4

Distribution

Chile

Argentina

Brazil

Million Ch$

Chg%

Th. US$

Million Ch$

Chg%

Th. US$

Million Ch$

Chg%

Th. US$

1H 2013

1H 2012

1H 2013

1H 2013

1H 2012

1H 2013

1H 2013

1H 2012

1H 2013

Operating Revenues

471,267

494,323

(4.7%)

984,453

343,754

165,014

108.3%

718,083

811,481

980,892

(17.3%)

1,695,141

% of consolidated

21%

22%

21%

15%

7%

15%

36%

43%

36%

Operating Costs

(401,717)

(426,607)

(5.8%)

(839,167)

(202,070)

(190,068)

6.3%

(422,114)

(661,114)

(810,834)

(18.5%)

(1,381,033)

% of consolidated

23%

23%

23%

12%

10%

12%

38%

43%

38%

Operating Income

69,550

67,716

2.7%

145,286

141,683

(25,054)

(665.5%)

295,969

150,367

170,058

(11.6%)

314,108

Distribution

Peru

Colombia

Consolidated

Million Ch$

Chg%

Th. US$

Million Ch$

Chg%

Th. US$

Million Ch$

Chg%

Th. US$

1H 2013

1H 2012

1H 2013

1H 2013

1H 2012

1H 2013

1H 2013

1H 2012

1H 2013

Operating Revenues

192,946

194,265

(0.7%)

403,054

412,323

426,243

(3.3%)

861,321

2,231,771

2,260,737

(1.3%)

4,662,052

% of consolidated

9%

9%

9%

18%

19%

18%

100%

100%

Operating Costs

(159,649)

(158,925)

0.5%

(333,499)

(299,418)

(308,045)

(2.8%)

(625,469)

(1,723,969)

(1,894,479)

(9.0%)

(3,601,281)

% of consolidated

9%

8%

9%

17%

16%

17%

100%

100%

Operating Income

33,297

35,340

(5.8%)

69,555

112,905

118,197

(4.5%)

235,852

507,802

366,258

38.6%

1,060,771



As of June 30, 2013 the Companys net financial income totaled a loss of Ch$ 64,879 million, 60.0% better than in the first semester 2012. The latter is mainly explained by:

Higher financial revenues of Ch$ 52,788 million, as a consequence of the actualization in Brazil of unamortized assets at the end of the concession in Ampla and Coelce in Brazil to new replacement value depreciated by Ch$ 32,744 million, higher revenues in Edesur of Ch$ 27,044 million due to financial effects of the application of resolution 250/13, higher revenues in Enersis of Ch$ 11,584 million due to investments regarding the capital increase operation. This was partially offset by lower revenues by financing and conventions of Ch$ 6,440 million, lower cash deposits of Ch$ 4,476 million, lower revenues by juditial deposits reversal in Brazil of Ch$ 4,516, lower extraordinary financial revenue by ESSALUD received in 2012 in Edelnor of Ch$ 1,650 million and lower other revenues of Ch$ 1,502 million.

Lower financial expenses of Ch$ 28,084 million as a result of lower contingencies actualization of Ch$19,331 million and a decrease in financial costs of loans and bonds of Ch$ 11,789 million. This was partially offset by higher other financial expenses of Ch$ 2,562 million and higher expenses for derivatives valuation of Ch$ 474 million.

change mainly over UF denominated debt in some companies in Chile. This as a result that in this period the UF increased its value by 0.1% compared with the 1.5% increase during same period last year.

Lower exchange rate expense of Ch$ 8,590 million, mainly explained by revenues due to exchange rate variation in cash and cash equivalent of Ch$ 6,289 million and in debtors and other accounts receivable in US dollars of Ch$ 16,276 million and losses in liabilities in US dollars of Ch$ 13,963 million.

Net income from sales of assets presented a positive variation of Ch$ 5,650 million, due to the earnings obtained from the transmission line sale by Ch$ 2,532 million, land sale by Ch$ 2,247 million and other sales by Ch$ 871 million.

Income tax on companies expense increased by Ch$ 84,620 million mainly due to increases in Enersis of Ch$ 40,042 million, Edesur of Ch$ 21,725 million, Ampla of Ch$ 15,275 million, Endesa Chile of Ch$ 6,843 million, Chilectra of Ch$ 5,298 million, Pehuenche of Ch$ 3,751 million and Edegel of Ch$ 960 million. This was partially offset by a decrease in Coelce of Ch$ 9,288 million.

Table 5

ASSETS

(Million Ch$)

(Thousand US$)

As of June 30, 2013

As of Dec 31, 2012

Var 2012-2013

Chg %

As of June 30, 2013

CURRENT ASSETS

Cash and cash equivalents

1,168,103

815,832

352,271

43.2%

2,303,224

Other current financial assets

749,747

194,501

555,246

285.5%

1,478,325

Other current non-financial assets

118,581

103,377

15,205

14.7%

233,814

Trade and other current receivables

879,174

846,791

32,383

3.8%

1,733,523

Accounts receivable from related companies

41,657

47,570

(5,914)

(12.4%)

82,137

Inventories

69,319

76,563

(7,244)

(9.5%)

136,681

Current tax assets

212,034

205,555

6,480

3.2%

418,082

Non-current assets (or disposal groups) classified as held for sale

-

-

-

-

Total Current Assets

3,238,616

2,290,189

948,427

41.4%

6,385,787

NON-CURRENT ASSETS

Other non-current financial assets

471,332

439,018

32,314

7.4%

929,355

Other non-current non-financial assets

92,115

87,788

4,326

4.9%

181,628

Trade accounts receivables and other receivables, net

242,684

202,900

39,784

19.6%

478,516

Accounts receivable from related companies

-

-

-

-

Investment accounted for using equity method

223,326

214,517

8,809

4.1%

440,346

Intangible assets other than goodwill

1,217,357

1,202,003

15,355

1.3%

2,400,341

Goodwill

1,381,498

1,391,674

(10,176)

(0.7%)

2,723,988

Property, plant and equipment, net

7,129,159

7,049,924

79,236

1.1%

14,057,022

Investment properties

46,698

46,923

(225)

(0.5%)

92,077

Deferred tax assets

229,438

321,556

(92,119)

(28.6%)

452,397

Total Non-Current Assets

11,033,606

10,956,303

77,302

0.7%

21,755,671

TOTAL ASSETS

14,272,222

13,246,492

1,025,729

7.7%

28,141,458



Increase in other financial assets of Ch$ 555,246 million, because of increases in Enersis of Ch$534,943 million due to investments of part of the cash receibed from the capital increased mainly in deposits whith maturity over 90 days, , in Endesa Brasil of Ch$54,129 million for investments in financial instruments, and in Endesa Chile of Ch$ 11,662 million for the valuation at fair value of Forwards. This was partially offset by decreases in Codensa and Emgesa of Ch$ 49,472 million due to liquidation of deposits with maturity over 90 days

Ch$ 352,271 million increase in cash and cash equivalents mainly due to increases in: Enersis of Ch$ 444,892 million due to the capital increase operation ended on March 2013, in Cachoeira Dourada of Ch$ 15,233 million due to higher cash generation, in Coelce of Ch$14,060 for energy overcost collection and higher cash generation, in Endesa Brasil of Ch$9,062 million for loan payment of CIEN, increase for the incorporation in the consolidated financial statements of the companies included in Enersis capital increase operation which include balances at Dock Sud of Ch$ 7,469 million, Empresa Elctrica de Piura of Ch$ 4,549 million and Cemsa of Ch$ 3,944 million. This was partially offset by reductions in Codensa of Ch$ 70,973 million due to dividend payment and non-guaranteed obligations and Emgesa of Ch$ 73,535 million due to dividend payment.

Increase in Commercial debtors of Ch$ 32,383 million, mainly explained by an increase in Edesur of Ch$ 116,982 million due to the impact of resolution 250/13, in San Isidro of Ch$ 20,050 million for billing to YPF, in Emgesa of 12,920 million due to higher billing, in Celta of Ch$ 2,850 million and the increase for the incorporation in the consolidated financial statements of the companies included in Enersis capital increase operation which include balances in Dock Sud of Ch$ 19,801 million, Cemsa of Ch$ 3,857 million and Empresa Elctrica de Piura of Ch$3,532 million. This was partially offset by decreases in Endesa Chile of Ch$ 102,157 million due to Bocamina II insurances payment and lower billing in this period, in Coelce of Ch$ 18,214 million for lower tariffs to customers and low income subsidies, in Ampla of Ch$ 16,292 million for lower residential tariffs and in Peguenche of Ch$ 11,272 million.

Increase in other current non-financial assets of Ch$ 15,204 million, mainly due to the increase in Endesa Chile of Ch$ 5,833 million, in Ampla of Ch$ 2,243 million due to advanced payments, both in Coelce of Ch$ 2,222 million and in CIEN of Ch$1,029 million and the incorporation of Empresa Elctrica Piura of Ch$ 2,939 million.

Decrease of Ch$ 7,243 million in Inventory due to decreases in Endesa Chile of Ch$ 13,670 million for higher oil and coal consumption, in Emgesa of Ch$ 3,575 million for higher coal consumption, partially offset by the incorporation of Sociedad Elctrica Piura of Ch$ 7,463 million, increases in Edelnor of Ch$ 1,083 million, in Chilectra of Ch$ 536 million and in Edesur of Ch$ 699 million.

Increase in property, plant and equipment of Ch$ 79,236 million mainly explained by new investments of Ch$ 239,340 million, the incorporation of the companies included in Enersis capital increase operation of Ch$ 114,175 million and others of Ch$ 9,240 million. This was partially offset by decrease because of the conversion effect, due to the different currencies used by the Company of Ch$ 112,488 million, amortization of the period of Ch$ 166,732 million and disposal of Ch$ 4,298 million.

Increase in trade account receivables and other receivables of Ch$ 39,7834 million, due mainly to the incorporation on the financiel statements of Dock Sud of Ch$ 34,299 million due to account receivables with Foninvemem, increases in CIEN of Ch$ 5,114 million and in Ampla of Ch$ 5,340 million, partially offset by reductions in El Chocn of Ch$ 4,082 million due to Foninvemem payments.

Increase in other non-current financial assets of Ch$ 32,314 million due to increases in Ampla of Ch$ 31,002 million, in Enersis of Ch$ 10,104 million and in Coelce of Ch$ 2,690 million, partially offset by reductions in Endesa Chile of Ch$ 7,554 million due to the valuation at fair value of derivatives, and in Edelnor of Ch$ 3,184 million.

Increase in non-tangible assets other than goodwill of Ch$ 15,355 million, mainly explained by new investments of Ch$ 74,778 million, and by the incorporation of the new companies in Enersis consolidation of Ch$ 2,875 million. This was partially offset by reduction of Ch$ 38,883 million for period amortization, convertion effect of Ch$ 20,503 million and by retirements or disposal of Ch$ 1,465 million.

Decrease in Deferred tax assets of Ch$ 92,119 million due to compensation of deferred tax assets and liabilities from the Brazilian subsidiaries Ampla, Coelce, and CIEN of Ch$ 87,237 million, plus decrases in Enersis of Ch$ 3,119 million and Codensa of Ch$ 3,642 million.

Properties, Plants and Equipment are valued at their purchase cost, net of the corresponding accumulated depreciation and impairment loss Properties, Plants and Equipment, net of their residual value, if applicable, are linearly depreciated by distributing the cost of their different elements along the estimated years of useful life, which is the period that the companies expect to use them. The useful life is reviewed regularly.

The goodwill value generated by consolidation represents the acquisition cost surplus on the Groups stake in terms of the reasonable value of assets and liabilities, including the identifiable contingent liabilities of a subsidiary at the time of acquisition. Goodwill is not amortized. Instead, at the closing of each accounting period an assessment is made of whether any impairment has occurred during the period that could reduce its recoverable value to an amount below the registered net cost, proceeding in this event to make a timely impairment adjustment (See Note 3.e to the Consolidated Financial Statements).

Throughout the fiscal year and in particular at the date of closing, an assessment is made as to any indication of possible loss due to the impairment of any asset. In the event of any such indication, an estimate of the recoverable sum of said asset is made to determine, if applicable, the depreciated amount. If this involves identifiable assets that do not originate independent cash flows, the recoverability of the Cash Generating Unit that the asset belongs to is estimated, understanding as such the smaller group of identifiable assets that generate independent cash incomes.

Notes and accounts receivable from related companies are classified according to their short and long term maturities. These operations are adjusted according to prevalent market equity conditions.

In summary, assets are valued according to the International Financial Reporting Standards, whose criteria are expressed in Note 3 of the Consolidated Financial Statements.

Table 6

LIABILITIES AND SHAREHOLDERS' EQUITY

(Million Ch$)

(Thousand US$)

As of June 30, 2013

As of Dec 31, 2012

Var 2012-2013

Chg %

As of June 30, 2013

CURRENT LIABILITIES

Other current financial liabilities

1,162,700

658,423

504,276

76.6%

2,292,569

Trade and other current payables

1,120,335

1,194,852

(74,517)

(6.2%)

2,209,036

Accounts payable to related companies

80,968

150,260

(69,292)

(46.1%)

159,649

Other short-term provisions

87,898

89,731

(1,833)

(2.0%)

173,314

Current tax liabilities

143,593

169,546

(25,952)

(15.3%)

283,132

Current provisions for employee benefits

-

-

-

-

Other current non-financial liabilities

75,285

83,920

(8,635)

(10.3%)

148,445

Liabilities (or disposal groups) classified as held for sale

-

-

-

-

Total Current Liabilities

2,670,778

2,346,731

324,048

13.8%

5,266,145

NON-CURRENT LIABILITIES

Other non-current financial liabilities

2,437,843

2,928,120

(490,277)

(16.7%)

4,806,851

Non-current payables

18,648

14,257

4,391

30.8%

36,769

Accounts payable to related companies

-

-

-

-

Other-long term provisions

193,116

176,575

16,541

9.4%

380,780

Deferred tax liabilities

405,966

501,128

(95,162)

(19.0%)

800,469

Non-current provisions for employee benefits

247,678

256,161

(8,483)

(3.3%)

488,363

Other non-current non-financial liabilities

70,231

65,313

4,918

7.5%

138,480

Total Non-Current Liabilities

3,373,482

3,941,555

(568,072)

(14.4%)

6,651,712

SHAREHOLDERS' EQUITY

Issued capital

5,669,281

2,824,883

2,844,398

100.7%

11,178,486

Retained earnings (losses)

2,668,281

2,421,279

247,002

10.2%

5,261,222

Share premium

158,760

158,760

-

0.0%

313,037

Other equity changes

-

-

-

-

Reserves

(2,438,343)

(1,511,123)

(927,220)

(61.4%)

(4,807,837)

-

Equity Attributable to Shareholders of the Company

6,057,979

3,893,799

2,164,180

55.6%

11,944,907

Equity Attributable to Minority Interest

2,169,982

3,064,408

(894,426)

(29.2%)

4,278,694

Total Shareholders' Equity

8,227,961

6,958,207

1,269,754

18.2%

16,223,600

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

14,272,222

13,246,492

1,025,729

7.7%

28,141,458



The Companys total liabilities and shareholders equity increased by Ch$ 1,025,730 million, compared to the period ended on June 30, 2012. This is mainly explained by an increase of Ch$ 1,269,754 million in shareholders equity and an increase of Ch$ 324,047 million in current liabilities, partially offset by a Ch$ 568,071 million decrease in non-current liabilities

Increase of other current financial liabilities of Ch$ 504,276 million, due to increases in Enersis of Ch$ 301,741 million because of transference of debt to short-term, in Endesa Chile of Ch$ 99,956 million, in Codensa of Ch$ 42,528 million, in Edelnor of Ch$ 9,094 million in addition to the incorporation in the consolidated financial statements of the companies included in Enersis capital increase operation which include balances in Dock Sud of Ch$ 48,032 million, and Empresa Elctrica de Piura of Ch$3,538 million.

Decrease in trade and other current payables of Ch$ 74,517 million mainly due to the decrease in goods and services account payables of Ch$ 123,756 million including Ch$ 91,594 million for the impact of the 250/13 resolution in Edesur. This was partially offset by increases in dividends payments of Ch$19,781 million, increase payments to fuel and gas suppliers of Ch$ 15,929 million and other accounts payables of Ch$ 14,394 million.

Decrease in accounts payable to related companies of Ch$ 69,292 million mainly due to dividend payment to Endesa Latinoamrica of Ch$ 87,275 million, reduction in account payable to Cemsa of Ch$ 27,831 million due that currently Enersis consolidates it, and lower gas purchase to GNL Quintero of Ch$ 4,021 million. This was partially offset by the increase in loans with Endesa Latinoamrica due to the incorporation of Dock Sud to Enersis of Ch$50,837 million.

Decrease of current tax liabilities of Ch$ 25,952 million due to the deacrease in tax payments in Emgesa of Ch$ 25,885 million, in Codensa of Ch$ 26,703 million, in Pehuenche of Ch$ 13,297 million and in Coelce of Ch$ 4,797 million, partially offset by increases in Enersis of Ch$23,173 million due to convertion effect in foreign investments and in Edesur of Ch$ 21,966 million due to resolution 250/13 effects.

Decrease in other non-current financial liabilities (borrowings and derivatives) of Ch$ 490,277 million, mainly in Enersis of Ch$ 301,741 million, due to transfer to the short-term of US$ denominated bond and and swap derivative, in Endesa Chile of Ch$ 99,956 million due to transfer to the short-term, in Codensa of Ch$ 72,445 million due to transfer to the short-term and conversion effect, in Emgesa of Ch$ 33,723 million due to transfer to the short-term and conversion effect, in Coelce of Ch$ 17,073 million due to transfer to the short-term and conversion effect. This was partially offset by the incorporation of Empresa Elctrica de Piura of Ch$ 41,902 million.

Decrease of deferred tax liabilities of Ch$ 95,162 million mainly due to compensation of deferred taxes of assets and liabilities of Brazilian subsidiaries Ampla, Coelce and CIEN of Ch$87,237 million and decreases in Endesa Chile of Ch$ 5,463 million and in Edegel of Ch$ 4,863 million.

Increase in other long term provisions of Ch$ 16,541 million mainly due to legal claims provisions in Coelce of Ch$ 5,655 million, incorporation of Dock Sud of Ch$ 4,835 million, Edesur Ch$ 2,013 million, Ampla Ch$ 1,824 million and increases in dismantling provisions of Ch$ 1,958 million.

The equity attributable to shareholders of the Company increased by Ch$ 2,164,180 million, explained mainly to the increase in issued capital of Ch$ 2,844,398 million, to the net income of the period of Ch 322,356 million, partially offset by final dividend of Ch$ 75,470 million and negative reserves of Ch$ 927,104 million. The variation in reserves is explained mainly by the effect on reserves of the difference between the book value and the value of the assets contributed in the capital increase operation of Ch$855,970 million, conversion differences in the period of Ch$ 37,897 million, capital increase expenses of Ch 13,100 million net from the overprice obtained in the shares auction and positive hedge reserves of Ch$ 20,251 million.

Non-controlling interest decreased by Ch$ 894,426 million, explained mainly by the reduction of minority part due to the contribution in kind of the capital increase operation of Ch$ 1,073,521 million, partially offset by the comprehensive result of the period of Ch$ 179,095 million.

Table 7

(Thousand US$)

2013

2014

2015

2016

2017

Balance

TOTAL

Chile

418,641.2

743,331.2

224,629.2

447,420.5

18,356.9

930,364.9

2,782,744.0

Enersis

2,527.8

578,365.0

5,575.8

432,429.1

6,235.4

33,662.8

1,058,796.0

Chilectra

1.3

-

-

-

-

-

1.3

Endesa Chile

416,112.1

164,966.1

219,053.4

14,991.4

12,121.5

896,702.1

1,723,946.7

Argentina

255,098.1

171,061.5

18,812.7

9,704.3

-

-

454,676.6

Edesur

25,626.4

11,042.4

4,454.3

-

-

-

41,123.1

Costanera

173,625.8

21,558.5

468.1

-

-

-

195,652.4

Endesa Argentina

1,837.4

-

-

-

-

-

1,837.4

Docksud

43,033.7

119,778.5

-

-

-

-

162,812.2

Cemsa

-

-

-

-

-

-

-

Chocn

10,974.9

18,407.5

13,890.2

9,704.3

-

-

52,976.8

Hidroinvest

-

274.6

-

-

-

-

274.6

Peru

36,428.9

121,326.8

93,587.2

99,675.8

89,494.1

295,630.8

736,143.5

Edelnor

19,780.1

60,896.0

48,685.5

30,625.4

30,099.3

163,646.2

353,732.6

Edegel

14,668.3

52,223.6

36,218.5

59,863.5

49,675.2

81,248.7

293,897.9

Piura

1,980.5

8,207.1

8,683.1

9,186.8

9,719.6

50,735.9

88,513.0

Brazil

149,012.6

153,906.1

129,985.0

199,021.1

197,390.7

238,180.1

1,067,495.7

Endesa Brasil

-

-

-

-

-

-

-

Coelce

59,259.8

88,462.2

37,909.4

87,070.9

63,231.8

79,011.7

414,945.8

Ampla

82,616.6

50,400.4

75,942.0

104,281.2

125,861.9

155,291.4

594,393.4

Cachoeira

-

-

-

-

-

-

-

Cien

-

-

-

-

-

-

-

Fortaleza

7,136.2

15,043.5

16,133.6

7,669.0

8,297.1

3,877.0

58,156.5

Ctm

-

-

-

-

-

-

-

Tesa

-

-

-

-

-

-

-

Colombia

83,462.9

203,037.8

150,682.6

96,250.2

312,165.2

1,048,781.8

1,894,380.5

Codensa

83,462.9

129,600.8

-

75,168.5

202,954.9

41,472.3

532,659.4

Emgesa

-

73,437.0

150,682.6

21,081.7

109,210.3

1,007,309.5

1,361,721.1

TOTAL

942,644

1,392,663

617,697

852,072

617,407

2,512,958

6,935,440

Table 7.1

(Million Ch$)

2013

2014

2015

2016

2017

Balance

TOTAL

Chile

212,318

376,988

113,923

226,914

9,310

471,844

1,411,296

Enersis

1,282

293,324

2,828

219,311

3,162

17,072

536,979

Chilectra

1

-

-

-

-

-

1

Endesa Chile

211,035

83,664

111,095

7,603

6,148

454,771

874,317

Argentina

129,376

86,756

9,541

4,922

-

-

230,594

Edesur

12,997

5,600

2,259

-

-

-

20,856

Costanera

88,056

10,934

237

-

-

-

99,227

Endesa Argentina

932

-

-

-

-

-

932

Docksud

21,825

60,747

-

-

-

-

82,572

Cemsa

-

-

-

-

-

-

-

Chocn

5,566

9,336

7,045

4,922

-

-

26,868

Hidroinvest

-

139

-

-

-

-

139

Peru

18,475

61,532

47,464

50,552

45,388

149,932

373,343

Edelnor

10,032

30,884

24,691

15,532

15,265

82,995

179,399

Edegel

7,439

26,486

18,369

30,360

25,193

41,206

149,053

Piura

1,004

4,162

4,404

4,659

4,929

25,731

44,890

Brazil

75,573

78,055

65,923

100,936

100,109

120,795

541,391

Endesa Brasil

-

-

-

-

-

-

-

Coelce

30,054

44,864

19,226

44,159

32,069

40,072

210,444

Ampla

41,900

25,561

38,515

52,887

63,832

78,758

301,453

Cachoeira

-

-

-

-

-

-

-

Cien

-

-

-

-

-

-

-

Fortaleza

3,619

7,629

8,182

3,889

4,208

1,966

29,495

Ctm

-

-

-

-

-

-

-

Tesa

-

-

-

-

-

-

-

Colombia

42,329

102,973

76,420

48,814

158,318

531,900

960,754

Codensa

42,329

65,728

-

38,122

102,931

21,033

270,144

Emgesa

-

37,244

76,420

10,692

55,387

510,867

690,610

TOTAL

478,071

706,303

313,271

432,137

313,124

1,274,472

3,517,378

Table 8

Indicator

Unit

As of June 30, 2013

As of Dec 31, 2012

Var 2012-2013

Chg %

Liquidity

Times

1.21

0.98

0.23

23.5%

Acid ratio test *

Times

1.19

0.94

0.25

26.6%

Working capital

Million Ch$

567,838

(56,542)

624,379

1104.3%

Working capital

Thousand US$

1,119,642

(111,487)

1,231,129

1104.3%

Leverage **

Times

0.73

0.90

(0.17)

(18.9%)

Short-term debt

%

44.2

37.3

6.87

18.4%

Long-term debt

%

55.8

62.7

(6.87)

(11.0%)

* (Current assets net of inventories and prepaid expenses) / Current liabilities

** Total debt / (equity + minority interest)

Table 8.1

Indicator

Unit

1H 2013

1H 2012

Var 2012-2013

Chg %

Financial expenses coverage *

Times

5.3

3.7

1.53

41.1%

Op. income / Op. rev.

%

27.4

21.7

5.7

26.5%

ROE **

%

10.9

8.7

2.1

24.5%

ROA **

%

7.8

6.4

1.4

21.7%

* EBITDA / Financial costs

** Annualized figures



The liquidity ratio as of June 30, 2013 was 1.21 times, showing a 23.5% increase compared to June 30, 2012. This reflects the cash received in the capital increase operation ended on March 28, 2013 which leaves the company in an excellent liquidity position.

The leverage ratio is 0.73 times as of June 30, 2013, reducing by 18.9% compared to June 30, 2012, which is a consequence of the equity increase due to the capital increase operation.

The financial expenses coverage shows an increase of 1.53 times, equivalent to 41.2%, moving from 3.72 times as of June 30, 2012 to 5.25 times as of June 30, 2013. This is the result of the increase in EBITDA and the decrease in the companys financial cost in this period.

On the other hand, the annualized return on equity of the shareholders of the Company is 10.9%, with a 24.5% increase compared to June 30, 2012 when it was 8.7%. This was a consequence of the increase in shareholders equity due to the capital increase operaion, and the better results of the period.

The annualized return on assets moved from 6.4% as of June 30, 2012 to 7.8% in June 30, 2013 as a result of the increase of the companys assets mainly due to the capital increase operation, and to the better result obtained this period.

Table 9

CASH FLOW

(Million Ch$)

(Thousand US$)

1H 2013

1H 2012

Var 2012-2013

Chg %

1H 2013

Collection classes provided by operating activities

Proceeds from sales of goods and services

3,403,040

3,901,455

(498,415)

(12.8%)

7,108,772

Cash receipts from royalties, fees, commissions and other revenue

54,000

39,315

14,684

37.4%

112,802

Receipts from contracts held for purposes of dealing or trading

-

-

-

-

Receipts from premiums and claims, annuities and other benefits from policies written

565

1,675

(1,110)

(66.3%)

1,180

Other cash receipts from operating activities

355,791

163,380

192,412

117.8%

743,230

Types of payments

Payments to suppliers for goods and services

(1,887,887)

(2,146,488)

258,602

12.0%

(3,943,696)

Payments from contracts held for dealing or trading

-

-

-

-

Payments to and on behalf of employees

(238,500)

(217,802)

(20,698)

(9.5%)

(498,214)

Payments for premiums and claims, annuities and other policy benefits underwritten

(151)

(2,137)

1,986

92.9%

(315)

Other payments for operating activities

(618,050)

(765,908)

147,858

19.3%

(1,291,074)

Dividends paid

-

-

-

-

Dividends received

-

-

-

-

Payments of interest classified as operating

-

-

Proceeds of interest received classified as operating

-

-

-

-

Income taxes refund (paid)

(267,481)

(328,957)

61,476

18.7%

(558,753)

Other inflows (outflows) of cash

(116,787)

(108,278)

(8,508)

(7.9%)

(243,961)

Net cash flows from (used in) operating activities

684,541

536,255

148,287

27.7%

1,429,970

Cash flows from (used in) investing activities

Cash flows from losing control of subsidiaries or other businesses

-

-

-

-

Cash flows used for control of subsidiaries or other businesses

(1,362)

(4,590)

3,228

70.3%

(2,845)

Acquisitions of associates

-

-

-

-

Other cash receipts from sales of equity or debt instruments of other entities

89,311

-

89,311

186,566

Other payments to acquire equity or debt instruments of other entities

(629,659)

-

(629,659)

(1,315,325)

Other proceeds from the sale of interests in joint ventures

-

-

-

-

Cash flows used for the purchase of non-controlling

-

-

-

-

Loans to related companies

(2,397)

-

(2,397)

(5,007)

Proceeds from sales of property, plant and equipment

5,046

422

4,624

1095.8%

10,541

Purchase of property, plant and equipment

(297,827)

(237,641)

(60,187)

(25.3%)

(622,146)

Proceeds from sales of intangible assets

-

-

-

-

Acquisitions of intangible assets

(81,126)

(96,345)

15,219

15.8%

(169,468)

Proceeds from other long term assets.

-

-

-

-

Purchase of other long-term assets

(1,772)

(1,776)

4

0.2%

(3,702)

Other inflows (outflows) of cash

-

-

-

-

Prepayments and third party loans

-

-

-

-

Proceeds from prepayments reimbursed and third party loans

-

-

-

-

Payments arising from futures contracts, forwards, options and swap

-

-

-

-

Cash receipts from futures contracts, forwards, options and swap

-

-

-

-

Proceeds from related

-

-

-

-

Dividends received

4,238

2,929

1,309

44.7%

8,854

Proceeds of interest received classified as operating

38,985

33,412

5,574

16.7%

81,438

Income taxes refund (paid)

-

-

-

-

Other inflows (outflows) of cash

(568)

(12)

(556)

(4696.2%)

(1,187)

Net cash flows from (used in) investing activities

(877,130)

(303,600)

(573,530)

(188.9%)

(1,832,279)

Proceeds from shares issue

1,142,754

-

1,142,754

2,387,152

Proceeds from issuance of other equity instruments

-

-

-

-

Payments to acquire or redeem the shares of the entity

-

-

-

-

Payments for other equity interests

-

-

-

-

Total loan amounts from

74,984

299,278

(224,295)

(74.9%)

156,637

Proceeds from term loans

45,001

221,927

(176,927)

(79.7%)

94,004

Proceeds from short-term loans

29,983

77,351

(47,368)

(61.2%)

62,632

Repayments of borrowings

693

11,985

(11,292)

(94%)

1,448

Payments of loans

(145,664)

(421,912)

276,248

65.5%

(304,283)

Payments of finance lease liabilities

(14,337)

(2,542)

(11,795)

(464.1%)

(29,949)

Repayment of loans to related companies

-

-

-

-

Proceeds from government grants

-

-

-

-

Dividends paid

(367,600)

(427,426)

59,826

14.0%

(767,897)

Payments of interest classified as operating

(108,589)

(136,322)

27,733

20.3%

(226,837)

Income taxes refund (paid)

-

-

-

-

Other inflows (outflows) of cash

(23,339)

(21,948)

(1,391)

(6.3%)

(48,754)

Net cash flows from (used in) financing activities

558,901

(698,887)

1,257,789

180.0%

1,167,516

Net increase (decrease) in cash and cash equivalents, before the effect of changes in the exchange rate

366,312

(466,233)

832,545

178.6%

765,207

Effect of exchange rate changes on cash and cash equivalents

(14,041)

(30,924)

16,883

54.6%

(29,331)

Increase (decrease) in cash and cash equivalents

352,271

(497,157)

849,428

170.9%

735,876

Cash and cash equivalents at beginning of period

815,832

1,187,684

(371,852)

(31.3%)

1,704,230

Cash and cash equivalents at end of period

1,168,103

690,527

477,576

69.2%

2,440,106



The Company generated a positive net cash flow during the period of Ch$ 684,541 million, a 27.7% increase compared to first half 2012. This is mainly composed of cash receipts from sales and royalties of Ch$3,457,040 million and other operating flows of Ch$ 356,356 million, partially offset by payments to suppliers of Ch$ 1,887,887 million, other operation payments of Ch$ 1,002,468 million and payment to employees of Ch$ 238,500 million.

Investment activities generated a negative net cash flow of Ch$ 877,130 million, a decrease in cash of 188.9% or Ch$ 573,530 million compared to the first half 2012. These disbursements relate mainly to investments in deposits over 90 or more days of Ch$540,348 million, the acquisition of properties, plant and equipment of Ch$ 297,827 million, the incorporation of intangible assets (IFRIC 12) of Ch$ 81,126 million, offset in part by interests received of Ch$38,985 million and other cash inflows of Ch$3,186 million.

Financing activities generated a net positive cash flow of Ch$ 558,901 million, mainly due to the issuance of new shares of Ch$ 1,142,754 million and loan suscriptions of Ch$ 74,984 million. This was partially offset by dividends payment of Ch$ 367,600 million, loan payments of Ch$ 160,001 million, interest payments of Ch$108,589 million and other financing disbursements of Ch$ 22,646 million.

Table 10

Cash Flow

Interest Received

Dividends Received

Capital Reductions

Others

Total Cash Received

(Thousand US$)

1H 2013

1H 2012

1H 2013

1H 2012

1H 2013

1H 2012

1H 2013

1H 2012

1H 2013

1H 2012

Argentina

-

-

-

-

-

-

-

-

-

-

Peru

-

-

5,921.3

8,341.3

-

-

-

-

5,921.3

8,341.3

Brazil

-

-

-

-

-

-

-

-

-

-

Colombia

-

-

14,008.3

27,754.5

-

-

-

-

14,008.3

27,754.5

Others

-

-

-

-

-

-

-

-

-

-

Total

-

-

19,929.6

36,095.8

-

-

-

-

19,929.6

36,095.8

Table 11

Payments for Additions of Fixed Assets

Depreciation

Million Ch$

Thousand US$

Million Ch$

Thousand US$

1H 2013

1H 2012

1H 2013

1H 2013

1H 2012

1H 2013

Endesa Chile

150,249

116,450

313,862

93,821

90,571

195,987

Cachoeira

3,032

2,959

6,334

3,007

3,198

6,281

Endesa Fortaleza

5,997

1,694

12,527

3,080

3,545

6,434

Cien

3,176

1,452

6,634

6,980

7,631

14,581

Chilectra S.A.

20,743

3,508

43,331

12,333

12,855

25,763

Edesur

56,001

54,862

116,983

6,556

7,335

13,695

Edelnor

22,809

19,333

47,647

11,650

10,967

24,336

Ampla (*)

53,297

55,719

111,335

19,610

26,440

40,964

Coelce (*)

27,829

40,626

58,133

14,022

16,712

29,291

Codensa

33,826

30,623

70,661

31,216

33,741

65,209

Inmobiliaria Manso de Velasco Ltda.

49

1,493

102

122

123

255

Enersis holding and investment companies

1,945

722

4,063

735

663

1,535

Cemsa

-

-

-

11

-

23

Dock Sud

-

-

-

1,849

-

3,862

Piura

-

-

-

623

-

1,301

Total

378,953

329,441

791,613

205,615

213,781

429,519

(*) includes intangible assets concessions



The Groups activities are subject to a broad range of governmental standards and environmental regulations. Any modification of such standards and regulations may affect the Groups activities, economic situation and operating results.

The Groups distribution activity is subject to a wide range of rules regarding tariffs and other issues that govern their activities in each of the countries where it operates and which could modify distribution subsidiaries operating results.

The Groups generation activity is subject to existing hydrological and weather conditions in the geographic zones in which the Groups hydroelectric generating plants are located. Commercial policies have been planned in order to moderate the possible impact of changes in these variables.

Groups activities are subject to certain environmental regulation which Enersis fulfills constantly. Modifications applied on such regulations may affect the operations, economic condition or the results of these operations.

Enersis and its operating subsidiaries are subject to environmental regulations which, among other things, require the company to conduct environmental impact studies for future projects, obtaining permits, licenses and other authorizations and the fulfillment of all requirements of those licenses, permits and norms. As any other regulated company, Enersis cannot guarantee:

That laws or regulations may not change or be interpreted in a manner that could adversely affect the operations or the plans for companies in which Enersis or its subsidiaries hold investments.

Enersis groups operations include hydroelectric generation and therefore depend on the hydrological conditions at any time in the broad geographical zones where its hydroelectric generation installations are located. If hydrological conditions produce droughts or other conditions that negatively affect hydroelectric generation, the results could be adversely affected. Enersis has therefore defined as an essential part of its commercial policy not to contract 100% of its total capacity. The electricity business is also affected by atmospheric conditions like average temperatures which govern consumption. The different weather conditions can produce differences in the margin obtained by the business.

Financial situation and the results from operations could be adversely affected if risk exposure werent efficiently managed in regards to interest rates, prices of commodities, and exchange rates.

Interest rate variations modify the fair value of those assets and liabilities that accrue a fixed interest rate, as well as the future flows of assets and liabilities pegged to a variable interest rate.

In compliance with our current interest rate hedging policy, the portion of fixed and/or hedged debt to the total net debt was 64% as of June 30, 2013 on a consolidated basis.

Depending on the Groups estimates and debt structure objectives, hedging transactions take place hiring derivatives that mitigate these risks. Instruments currently used to accomplish the policy, are interest rate swaps.

June. 30 2013

Dic. 31 2012

%

%

Fixed Interest Rate

64%

60%

Variable Interest Rate

36%

40%

Total

100%

100%



In order to mitigate exchange rate risks, Enersis exchange rate hedging policy is based on cash flows and it strives to maintain a balance between dollar indexed flows and the asset and liability levels in such currency. Cross

currency swaps and exchange rate forwards are the instruments currently used in compliance with this policy. Likewise, the policy looks to refinance debts in each companys functional currency.

In order to reduce risks in extreme drought conditions, the company has designed a trading policy that defines sales commitment levels consistent with its generating plants firm energy in a dry year, including risk mitigation clauses in some unregulated clients contracts.

In view of the operative conditions by the electricity generation market in Chile has experienced, like extreme drought and rising oil prices, the company has decided to hire a derivative to place a cap on the Brent price for consumption. As of June 30, 2013 there are no outstanding coverage instruments and instruments taken in the past have been specific and for no considerable monetary amounts. Market and operative conditions will be constantly analyzed to adjust the volume hedged or take new hedges for the following months.

In engaging committed long term credit facilities and short term financial investments the Group maintains a consistent liquidity policy, for the amounts required to support projected needs for the period, contingent with the situation and the expectations in the debt and capital markets.

As of June 30, 2013, the Enersis Group held liquidity in the amount of Ch$ 1,168,103 million in Cash and Cash Equivalent and Ch$ 214,805 million in committed long term credit lines. As of December 31, 2012, the Enersis Group held liquidity in the amount of Ch$ 815,832 million in Cash and Cash Equivalent and Ch$240,680 million in committed long term credit lines.

Credit risk in accounts receivable, originating from trading activities, has been historically very limited given that the short term collection conditions with customers doesnt allow them to individually accumulate significant amounts. Additionally, in the case of the so-called unregulated customers of our electricity generation and distribution business, a formal procedure is applied to control the credit risk, using a systematic evaluation of our counterparties, index definition and credit risk factors by virtue of which the contracts are approved or additional guarantee requirements are defined.

Furthermore, in our electricity generating business, in the event of non-payment, some countries allow power supply cut-offs, and in almost all contracts a lack of payment is established as cause for contract termination. For this purpose, credit risks are constantly monitored and the maximum amounts exposed to payment risks are measured, which are limited.

In turn, in our electricity distribution business, the energy supply cut-off is a power held by our companies in case of default by our customers, applied in accordance with the applicable regulation in each country, enabling the credit risk evaluation and control process, which is also limited.

Surplus cash flow investments are placed in prime national and foreign financial entities (with an investment grade equivalent risk rating) with limits established for each entity.

In the selection of banks for investment, the Group considers those that hold two investment grade classifications, according to the three main international rating agencies (Moodys, S&P and Fitch Ratings).

Positions are backed up by treasury bonds from the country of operations and instruments issued by the most reputable banks, favoring, wherever possible, the first ones.

Derivatives are engaged with highly solvent entities; about 80% of operations are conducted with entities that hold an A- or higher rating.

The Enersis Group measures the Value at Risk (VaR) of its debt and financial derivatives positions in order to guarantee that the risk taken by the company remains consistent with the risk exposure defined by Management, thus restricting the volatility of its financial results.

The calculated Value at Risk represents the possible value loss of the aforementioned positions portfolio over one day time horizon with 95% of confidence.

The calculation of VaR is based on generating possible future scenarios (at one day) of market values (both spot and term) for the risk variables, using Bootstrapping methodology. The number of scenarios generated ensures compliance with the simulation convergence criteria. A matrix of volatilities and correlations between the various risk variables calculated based on the historical values of the logarithmic price return, has been applied to simulate the future price scenario.

Once the price scenarios have been obtained, the fair value of the portfolio is calculated using such scenarios, obtaining a distribution of possible values at one day. The one-day 95% confidence VaR number is calculated as the 5% percentile of the potential increases in the fair value of the portfolio in one day.

The various debt positions and financial derivatives included in the calculation have been valued consistently using the financial capital calculation methodology reported to Management.

Financial Positions

June. 30

2013

Dec. 31

2012

Th Ch$

Th Ch$

Interest Rate

19,745,371

15,933,808

Exchange Rate

4,101,720

2,346,380

Correlation

(932,656)

(468,249)

Total

22,914,526

17,811,939



A portion of Enersis and Endesa Chiles debt is subject to cross default provisions. If certain defaults in debt of certain specific subsidiaries are not remedied within specified grace periods, a cross default could affect Endesa Chile and Enersis, and under certain scenarios, debts at the holding company level could be accelerated.

Nonpayment after any applicable grace period of the debts of Enersis and Endesa Chile, and in the case of Enersis, its subsidiaries Endesa Chile and Chilectra, with an individual principal amount outstanding in excess of US$ 50 million (or its equivalent in other currencies), and with a missed payment also in excess of US$ 50 million, could give rise to a cross default of several bank revolving debt facilities at the Endesa Chile and Enersis levels. Furthermore, some of these debt facilities are also subject to cross acceleration provisions in the event of a default in other debt of the companies mentioned above, for reasons other than payment default, for events such as bankruptcy, insolvency proceedings, and materially adverse governmental or legal actions, in all cases for amounts in excess of US$ 50 million.

Similarly, nonpayment after any given applicable grace period - of the debts of Enersis and Endesa Chile or any of their Chilean subsidiaries, in single indebtedness in default with a principal in excess of US$ 30 million, could potentially give rise to a cross default of Enersis and Endesa Chile Yankee bonds.

Finally, in the case of local bonds of Enersis and Endesa Chile, prepayment is triggered only as a result of a default of the Issuer.

There are no clauses in the credit agreements by which changes in the corporate or debt classification of these companies from risk rating agencies could trigger prepayments

In Argentina, the operating income for the period amounted to Ch$ 7,320 million, representing an increase of Ch$ 4,485 million when compared to the first half 2012. This is primarily explained by a Ch$28,191 million decrease in procurement and service costs, mainly explained by lower fuel consumption cost of Ch$ 32,758 million. This was partially offset by lower energy sales revenues of Ch$29,497 million

Endesa Costaneras operating income increased by Ch$ 9,713 million, showing a lower negative result of Ch$1,777 million in the second quarter of 2013. This is mainly explained by a 26.1% reduction in fuel consumption cost, partially offset by a 21.7% reduction in energy sales revenues.

The net effect of translating the financial statements from Argentine pesos to Chilean pesos in both periods led to a 16.8% decrease in Chilean pesos in June 2013, when compared to June 2012.

Table 12

Endesa Costanera

Million Ch$

Thousand US$

1H 2013

1H 2012

Var 2012-2013

Chg%

1H 2013

Operating Revenues

133,089

157,992

(24,903)

(15.8%)

278,017

Procurement and Services

(111,528)

(144,119)

32,592

22.6%

(232,975)

Contribution Margin

21,562

13,873

7,689

55.4%

45,041

Other Costs

(14,785)

(14,622)

(163)

(1.1%)

(30,885)

Gross Operating Income (EBITDA)

6,777

(749)

7,526

1004.5%

14,156

Depreciation and Amortization

(8,554)

(10,741)

2,187

20.4%

(17,868)

Operating Income

(1,777)

(11,490)

9,713

84.5%

(3,712)

Figures may differ from those accounted under Argentine GAAP.

Table 12.1

Endesa Costanera

1H 2013

1H 2012

Var 2012-2013

Chg%

GWh Produced

3,644

4,424

(780)

(17.6%)

GWh Sold

3,898

4,537

(639)

(14.1%)

Market Share

6.4%

7.6%

(1.1) pp.



El Chocns operating income reached Ch$ 5,251 million, a 58.3% decrease when compared to the first half of 2013. This result is mainly explained by a 31.4% decline in energy sales revenues, slightly offset by lower other procurement and service costs of 39.0%.

Table 13

El Chocn

Million Ch$

Thousand US$

1H 2013

1H 2012

Var 2012-2013

Chg%

1H 2013

Operating Revenues

16,821

24,538

(7,717)

(31.4%)

35,138

Procurement and Services

(6,639)

(7,057)

418

5.9%

(13,869)

Contribution Margin

10,182

17,481

(7,299)

(41.8%)

21,269

Other Costs

(3,792)

(3,529)

(263)

(7.5%)

(7,921)

Gross Operating Income (EBITDA)

6,390

13,952

(7,562)

(54.2%)

13,348

Depreciation and Amortization

(1,139)

(1,356)

217

16.0%

(2,378)

Operating Income

5,251

12,596

(7,345)

(58.3%)

10,969

Figures may differ from those accounted under Argentine GAAP.

Table 13.1

El Chocn

1H 2013

1H 2012

Var 2012-2013

Chg%

GWh Produced

837

1,295

(459)

(35.4%)

GWh Sold

1,386

1,498

(112)

(7.5%)

Market Share

2.3%

2.5%

(0.2) pp.



Since the second quarter of 2013, Dock Sud is consolidated by Enersis as a consequence of the incorporporation of Cono Sur assets to the company after the capital increase operation.

Considering only the second quarter of this year, Operating Income of the company was Ch$ 2,610 million while Ebitda reached Ch$ 4,496 million.

Table 14

Dock Sud

Million Ch$

Thousand US$

2Q 2013

Var 2012-2013

Chg%

1H 2013

Operating Revenues

13,376

27,942

Procurement and Services

(6,302)

(13,165)

Contribution Margin

7,074

14,777

Other Costs

(2,615)

(5,463)

Gross Operating Income (EBITDA)

4,459

9,314

Depreciation and Amortization

(1,849)

(3,863)

Operating Income

2,610

5,451

Figures may differ from those accounted under Argentine GAAP.

Table 14.1

Dock Sud

2Q 2013

Chg%

GWh Produced

1,024

GWh Sold

1,176

Market Share

1.9%



On May 7, 2013, was approved the resolution 250/2013 of the Secretariat of energy, which recognizes the revenues of costs not transferred to tariff since 2007 regarding the application of the cost monitoring mechanism (MMC, in its Spanish acronym). These revenues were compensated with the amounts already collected by the Company from the rational use of electric energy program (PUREE, in its Spanish acronym) and with other obligations with CAMMESA. This revenues amounted to Ch$ 193,798 million, which primary explains the Ch$ 166,161 million increase in Ebitda and the Ch$ 171,793 million increase in Net Income.

Physical sales decreased by 0.2% reaching 8,686 GWh. The energy losses in this period were 10.7%, 0.1 p/p higher than 1H 2012, and the number of customers increased by 39 thousand new customers, exceeding 2.4 million.

Table 15

Edesur

Million Ch$

Thousand US$

1H 2013

1H 2012

Var 2012-2013

Chg%

1H 2013

Operating Revenues

343,754

165,014

178,740

108.3%

718,083

Procurement and Services

(83,354)

(89,821)

6,467

7.2%

(174,122)

Contribution Margin

260,399

75,193

185,207

246.3%

543,961

Other Costs

(111,464)

(92,418)

(19,046)

(20.6%)

(232,842)

Gross Operating Income (EBITDA)

148,936

(17,225)

166,161

964.7%

311,119

Depreciation and Amortization

(7,252)

(7,830)

577

7.4%

(15,150)

Operating Income

141,683

(25,054)

166,738

665.5%

295,969

Figures may differ from those accounted under Argentine GAAP.

Table 15.1

Edesur

1H 2013

1H 2012

Var 2012-2013

Chg%

Customers (Th)

2,430

2,391

39

1.6%

GWh Sold

8,686

8,672

14

0.2%

Clients/Employee

825

839

(15)

(1.8%)

Energy Losses %

10.7%

10.6%

0.1%

Table 16

Endesa Brasil

(Million Ch$)

(Thousand US$)

1H 2013

1H 2012

Var 2012-2013

Chg %

1H 2013

Sales

858,430

1,021,469

(163,039)

(16.0%)

1,793,215

Other operating income

76,836

75,894

942

1.2%

160,506

Total Revenues

935,266

1,097,363

(162,097)

(14.8%)

1,953,722

Procurements and Services

(528,840)

(642,182)

113,342

17.6%

(1,104,720)

Contribution Margin

406,426

455,181

(48,756)

(10.7%)

849,002

Other Costs

(120,697)

(128,624)

7,927

6.2%

(252,130)

Gross Operating Income (EBITDA)

285,729

326,558

(40,829)

(12.5%)

596,872

Depreciation and Amortization

(46,830)

(57,527)

10,697

18.6%

(97,825)

Reversal of impairment profit (loss) recognized in profit or loss

(11,693)

(12,474)

781

6.3%

(24,426)

Operating Income

227,206

256,557

(29,351)

(11.4%)

474,621

Net Financial Income

(3,417)

(48,486)

45,069

93.0%

(7,138)

Financial income

79,756

56,725

23,031

40.6%

166,606

Financial expenses

(82,344)

(103,012)

20,668

20.1%

(172,012)

Income (Loss) for indexed assets and liabilities

-

-

-

-

Foreign currency exchange differences, net

(829)

(2,199)

1,370

62.3%

(1,732)

Gains

2,092

2,641

(549)

(20.8%)

4,370

Losses

(2,921)

(4,840)

1,919

39.6%

(6,102)

Net Income from Related Comp. Cons. by the Prop. Eq. Method

-

0

(0)

(100.0%)

-

Net Income from Other Investments

0

-

0

0

Net Income from Sales of Assets

-

-

-

-

Net Income before Taxes

223,789

208,070

15,718

7.6%

467,483

Income Tax

(51,151)

(46,874)

(4,277)

(9.1%)

(106,851)

NET INCOME

172,638

161,197

11,441

7.1%

360,632

Net Income Attributable to Owners of the Company

120,266

117,709

2,557

2.2%

251,229

Net Income Attributable to Minority Interest

52,372

43,488

8,884

20.4%

109,403



In Brazil, the operating income of our subsidiaries amounted to Ch$ 77,575 million, 11.6% lower than in same period of last year, when operating results amounted to Ch$ 87,717 million.

The operating income of Cachoeira Dourada was Ch$ 40,152 million, 14.3% lower than in first half 2012. This is mainly explained by lower energy sales revenues of Ch$ 10,122 million, equivalent to 14.0% decrease. This was partially offset by decreases of 24.2% and 28.7% in transportation costs and other procurement and service cost respectively.

The effect of converting these financial statements from Brazilian reals to Chilean pesos in both periods was a 10.9% reduction in Chilean peso terms in June 2013 when compared to June 2012.

Table 17

Cachoeira

Million Ch$

Thousand US$

1H 2013

1H 2012

Var 2012-2013

Chg%

1H 2013

Operating Revenues

62,070

72,195

(10,125)

(14.0%)

129,661

Procurement and Services

(15,854)

(18,969)

3,115

16.4%

(33,118)

Contribution Margin

46,216

53,226

(7,010)

(13.2%)

96,543

Other Costs

(3,058)

(3,137)

79

2.5%

(6,388)

Gross Operating Income (EBITDA)

43,159

50,089

(6,931)

(13.8%)

90,156

Depreciation and Amortization

(3,007)

(3,240)

233

7.2%

(6,281)

Operating Income

40,152

46,850

(6,698)

(14.3%)

83,875

Figures may differ from those accounted under Brazilian GAAP.

Table 17.1

Cachoeira

1H 2013

1H 2012

Var 2012-2013

Chg%

GWh Produced

936

1,879

(943)

(50.2%)

GWh Sold

1,814

2,145

(331)

(15.4%)

Market Share

0.8%

1.0%

(0.2) pp.



The operating income of Endesa Fortaleza (CGTF) amounted to Ch$ 22,478 million, evidencing a 6.1% decrease as compared to the same period in previous year. This is mainly explained by increases in fuel purchases costs of Ch$ 11,032 million and in other procurement and service costs of Ch$ 8,720 million. This was partially offset by an increase in operating revenues of Ch$ 19,474 million, due to a 29.6% increase in energy sales revenues.

Table 18

Fortaleza

Million Ch$

Thousand US$

1H 2013

1H 2012

Var 2012-2013

Chg%

1H 2013

Operating Revenues

85,189

65,715

19,474

29.6%

177,955

Procurement and Services

(56,589)

(34,261)

(22,329)

(65.2%)

(118,212)

Contribution Margin

28,599

31,454

(2,855)

(9.1%)

59,743

Other Costs

(3,041)

(3,945)

904

22.9%

(6,352)

Gross Operating Income (EBITDA)

25,559

27,510

(1,951)

(7.1%)

53,391

Depreciation and Amortization

(3,080)

(3,583)

503

14.0%

(6,435)

Operating Income

22,478

23,926

(1,448)

(6.1%)

46,956

Figures may differ from those accounted under Brazilian GAAP.

Table 18.1

Fortaleza

1H 2013

1H 2012

Var 2012-2013

Chg%

GWh Produced

1,280

482

798

165.5%

GWh Sold

1,623

1,398

224

16.0%

Market Share

0.7%

0.6%

0.1 pp.



Our transmission subsidiary, CIEN, showed a decrease in operating income of Ch$ 2,198 million, reaching Ch$ 16,472 million . This is explained by a decrease of 9.3% in sales revenues, partially offset by decreases of 16.3% and 7.9% in energy purchases costs and other procurement and service costs respectively.

Table 19

Cien (*)

Million Ch$