PRESENTACIÓN JGA IBERDROLA 2011. INGLÉS

Ignacio S. GalánReport by

Chairman & CEO

A key year for the optimisation of the Iberdrola Group

Highest Net Profit in history: Eur 2,871 M

Milestones in 2010

Record output

Increase in efficiency

Adequate regulatory management

Increase in financial strength

Optimisation of business portfolio

Elektro acquisition (Brazil)

2

Success of the Scrip Dividend programme(“Flexible Dividend”)

68% of shareholders opted for collection in shares

Milestones in 2010

Return1

+5%Cash collection

New shares +8%2

31 Data as of May 24th 2011.2 Includes tax saving and rise in price of new shares

4

Annual dividend growth1

(Eur M)

Total shareholder return since 20003

1 Dividend paid corresponding to the referred year. Includes attendance bonus.2 Pending approval at the GSM.3 Source: Bloomberg as of 12-31-2010

Milestones in 2010

Over Eur 10,000 M in dividends paid

along the last 10 years

2000 2010

485

1,8302

3.8x143%

52%

IBERDROLA

EuroStoxxUtilities

-18%EuroStoxx 50

51%IBEX 35

Iberdrola Tower, the Company's head office (Bilbao)5

Economic and regulatory environment 2010

5

Electricity demand recovering...

Economic and regulatory environment 2010

Brazil Spain Mexico UK

USA

+8.1%

+3.3% +3%

+0.1%

-1.9%

Electricity demand in 2010

6

... in a context of uneven economic recuperation

Regulatory milestones in Spain:

Economic and regulatory environment 2010

New remuneration framework for Distribution Networks

Royal Decree-Law 14/2010 - Solution to the tariff deficit

Deficit Securitisation Fund Issues

Report by the Congress Sub-Committee: Spanish Energy

Strategy for the next 25 years

Sustainable Economy Act

7

Regulatory milestones in the United Kingdom:

Economic and regulatory environment 2010

New remuneration framework for Distribution Networks

8

Provides stability until March 2015

Links remuneration to investments and quality of service

Regulatory milestones in the United States:

Economic and regulatory environment 2010

New electricity and gas rates in New York

Approval of a transmission line linking the US and Canada

Extension of the begin construction date

for new wind farms

9

Dillon wind farm in California (USA)

2010 Results

10

Record output of 154,000 GWh...

... thanks to emission-free energies

FY 2010

2009

143,000

2010

154,000+8%

Output (GWh)

11

Installed capacity of 45,000 MW...

… 57% of which is emission-free

FY 2010

Hydroelectric 22%

Wind28 %

Nuclear7%

Gas32%

Coal10%

Fuel-oil1%

Capacity breakdown by technology

12

Energy distributed increased by 2.4%...

FY 2010

2009

198,000

2010

203,000+2.4%

Energy Distributed (GWh)

13

...improving quality of servicein all our markets

Highest Net Sales ever recorded,exceeding Eur 30,000 M

2009

25.891

2010

30.431+17.5%

Net Sales (Eur M)

14

FY 2010

Enhanced operating efficiency (+11%)...

... driven by cost savings at Iberdrola USAand the optimisation of corporate structure

2009

3,590

2010

3,456-3.7%

Net Operating Expenses (Eur M)

15

FY 2010

Gross Operating Profit rose by 10.5% to Eur 7,528 M

Only 38% of EBITDA is generated bythe Traditional Business in Spain

Energy Spain99%

Latam1%

USA10%

UK18%

Energy Spain(ex-Renewables)

38%

Latam 12%

Renewable energy19%

Other3%

16

FY 2010

EBITDA 2000 EBITDA 2010

3.8x

Recurring Net Profit rose by 5.6% to Eur 2,582 M...

…and Net Profit amounted to Eur 2,871 M17

Net Profit (Eur M)

2,824 2,871

2009 2010

Recurring2,4462,582+5.6%

289Non-recurring

378

FY 2010

Strict control of financial resources

After investing Eur 5,674 M in the core business:

18

11.3% increase in operating cash flow to Eur 5,468 M

Reduction in debtof Eur 700 M

Increase in Equityto Eur 31,600 M

Leverage of 43.3%,the lowest rate in the last

10 years

FY 2010

Total Remuneration proposal...

* Purchase price of rights corresponding to December Flexible Dividend programme** Pending approval at the GSM

€0.146/share

€0.03/share (cash)

€0.326/share

Interim dividend*:

Final dividend**:

Total remuneration

19

... reaches Eur 0.331 including attendance bonus

€0.15/share (flexible dividend)

FY 2010

Over 1 M hours of training

FY 2010

Participation of 95% of employees20

Investing almost Eur 130 M in innovation

Tidal energy project in Scotland and Northern Ireland

Smart meters in Maine

Electric vehicle

21

FY 2010

Iberdrola, committed to society and people

FY 2010

Creation of a Corporate Social Responsibility Committee within

the Board of Directors

Iberdrola Foundation:

Scholarship programme in Spain and the U.K.

22

Year 2010

23

A great team of over 33,000 people

Combined cycle plant in Mesaieed (Qatar)

Agreements

24

Merger with Iberdrola Renovables

Agreements

Maintains Iberdrola Group's commitment toglobal leadership in clean energy

Unlocks the value of this company's assets

Facilitates access to capital markets

Provides organisational synergies

25

Amendments to the By-Laws and the Regulations for the General Shareholders' Meeting and the Board of Directors

Agreements

Continuous improvement of the Corporate

Governance System

Compliance with, and implementation of,

international recommendations and best practices

Protection of the corporate interest

Encouragement of shareholder participation at the

Shareholders' Meetings and a responsible exercise of

their rights

26

Aldeadávila hydroelectric plant (Salamanca)

Conclusions

27

Commitment to sustainable growth, benefiting:

Conclusions

Shareholders

Suppliers

Society

Customers

Employees

28