==============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-1
TENDER U.S. OFFER STATEMENT PURSUANT TO SECTION 14(d)(1) OF
THE SECURITIES EXCHANGE ACT OF 1934
AMENDMENT NO. 6
Empresa Nacional de Electricidad S.A.
(Name of Subject Company)
Duke Energy International, L.L.C.
Duke Energy Corporation
(Bidders)
Common Stock, no par value
(including that represented by
American Depositary Shares) 29244T101
(Title of Class of Securities) (CUSIP Number of Class of Securities)
Carol Graebner, Esq.
General Counsel
Duke Energy International, L.L.C.
5400 Westheimer Court
Houston, Texas 77056-5310
Telephone: (713) 627-6542
Facsimile: (713) 627-5219
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications on Behalf of Bidders)
----------------------------------
Copy to:
Frederick S. Green, Esq.
Ellen J. Odoner, Esq.
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153-0119
Telephone: (212) 310-8000
Facsimile: (212) 310-8007
(Continued on following pages)
(Page 1 of 26)
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<PAGE>
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1 NAME OF REPORTING PERSONS: Duke Energy International, L.L.C.
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S.S. OR IRS IDENTIFICATION NO. OF ABOVE PERSONS: 56-2051206
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [x]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS: AF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(e) OR 2(f) N/A
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION: State of Delaware
- --------------------------------------------------------------------------------
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 0
- --------------------------------------------------------------------------------
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES
CERTAIN SHARES N/A
- --------------------------------------------------------------------------------
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7) N/A
- --------------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON OO
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Page 2 of 26
<PAGE>
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1 NAME OF REPORTING PERSONS: Duke Energy Global Asset Development, Inc.
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S.S. OR IRS IDENTIFICATION NO. OF ABOVE PERSONS: 88-0366429
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [x]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS: AF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(e) OR 2(f) N/A
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION: State of Navada
- --------------------------------------------------------------------------------
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 0
- --------------------------------------------------------------------------------
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES
CERTAIN SHARES N/A
- --------------------------------------------------------------------------------
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7) N/A
- --------------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON CO
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Page 3 of 26
<PAGE>
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1 NAME OF REPORTING PERSONS: Duke Energy Services, Inc.
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S.S. OR IRS IDENTIFICATION NO. OF ABOVE PERSONS: 48-0650320
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [x]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS: AF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(e) OR 2(f) N/A
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION: State of Delaware
- --------------------------------------------------------------------------------
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 0
- --------------------------------------------------------------------------------
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES
CERTAIN SHARES N/A
- --------------------------------------------------------------------------------
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7) N/A
- --------------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON CO
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Page 4 of 26
<PAGE>
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1 NAME OF REPORTING PERSONS: PanEnergy Corp.
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S.S. OR IRS IDENTIFICATION NO. OF ABOVE PERSONS: 74-2150460
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [x]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS: AF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(e) OR 2(f) N/A
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION: State of Delaware
- --------------------------------------------------------------------------------
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 0
- --------------------------------------------------------------------------------
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES
CERTAIN SHARES N/A
- --------------------------------------------------------------------------------
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7) N/A
- --------------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON CO
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Page 5 of 26
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1 NAME OF REPORTING PERSONS: Duke Capital Corporation
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S.S. OR IRS IDENTIFICATION NO. OF ABOVE PERSONS: 51-0282142
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [x]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS: BK, WC,OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(e) OR 2(f) N/A
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION: State of Delaware
- --------------------------------------------------------------------------------
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 0
- --------------------------------------------------------------------------------
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES
CERTAIN SHARES N/A
- --------------------------------------------------------------------------------
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7) N/A
- --------------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON CO
- --------------------------------------------------------------------------------
Page 6 of 26
<PAGE>
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1 NAME OF REPORTING PERSONS: Duke Energy Corporation
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S.S. OR IRS IDENTIFICATION NO. OF ABOVE PERSONS: 56-0205520
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [x]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS: N/A
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(e) OR 2(f) N/A
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION: State of North Carolina
- --------------------------------------------------------------------------------
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 0
- --------------------------------------------------------------------------------
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES
CERTAIN SHARES N/A
- --------------------------------------------------------------------------------
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7) N/A
- --------------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON CO
- --------------------------------------------------------------------------------
Page 7 of 26
<PAGE>
This Amendment No. 6 amends and supplements the Tender Offer Statement
on Schedule 14D-1 filed on February 25, 1999, as amended, by Duke Energy
International, L.L.C., a Delaware limited liability company (the "BIDDER") and a
wholly-owned, indirect subsidiary of Duke Energy Corporation, a North Carolina
corporation ("Duke"), with respect to the offer by Bidder to purchase for cash
up to 501,947,400 shares of Common Stock, no par value (the "SHARES"), of
Empresa Nacional de Electricidad S.A. (the "COMPANY"), a publicly traded stock
corporation (sociedad anonima abierta) incorporated under the laws of the
Republic of Chile, including Shares represented by American Depositary Shares,
each representing 30 Shares and evidenced by American Depositary Receipts.
ITEM 10. ADDITIONAL INFORMATION.
Clause (f) of Item 10 is supplemented as follows:
By letter dated March 15, 1999, the foreign investment committee of the
Republic of Chile notified the Purchaser that its draft foreign investment
contract with respect to the purchase of the Shares pursuant to the Offers by
Duke and its affiliates had been approved by such committee. The effectiveness
of such contract is a condition to the U.S. Offer to Purchase. See Section 15 of
the U.S. Offer to Purchase.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
EXHIBIT NUMBER DESCRIPTION
- -------------- -----------
Exhibit (a)(23) English translation of a letter and background information
on the history of Duke Energy from Bruce A. Williamson to
Endesa-Chile Shareholders.
Exhibit (a)(24) Press Release and table of Endesa-Chile's financial results
for the 1998 fiscal year.
Page 8 of 26
<PAGE>
SIGNATURES
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: March 16, 1999
DUKE ENERGY INTERNATIONAL, L.L.C.
By: /s/ BRUCE A. WILLIAMSON
---------------------------------------------
Name: Bruce A. Williamson
Title: President and Chief Executive Officer
DUKE ENERGY CORPORATION
DUKE ENERGY GLOBAL ASSET DEVELOPMENT, INC.
DUKE ENERGY SERVICES, INC.
PANENERGY CORP.
DUKE CAPITAL CORPORATION
By: /s/ BRUCE A. WILLIAMSON
---------------------------------------------
Name: Bruce A. Williamson
Title: Authorized person
Page 9 of 26
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
(a)(23) English translation of a letter and background information
on the history of Duke Energy from Bruce A. Williamson to
Endesa-Chile Shareholders.
(a)(24) Press Release and table of Endesa-Chile's financial results
for the 1998 fiscal year.
Page 10 of 26
EXHIBIT (A)(23)
Page 11 of 26
<PAGE>
ENGLISH TRANSLATION
[Duke Energy International letterhead]
Date
Dear Endesa-Chile Shareholder:
Duke Energy considers Latin America to be one of the largest and most dynamic
energy markets in the world, and views Endesa-Chile as a leading participant in
this market. It is for this reason that we desire to acquire 51% of
Endesa-Chile. If we are successful, we intend for Endesa-Chile to become Duke's
power generation investment vehicle for growth and expansion in Latin America.
We believe that, together, Endesa-Chile and Duke would become the first truly
regional power generation and energy trading and marketing force in Latin
America.
I thought you would appreciate learning more about Duke Energy. Attached is
brief background information on our company's history, experience and corporate
values for environmental stewardship and community leadership.
If you would like to learn more about us, please visit us on the Internet at
www.duke-energy.com. Spanish language information about our tender offer for
Endesa-Chile may be found at www.duke-energy.com/soamer.
In closing, please remember to submit your proxy for the April 8 Endesa-Chile
shareholder's meeting. With your support for the change to Endesa-Chile's
concentration limits, we will be one step closer to what we know will be a long
and rewarding relationship with the people of Chile and South America.
Sincerely,
Bruce A. Williamson
President and CEO
Duke Energy International
Enclosure
Page 12 of 26
<PAGE>
DUKE ENERGY CORPORATION
Duke Energy Corporation is a global energy company with more than $26 billion in
assets. Headquartered in Charlotte, North Carolina, USA, the company reaches
into more than 50 countries producing energy, transporting energy, marketing
energy and providing energy services. The company employs 22,000 people
worldwide.
Duke Energy companies almost 100 years of power generation expertise; more than
60 years of natural gas experience; and more than 10 years of experience as an
owner and operator of independent power projects around the world.
When ranked according to market capitalization, Duke Energy is one of the top
ten energy companies in the world at almost $21 billion.
In November 1998, London's Financial Times newspaper ranked Duke Energy as the
world's most respected utility, based on a poll of CEOs from 53 countries.
Electric Light & Power magazine's December `98 issue names Duke Energy as
"Utility of the Year." This is the first time in 29 years that a company has won
that award twice. Earlier in 1998, Fortune magazine placed Duke Energy on its
list of most respected companies. Not only are these honors testament to our
business practices but to our environmental and corporate citizenship commitment
as well.
DUKE ENERGY'S BUSINESSES
In the United States, Duke Energy companies provide electric service to
approximately 2 million customers in North Carolina and South Carolina and
operate interstate pipelines that deliver natural gas to various regions of the
country. Also, the company is one of the nation's largest natural gas gatherers
and processors and markets liquefied petroleum gases and related energy services
throughout the United States and Canada. A joint venture with Mobil makes Duke
Energy one of the leading marketers of natural gas and electricity in North
America.
Duke Energy companies combine natural gas and electric assets worldwide. Duke
Energy's engineering, construction and operating skills serve energy producers
and consumers - and cover the entire energy value chain. The company's
technical, engineering and environmental services extend to a wide range of
energy and research facilities. This platform of skills and expertise allows
Duke Energy to market, manage and transport energy products and services on a
large scale to all major markets, including international markets from Calgary
to Sydney and Peru to Mauritius.
Duke Energy's strong financial position, solid operating base and depth and
breadth of resources and skills provide a firm foundation for meeting customer's
needs.
Page 13 of 26
<PAGE>
DUKE ENERGY INTERNATIONAL: PROVIDING ENERGY SOLUTIONS AROUND THE WORLD
Duke Energy International (DEI) is the international development and asset
management arm of Duke Energy. DEI develops, owns and operates energy projects
worldwide, providing comprehensive energy solutions for customers.
Currently, DEI is strategically focusing its development efforts in Latin
America, Asia Pacific and Europe. Its overall strategy is to become an
integrated energy company in each of its areas of operation. This is
accomplished by targeting countries or regions with a variety of energy needs
then applying the company's broad range of expertise to provide solutions.
Typically, DEI's initial asset investment in an area would be followed by
subsequent investments that enhance DEI's integrated approach. For instance:
In Latin America, DEI has ownership interest in almost 2,000 megawatts (MW) of
electric generating capacity in Argentina, Chile, Ecuador and Peru. Also in
Peru, it has interest in gas transmission and electric transmission, as well as
exploration and production rights in Blocks 85, 40 and 41.
Much of DEI's interest in Peru is tied to the Aguaytia Energy project -- Peru's
first integrated energy development effort. The project includes the first
commercial development of a natural gas field in the country and the
construction and operation of gas processing, electric power generation and
electric power transmission facilities. The multi-million dollar project began
operation the second quarter of 1998 bringing power across the Andes to Peru's
main electrical grid.
DEI announced significant Australian/Pacific Rim asset additions to its Asia
Pacific operations in 1998, including the $315 million acquisition of Broken
Hill Proprietary Company's (BHP) power business and the $270 million acquisition
of the Eastern Gas Pipeline Company.
The BHP Power acquisition includes a total capacity of almost 400 MW of
industrial power generation and transmission assets in Western Australia and New
Zealand as well as an interest in the 1,400-kilometer Goldfields Gas
Transmission Pipeline, also in Western Australia. Furthermore, DEI acquired the
rights to develop and operate the Eastern Gas Pipeline, an 800-kilometer
pipeline proposed to extend from eastern Australia's largest natural gas supply
area to Australia's largest city, Sydney.
Australia's energy industry is evolving into a competitive marketplace and DEI
is taking advantage of this changing environment. DEI entered the Australian
energy market earlier in 1998 with the purchase of the 627-kilometer Queensland
Gas Pipeline and the selection by the Tasmanian government to study the
prospects of bringing natural gas to the state.
Page 14 of 26
<PAGE>
Further on the international front, a consortium lead by DEI owns, operates and
maintains the 194 MW power generation and delivery system serving the P.T.
Freeport Indonesia's mining operation in Irian Jaya, Indonesia. Despite the
remote location and challenges presented by weather and fuel supply, the project
has an outstanding operating record.
Additionally, DEI is a partner in the world's largest chemical-grade methanol
and methyl tertiary butyl ether (MTBE) complex, located in Jubail, Saudi Arabia.
A LONG HISTORY OF POWER GENERATION EXCELLENCE
Duke Energy's roots are firmly grounded in the generation of power.
Duke Energy's electric operations business built and operated its firs
hydroelectric facility on the Catawba River in South Carolina A CENTURY AGO,
Duke Energy companies' expertise in hydro, fossil and nuclear generation and
operations is unequaled. The companies own, operate or have an interest in
almost 30,000 MW of electric generation capacity throughout the world.
Duke Energy's Electric Operations business segment operates an efficient
generating system that consists of 30 electric generating plants in North
Carolina and South Carolina (USA). Also, other Duke Energy companies own and
operate significant generating assets in the Northeast and California, in
addition to the international assets previously mentioned.
For the past two decades, Duke Energy companies have received annual recognition
from industry experts for operating the United States' most efficient
fossil-fueled power plant system. Electric Light & Power cited its electric
operations business' industry leading plant efficiencies and customer
satisfaction ratings among the reasons it named the company its 1998 Utility of
the Year.
The company's industrial and commercial customers have ranked Duke Energy's
electric transmission system in North Carolina and South Carolina as America's
most reliable over the past four years.
And perhaps the company's greatest recognition has come from the Edison Electric
Institute, the trade association representing U.S. investor-owned electric
utilities. In three consecutive decades, EEI has named Duke Energy's electric
operations business the winner of its prestigious Edison award -- presented
annually to America's most outstanding electric utility. The recipient in 1972,
1984 and 1995, the company is the only three-time winner.
Page 15 of 26
<PAGE>
A STRONG COMMITMENT TO THE ENVIRONMENT AND COMMUNITIES
Duke Energy's commitment to protecting the environment, conserving natural
resources and safeguarding the health and safety of employees and communities is
long-standing and deeply ingrained in the company's culture.
Duke Energy realizes that environmental stewardship and corporate responsibility
go hand-in-hand with the company's business operations. The company has found
through the years that its core values and a strong tradition of stewardship are
compatible with sound business practices.
PROTECTING THE ENVIRONMENT
It is Duke Energy's commitment that the company will use natural resources and
energy efficiently to reduce waste and emissions at their source. The company
will strive to improve operations with a focus on preventing environmental and
safety incidents and preserving public safety.
Duke Energy companies have garnered numerous environmental awards from agencies
such as the National Wildlife Federation and the American Fisheries Society. The
company understands that its actions have a broad effect on the surrounding
communities it serves.
Protecting and responsibly managing natural resources are critical to the
quality of life in the areas the company serve, the environment and Duke
Energy's long-term business success.
CORPORATE CITIZENSHIP
The way in which Duke Energy operates its our facilities, the jobs and economies
it supports, and the contributions the company makes to local education and
other endeavors all impact the communities in which it operates.
A great example of this is the impact the Aguaytia Energy project has had on
Peru. Children living deep within remote areas of Peru have a chance for
healthier lives and better educations because of Duke Energy's commitment to
helping local governments and communities. Some 4,000 school children in the
central jungle of Peru and in the Andes have school bags, pens, pencils, rulers
and writing books as a result of a program offered by employees of the Aguaytia
project.
Another program, conducted under the guidance of Peru's Ministry of Health,
hired medical personnel to vaccinate children for yellow fever. Project
employees devoted weekends to helping with the vaccinations.
The partners in the project realized the company's duty to go beyond simply
complying with laws and regulations by establishing a partnership with all
stakeholders in the project including the local communities in the vicinity of
construction and operations.
Page 16 of 26
<PAGE>
The Aguaytia project illustrates Duke Energy's commitment to the needs of the
communities it touches. Understanding these local needs - and responding to them
with local partners - is a vital component of our involvement in the communities
the company serves.
Last year, more than 4,700 active and retired employees of the company
participated in Duke Energy Volunteer Week. In 75 cities where Duke Energy
operates, employees participated in thousands of acts of community service from
building and painting to feeding and clothing -- all fitting reminders of Duke
Energy's commitment to corporate citizenship.
LOOKING TO THE FUTURE
The Duke Energy story stretches from Sydney, Australia, to Sable Island, Nova
Scotia, and selected points in between. The company is blazing new trails around
the world. Duke energy's regional focus in the United States and key
international markets enables the company to integrate assets and services at
the highest level.
As Duke Energy enters a new millennium, the company does so with a strong
financial operating base, a heritage of achievement and the combined business
and technological skills to create integrated projects and total energy
solutions for its customers worldwide.
# # #
Page 17 of 26
EXHIBIT (A)(24)
Page 18 of 26
<PAGE>
FOR IMMEDIATE RELEASE
For Additional Information:
Jaime Montero / Lionel Mancilla
Investor Relations
(56-2) 634-2329
Robin Weinberg
Dewe Rogerson Inc.
212-419-8309
E-mail: [email protected]
ENDESA - CHILE ANNOUNCES 1998 RESULTS
-------------------------------------
(Santiago, Chile, February 24, 1999) -- Empresa Nacional de Electricidad S.A.
"ENDESA-Chile" (NYSE: EOC) announced today its financial results for the 1998
fiscal year. These results are prepared in accordance with Chilean GAAP
(accounting for inflation and in real constant Chilean Pesos as of December 31,
1998).
The Company's results for the year 1998 include the consolidation of all of
Endesa's operational Chilean subsidiaries and the Argentine companies El Chocon
and Central Costanera, which includes CBA (Central Buenos Aires), as well as
Hidroelectrica de Betania and Emgesa in Colombia, the generating company
Cachoeira Dourada in Brazil and for the first time the Peruvian company Edegel.
HIGHLIGHTS FOR THE PERIOD:
o OPERATING INCOME significantly increased by 34.2 % to Ch$ 291,157 million
in the year 1998, compared to Ch$ 216,922 million in 1997. This is
primarily due to a 132.0 % increase in operating income derived from
generating companies abroad, which contributed Ch$ 201,357 million during
Page 19 of 26
<PAGE>
the year, compared to Ch$ 86,781 million in the same period of 1997. The
increase in operating income of foreign investments is due to the
improvement of the operations in Argentina and the consolidation of
Hidroelectrica de Betania and Emgesa in Colombia, Cachoeira Dourada in
Brazil and the consolidation of the Peruvian company Edegel for the first
time. In Chile the operating income decreased 31.2 % to Ch$ 89,230 million
for the year 1998 compared to 1997.
o NET EARNINGS decreased 63.1 % to Ch$ 45,177 million during 1998, compared
to Ch$ 122,446 million in 1997. This is basically a result of a loss in
non-operating results due to a Ch$ 23,612 million loss produced by monetary
correction, this loss is basically explained by the revaluation of 3.3 % of
the US$ Dollar versus the Chilean Peso in the period, compared to a gain of
Ch$ 27,260 million in the same period of 1997 and an increase in interest
expenses from Ch$ 116,487 million in 1997 compared to Ch$ 163,288 million
in 1998. Additionally, minority interest increased Ch$ 53,676 million in
1998 compared to 1997.
o OPERATING REVENUES increased to Ch$ 811,612 million in 1998, an increase of
21.4 % compared to 1997. The increase is primarily a result of the
consolidation of the revenues of Hidroelectrica de Betania and Emgesa in
Colombia, which contributed Ch$ 200,901 million, 59.4 % increase compared
to 1997, and Cachoeira Dourada in Brazil, which contributed Ch$ 60,524
million, a 238.0 % increase compared to 1997. Operating revenues of energy
sales in Chile, declined by 11.1 % to Ch$ 230,718 million in the year 1998
compared to the same period in 1997. This decrease is primarily due to
Page 20 of 26
<PAGE>
lower revenues from energy sales as a result of an approximate 3.3 %
reduction in average sales price and a 8.2 % decrease in total physical
sales due to lower spot sales derived from the extreme drought that has
affected Chile during the period, even though contractual sales increased
4.2 % during 1998. The Argentine subsidiaries, Central Costanera
consolidated with CBA contributed Ch$ 180,670 million, reflecting a 4.4%
increase and El Chocon contributed Ch$ 43,033 million, reflecting a 16.6 %
decrease in the year 1998 compared to 1997. The peruvian company Edegel
contributed with Ch$ 61,983 million to the operating revenues in 1998.
o OPERATING EXPENSES increased 13.7 % to Ch$ 482,562 million in 1998,
compared to the year 1997. This increase is due to the incorporation of
Betania and Emgesa in Colombia that contributed Ch$ 125,668 million
compared to Ch$ 110,626 in 1997, and Cachoeira Dourada in Brazil, which
contributed Ch$ 22,173 million in 1998, compared to Ch$ 14,890 in 1997. In
Argentina, Costanera contributed Ch$ 121,889 million compared to Ch$
117,716 million in 1997 and El Chocon contributed Ch$ 29,157 million
compared to Ch$ 38,009 million in 1997. In Peru the recent consolidation of
Edegel contributed Ch$ 25,265 million in 1998. Operating expenses in Chile
increased by 10.7 % to Ch$ 158,410 million in 1998 mainly due to higher
energy purchases in the second half of 1998 compared to 1997.
o ADMINISTRATIVE AND SELLING EXPENSES increased 37.7 % to Ch$ 37,892 million
in 1998, compared to 1997. This is primarily due to the consolidation of
Page 21 of 26
<PAGE>
Emgesa in Colombia, Cachoeira Dourada in Brazil and the recent
consolidation of Edegel in Peru. Nevertheless, administrative and selling
expenses in Chile have decreased in 2.6% during the period.
o NON-OPERATING RESULTS for the period declined to a loss of Ch$ 172,551
million, compared to a loss of Ch$ 69,960 million in 1997. This loss is
primarily explained by a monetary correction loss of Ch$ 23,612 in 1998
compared to a gain of Ch$ 27,260 in 1997 and an increase in interest
expenses from Ch$ 116,487 million in 1997 compared to Ch$ 163,288 in 1998,
primarily derived from the consolidation of Cachoeira Dourada in Brazil and
Emgesa in Colombia as well as an increase in the outstanding debt of Endesa
- Chile.
o It is important to mention that in Chile during 1998 occurred the most
serious drought of which the country has statistical records, even drier to
the drought of the year 1968/1969, the driest year known. The impact in the
electric sector has been significant and the company have extreme their
measures to avoid a bigger deterioration in the electricity supply during
the second half of 1998 and the first months of the year 1999.
o In order to palliate the effects of the drought Endesa put in advance the
start-up of the 370 MW combined cycle thermoelectric power plant San Isidro
since August 1998 and the installation of 4 gas turbines in San Isidro,
with a total installed capacity of 155 MW, being expected to enter in
operations in staggered form since January 1999.
Page 22 of 26
<PAGE>
o Additionally, the company is transferring a gas turbine of 73,8 MW from
Mejillones in the SING to Itahue in the SIC and installing gas-fired
turbines in Charrua with a total capacity of 310 MW. It is also studying an
additional installation of 50 MW in the south of Chile. All the
above-mentioned represents an increment of 588 MW in the installed capacity
of ENDESA, what together with the transmission line Polpaico-San Isidro
constitutes investments of approximately US-$ 200 millions, that assure the
electric supply in the SIC in the short and medium term.
o ENDESA-Chile continues with its investment plan in the domestic energy
sector, which calls for the simultaneous investment in generation projects
in different regions in the country. In the international sector
ENDESA-Chile will continue its expansion studying its participation in bids
of generating companies, particularly in Brazil, Mexico and other Latin
American countries. Ultimately, The Company's objective is to be an
important and efficient company in the electric generation sector in Latin
America, looking to maximize and increase its economic value and return on
its investments in a highly competitive market.
Page 23 of 26
<PAGE>
ENERGY SALES INFORMATION
1997 / 1998
(FIGURES IN GWH)
---------------------------------------
1998 1997
---------------------------------------
- ----------------------------------------------------------------------------
Endesa -Chile 14,161 15,419
Chocon - Argentina 3,226 3,995
Costanera - Argentina 8,528 8,811
CBA - Argentina 2,330 2,056
Edegel - Peru 3,279 3,255
Betania - Colombia 2,617 3,101
Emgesa - Colombia 12,256 (1) 1,938
Cachoeira - Brazil 3,894 (2) 1,160
- ----------------------------------------------------------------------------
Since October, 1997. (2) Since September, 1997
REMINDER: ENDESA-Chile will be conducting a conference call to review its
results for the year 1998 on Wednesday March 3, 1999, at 10:00 a.m. New York
time, (12:00 noon Chilean Time). If you would like to participate, the dial in
number is (719) 457- 2625. If you have any questions please contact Robin
Weinberg or Victoria Parra of Dewe Rogerson at (212) 419-8309.
ENDESA-Chile (NYSE : EOC), which listed its American Depositary Shares on the
New York Stock Exchange in July 1994, is Chile's largest electricity generation
and transmission company. The Company and its subsidiaries own and operate 21
generation facilities in Chile, accounting for approximately 45.0 % of Chile's
total installed capacity. As of December 1998, approximately 76% of the
Company's installed capacity are hydroelectric, with the remainder being
thermoelectric. ENDESA also participates in the Argentine electricity sector
through the thermoelectric company Central Costanera S.A. and CBA, and the
Page 24 of 26
<PAGE>
hydroelectric company Hidroelectrica El Chocon S.A., accounting for
approximately 19.0 % of Argentina's total installed capacity. Additionally,
ENDESA participates in the Peruvian electricity sector through the company
Edegel, accounting for approximately 20.0 % of Peru's total installed capacity.
ENDESA also participates in Colombia through the hydroelectric company Central
Hidroelectrica de Betania and Emgesa, accounting for approximately 26.0 % of the
Colombian total installed capacity. Since September 1997, the Company
participated in the Brazilian electricity sector through the hydroelectric
company Cachoeira Dourada, accounting for approximately 1.1 % of the Brazilian
installed capacity.
-Table follows-
Page 25 of 26
<PAGE>
- --------------------------------------------------------------------------------
1998 RESULTS
ENDESA-Chile
( million of Chilean pesos as of december 31, 1998 ) (1US$=Ch$472.41)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ACCUMULATED
1998 1997 1998/1997
- --------------------------------------------------------------------------------------- -------------- -------------------
Consolidated Income Statement (%)
- ------------------------------------------------------------------------
-----------------------------------------------------
<S> <C> <C> <C>
Operating revenues 811,612 668,803 21.4%
Operating expenses (482,562) (424,361) 13.7%
Operating margin 329,050 244,442 34.6%
Administrative and selling expenses (37,892) (27,520) 37.7%
- -------------------------------------------------------------------------------------------------------
OPERATING INCOME 291,157 216,922 34.2%
- -----------------------------------------------------------------------------------------------------------------------------
Interest income 26,515 17,625 50.4%
Income of non-consolidated affiliates 300 13,896 -97.8%
Other non-operating income 13,088 13,314 -1.7%
Interest expense (163,288) (116,487) 40.2%
Other non-operating expenses (25,554) (25,567) -0.1%
Price-level restatement (23,612) 27,260 -186.6%
-------------------------------
NON-OPERATING RESULTS (172,551) (69,960) 146.6%
- -----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------
INCOME BEFORE INCOME TAXES AND MINORITY INTEREST 118,606 146,962 -19.3%
Income taxes (26,200) (24,172) 8.4%
Minority interest (75,437) (21,761) 246.7%
Goodwill amortization 28,207 21,417 31.7%
- -------------------------------------------------------------------------------------------------------
NET INCOME 45,177 122,446 -63.1%
- -----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
-----------------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET 1998 1997
----------------------------------------------------------
-----------------------------------------------------------------------------------------
<S> <C> <C>
Current assets 405,996 291,348
Property, plant and equipment 4,451,854 3,762,584
Other assets 392,007 421,072
--------------- --------------
TOTAL ASSETS 5,249,856 4,475,004
-----------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------
Current liabilities 381,381 197,475
Long-term liabilities 2,334,004 2,015,785
Minority interest 1,241,123 976,201
Shareholders' Equity 1,293,348 1,285,542
--------------- --------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 5,249,856 4,475,004
-----------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------
FINANCIAL INFORMATION
----------------------------------------------------------
EBITDA 481,194 366,266
Depreciation 155,774 115,922
Amortization 7,748 7,454
Consolidated Financial Debt
Short Term 251,751 94,909
Long Term 2,247,343 1,988,794
-----------------------------------------------------------------------------------------
</TABLE>
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