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Enel ChileElectricity Generation & Distribution
As of August, 2017
1
Enel Chile
Chilean Energy Sector Overview
Looking Forward
Enel ChileAgenda
Enel Chile – Chilean energy sector overview
Total Installed Capacity : 6.3 GW
Market Share 20161 : 35%
Generation 2016 : 17.6 TWh
Energy sales 2016 : 23.6 TWh
D. Almagro–Taltal
Bocamina LajaMaule
Bio Bío
Tarapaca
Huasco
San Isidro
Los Molles
CachapoalSantiago
56% of installed
capacity
corresponds to
renewable resources
Largest distribution
company in the main
electricity system
Clients : 1.8 million
Concession period : Indefinite
Energy 2016 : 15.9 TWh
Energy losses 2016 : 5.3%
2
Most relevant player in both generation and distribution businesses in Chile
Enel Distribución Chile
Empresa Eléctrica Colina
Luz Andes
1. In terms of energy sales.
Generation business1 Distribution business2
3
1. Consider only the Chilean capacity as of December 31, 2016.
2. Figures as of December 31, 2016.
Main player in terms of installed capacity in Chile
with a market share of over 30%
Main distributor in terms of energy sales in Chile
with a market share of over 40%
Sector overview – Leading position
Enel Chile – Chilean energy sector overview
15,893
13,538
2,537 2,417
Enel Chile CGE Chilquinta Saesa
Physical sales (GWh)
6,351
4,132
3,282
1,971
Enel Chile AES Gener Colbún Engie
Installed Capacity (MW)
4
Enel Chile
Chilean Energy Sector Overview
Looking Forward
Enel ChileAgenda
Enel Dx Chile
Organization
Enel Chile Shareholders1
5
CHILE
99%60%
61%
ITALY
CHILE
1. Figures as of June 30, 2017
Enel Generación Chile Shareholders1
Enel Chile
Enel Gx Chile CHILE
Enel ChileOrganization Structure – Stable shareholders base
60.6%7.3%
11.0%
20.6%0.5%
Enel SpA
ADRs (Citibank N.A.)
Chilean pension funds
Institutional Investors
Retail
60.0%
3.2%
16.1%
18.1%2.7%
Enel Chile
ADRs (Citibank N.A.)
Chilean pension funds
Institutional Investors
Retail
17.6 15.9
4.33.3
0.3 0.05.0
0.8
3.1
1.5
9.2
15.9
2016 2019
6
Installed capacity: 6.4 GW Net production: 17.6 TWh
+0.0% +3.0%
Coal CCGT Oil & Gas
Energy Sales1: 21.9 TWh
+0.5%
17.6 21.9 22.06.46.4
Leveraging on thermal capacity to offset lower water availability
1. Figures does not consider sales in the spot market.
Generation Business - Main industrial KPIs
Enel Chile
18.1
0.6 0.6
1.5 1.5
0.6 0.6
3.5 3.5
2016 2019
Renewable Free clients Regulated
17.6 15.9
4.33.3
2.8
2016 2019
Energy sales to
be contracted
1.82.0
2016 2019
7
Number of customers: 1.8 mnElectricity Distributed: 15.9 TWh
Distribution business - Operating highlights
+7.5% +9.9% (24.4%)
SAIDI1: 170 minutes
Growth of residential clients compensated by a decrease in commercial customers
1. SAIDI: System Average Interruption Duration Index.
2016 2019
15.917.1
Enel Chile
225
170
2016 2019
64%68% 67%
74%76%
76%36%32% 33%
26%24%
24%
2012 2013 2014 2015 2016 Target 2019
Gx Dx
8
Improved performance driven by generation business
1. Referential average exchange rate was 676.67 Ch$/US$ as of December 31, 2016.
680796 815
9981,133
+ 114%
EBITDA breakdown by business (US$ mn)1
Enel Chile
1,456
172273
403284
686
8772
70122
675
2013 2014 2015 2016 Target 2017 - 2019
Gx Dx
9
259345
Los Cóndores will add 150 MW of installed capacity to the SIC.
473 406
+ 56%
Capital expenditures1 driven by generation business (US$ mn)
Enel Chile
1,361
1, All the figures were translated to US Dollars using the average exchange rate of each period.
889
472
Growth Maintenance
5 8
124 102
52 73
2016 2019
Industrial growth 2017-2019
Focus on developing efficient and profitable network projects
10
Growth Capex by business (US$ mn)Total Capex 2017-2019 (US$ mn) Maintenance Capex by business (US$ mn)
152
68
149
2016
17
167
219
-24%
2019
+0.5%
182181
Generation
Other
Distribution
1,361
Enel Chile
92%
8%
1H17
56%
42%
2%
1H17906 1,075
367 194
2016 1H17
Net Debt Cash
Gross and Net Debt
11
Gross Debt1 by type
International
Bonds
Local
Bonds
Others UF + CLP
Dollars
Gross Debt by currency2
1H17 liquidity breakdown;• Cash: US$ 194 MM
• Committed Credit Lines: US$ 314 MM
• Average life of debt: 10 years
Enel ChileGross2 and Net Debt2 (US$ MM)
(0.2%)
1,2691,273
1. Financial debt includes financial expenses, derivatives and other consolidation adjustments.
2. Debt in UF and Ch$ its converted to US Dollars using the 1H17 closing exchange rate 664.29 Ch$/US$.
372
584486
2015 2016 March - December2016
1 1
12
Attributable Net Income (US$ mn)
+57.0%
1. Proforma Financial Statement as historically reported prepared for a better understanding and only for information purpose.
2. On 2015, Enel Chile only paid a final dividend. Enel Chile's interim dividend of Ch$ 0.47 was paid by Enel Américas before the Spin-off.
3. Interim dividend paid by Enel Chile on January 27, 2017.
4. Final dividend paid on May 26, 2017.
Dividend to be paid (Ch$ per share)
Payout will increase from current 50% by 5% every year until 2020 to 70%
0.83
2.54
2015 2016
Interim Final
2.12
3.2
Enel ChileSolid results lead sound dividends
Enel ChileDividend payout ratio will increase to 70% in 2020
13
Total Group: 573 MUSD
Total out of Group: 246 MUSD
50%55%
60%65%
70%
2016 2017 2018 2019 2020
1. Enel Chile was created on March 1, 2016, when the Enersis Américas Spin-Off became effective.
Enel Gx
Chile
Enel
Chile
Out of
Group
146
95
149
215
Out of
Group
Enel Dx
Chile
212
Out of
Group
2
Dividends paid in 1H17
• Enel Chile will pay US$ 1.3 bn in dividends within the period 2017 – 2019.
• Enel Chile paid its first definitive dividend of Ch$ 2.09 per share1 on May 24th, 2016 .
• 2016 Enel Chile dividend was Ch$ 3.2 per share.
14
2017-19 Cash flow generation (US$ bn)
Strong cash flow generation with a growing dividend payout ratio
1. Funds from operations after taxes.
2. Free cash flow.
3. Before extraordinary operations.
3.2
2.7
1.8
0.5
0.5
0.9
1.3
FFO (1) MaintenanceCAPEX
FFO after Maint. CAPEX
Net growth
CAPEXFCF beforeDividends (2)
Dividends paid FCF (3)
Enel Chile
15
Enel Chile
Chilean Energy Sector Overview
Looking Forward
Enel ChileAgenda
Regulatory framework: Supply market liberalization
34 34
Regulated market Free market
2016 Total Chilean Free market sales (TWh)
(% of Total)
50%
Enel Chile Free market sales evolution (TWh)
68 TWh
Market share is expected to increase significantly
Growth driven by an aggressive commercial strategy on the free market
High potential from further market liberalization
Free sales Dx
Free sales Gx
1.93.9
4.3
3.3
16%
2019
7.2
2016
6.2
16
Enel Chile – Looking forward
North Zone▪ 90 customers
(27 Gx, 63 Dx)
▪ 69 customers
(22 Gx, 47 Dx)South zone
Business Opportunity
Free Market Potentially Free Market
▪ 406 customers
▪ 516 customers
Opportunity in free and potentially free market
Metropolitan
region
▪ 156 customers
(16 Gx, 140 Dx) ▪ 1.380 customers
Strengths:
• Customized commercial structure
not offered by competitors.
• Bundling with energy efficiency
projects.
Insights:
• Free Market: Higher price
competition than in Gx.
• Potential free market: Larger
opportunity and lower
competition
• Consultancy companies are
advising customers to become
free clients (despite regulatory
constrains).
17
17
Capacidad Innovadora – Portafolio Comercial++++++++++++++++++++++++++++++++
Negocio de Generación
Posición activa en clientes libres nos permite capturar todas las
oportunidades de mercado dada la flexibilidad del portafolio
Commercial LeadershipStrong portfolio of contracts favors margin stability
TW
h
18
Enel Generación Chile was awarded 50% approximately of the energy tendered by the Authority in 2016.
The amount awarded was 5.9 TWh/year starting in 2022.
Enel Generación Chile made a competitive offer based on its own generation mix with its existing plants and the contribution of
non-conventional renewable energy from EGP.
Our strategic vision enables us to remain leaders in the energy commercialization in Chile, anticipating changes and new
market conditions.
17.6 18.5 17.9 17.515.9 14.6 13.1
10.8 10.2 10.0
4.1
5.3 5.8 5.8
5.8
4.34.3 4.2
3.43.0
2.01.6
1.6 0.5 0.4
0.2
2.0
2.02.0 2.0
2.0
0
2
4
6
8
10
12
14
16
18
20
22
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Regulated Customers August 2016 Auction Free Customers 2016 New Free Customers
19* c/r precio licitación regulada
Enel Generación Chile has a competitive position and it will have the highest
amount of contracts with regulated clients in 2025
compared to other important players in the Chilean market.
0
2
4
6
8
10
12
14
16
18
20
2017 2018 2019 2020 2021 2022 2023 2024 2025
TW
h
Endesa Colbún AES
Sales to regulated costumers
Enel Chile – Looking forward
Enel Gx Chile AES Gener
20
Hydrology
Normalization of hydrology since
2018, favors an increase in hydro
generation, improving margin
Sale priceContractual position allows to defend
margins when spot prices fall down
Assets
Mix Diversified generation mix mitigates
hydrology risk
Drivers
Additional
capacity
Commercial operations of
Los Cóndores, will increase our
production in 600 GWh/year
approx.
Accumulated EBITDA 2017 - 2019: MM US$ 3,095
Increasing EBITDA due to commercial portfolio and efficient generation assets
8791,108
2016 2019
+26%
Margin improvement: Generation
Enel Chile – Looking forward
56%23%
7%
5%7%
Margin breakdown by business Distribution + Retail
Important growth in all segments related to the energy distribution
2016: US$ 407 mn 2019: US$ 509 mn
21
57%
22%
9%
8%
4%
407 509
57%25%
6%
6%
6%
Dx regulated
Subtransmission
Free Market Dx
VAS without electric grids relocation
Electric grids relocation
Enel Chile – Looking forward
22
Value Added Services
• October 2017: lease of
2 electric buses to a
public transport
operator to operate in
an official route for 10
years.
• 2018 tender by the
Ministry of Transport:
incorporation of at
least 90 electric buses
to public transport
system of Santiago.
ElectricalBuses
Enel Distribution is the main Utility in the sale of VAS,
with an estimated Gross Margin for 2017 of 31 MUSD from the entire portfolio of offers
• Integral service of
efficient public lighting
• Light points installed:
− municipalities inside
concession area: >
400,000
− outside concession
area: > 27,000
Publiclighting
• Infrastructure projects
mainly associated with
real estate
development:
− Electrical Projects
− Higher Standard
Projects
− Full Electric
− Others.
Infrastructure Projects
• Public security service
with systems of tele-
surveillance cameras
• Leaders in the market.
− > 1,000 installed
cameras
− > 30 municipalities
inside and outside
concession area
UrbanDevelopmen
• Service of energy
efficiency solutions for
the industrial,
commercial and
residential segment:
− Interior lighting with
LED
− ACS thermal power
plants with PV backup
− Residential PV system
− Efficient air
conditioning
equipment
EnergyEfficiency
Most valuable current and future activities out of the whole portfolio
Enel Chile – Looking forward
23
Restructuring Process
Enel ChileAgenda
Restructuring process
24
Current structure in Chile and recent events
60.6%
99.1%60.0%100%
100%
Chile
Generación
Chile
Distribución
Chile
Transaction announcement
3rd July
2017
25th
August
2017
– Enel Chile’s (EC) BoD sends to Enel SpA the
proposal of a corporate reorganization
– Enel SpA gives favourable opinion on the
Transaction and sets acceptance conditions
for the proposal
25th
August
2017
– EC BoD’s approves analysis and
implementation of Elqui process under OPR
scheme
Latin America
Chile28th
August
2017– EGC takes note of EC proposal
Restructuring process
25
Proposed Transaction Key Steps
Cash and stock PTO
Cash &
stock
PTO
60.6%
60-100.0%
99.1%100.0%
Chile
Generación
Chile
Distribución
Chile
75.0- c.100%
Merger of EGP Latin America into EC
60.6%
75.0-c.100% 99.1%
Chile
Generación
Chile
Distribución
Chile
100.0%
1 2
100.0%
Latin América
Chile Chile
Enel SpA minimum
conditions
1. The transaction must be
executed at market terms
2. The transaction must be
EPS accretive for Enel
Chile
3. Enel should retain a
similar stake in the
resulting EC
4. Statutory concentration
limit in EGC (65%)
should be removed
Restructuring process
26
Independent advisor, Financial appraisers and legal advisors
Chile
BoD
Independent advisor
Committee
Independent advisorFinancial appraisers Legal Advisors
Oscar Molina
Luis Felipe Schmidt
Gx Chile
Closing remarks
27
Develop a strategy of “sustainable” growth in line with the communities needs focusing on small-middle sized projects
Robust long term contract portfolio perfectly hedges generation capacity
Aggressive commercial strategy boosting the business beyond regulated market
Diversifying its EBITDA breakdown with an emphasis on new services, exploiting an ample customer base.
Positioning as the most innovative company in the Region, contributing to implement the concept of “smart cities”.
Enel Chile
Gx
Dx
Closing remarks
28
Strong presence in all market segments
Stable growth in all businesses
Further progress expected in structure simplification
Cost efficiency ahead of plan
Confirmed dividend policy, increasing by 5% every year reaching 70% in 2020
Enel Chile
29
Susana Rey
Head of IR Enel Chile
+56 2 2630 9606
[email protected] further information, visit our IR site at:
www.enelchile.cl
Catalina González
Head of IR Enel Generación Chile
+56 2 2630 9603
Guillermo Berguecio
Investor Relations Associate
+56 2 2630 9506
Francisco Basauri
Investor Relations Associate
+56 2 2630 9585
Gonzalo Juarez
IR New York Office
+1 (212) 520 1025
Contact us
Enel Chile
30
Exhibits
31
1H171H16 Var.
(5.6%)
(15.4%)
(19.1%)
(23.1%)
n.a.
(4.9%)
89.9%
n.a.
1. Comparisons between periods (1H16 and 1H17) are made using the average exchange rate for the period 659.98 CLP/USD and for the Balance Sheet using the closing exchange rate 664.29 CLP/USD.
2. Comparisons between periods (2016 and 2015) are made using the average exchange rate for the period 676,67.98 CLP/USD and for the Balance Sheet using the closing exchange rate 669.47 CLP/USD.
(20.4%)
18.7%
(3.6%)
1H
16
Fin
an
cia
l S
tate
me
nts
Pro
form
a
Revenues
Operating Margin
EBITDA
Related Company Results
Net Financial Result
EBIT
Taxes
Consolidated Net Income
Gross Capex
Net Debt
Net income attributable to shareholders
1,834
632
464
344
(15)
165
374
(120)
129
1,075
257
1,943
747
574
448
1
8
393
(63)
162
906
267
Financial results in constant US$ mn1
Enel Chile
20162015 Δ YoY
5.9%
13.9%
13.5%
13.3%
(75.9%)
68.0%
8.1%
346.7%
(2.6%)
(3.5%)
57.0%
Fin
an
cia
l S
tate
me
nts
Pro
form
a
Revenues
Contribution Margin
EBITDA
Related Company Results
Net Financial Income
EBIT
Taxes
Group Net Income
Gross Capex
Net Debt2
Attributable net income
3,756
1,544
1,133
880
(35)
191
861
(175)
405
906
584
3,545
1,355
998
777
(145)
43
513
(162)
416
1,071
372
Debt / Maturity Ccy RateOutstand.
Amount
Bonds
UF M / 2029 UF 4.75 0.4
UF H / 2028 UF 6.2 0.1
YB / 2027 USD 7.88 0.2
YB / 2037 USD 7.33 0.07
YB / 2024 USD 4.25 0.4
YB / 2097 USD 8.13 0.04
Leasing 2023 USD 6.3 0.03
IC - CLP TIP 0.01
TOTAL 1,3
Enel Generación Chile Enel Distribución Chile Enel Chile Consolidated
1.Includes principal outstanding on debt. Does not include accrued interest.
2.Includes US$ 28 million of MtM of ccy swaps associated to UF bond Series M.
Gross Financial
Debt(1)
Debt Ccy RateOutstand.
Amount
Inter
Com
pany
Enel Chile CLP TIP 0.04
Enel Chile CLP 4.47 0.07
Enel Chile CLP 3.73 0.13
TOTAL 0.2
1,3
Enel Chile
stand alone
-
Enel Chile Debt Structure as of June 30, 2017 (Figures in US$ billion)
Net Debt(US$ billion)
1.26 0.2 1.1(0.17)
EBITDA 12M(US$ billion)
0.77 0.3 1.0(0)
Net Debt / EBITDA
1.6x 0.8x 1.0x-
(2)
(3)
(3)
(4)
(4)
3. IC: Intercompany short term debt under revolving credit agreement “cuenta corriente mercantil”
4. Structured loans granted by Enel Chile.
100% of Enel Chile debt comes from Enel Generación Chile
32
Financial Highlights
33
Enel Generación Chile
1 Under IFRS, Enel Generación Chile adopted the Chilean Peso as functional currency therefore, comparisons among periods are shown in Ch$.
2 Referential average exchange rate was 676,67 Ch$/US$ as of December 31, 2016.
Consolidated Income Statement1
US$ Million3 2012 2013 2014 2015 2016Change
2016/2015
Revenues 1,647 1,438 1,827 2,281 2,453 8%
Costs (1,114) (731) (1,109) (1,302) (1,323) 2%
Contribution Margin 533 707 718 980 1,130 15%
EBITDA 395 538 547 764 879 15%
EBIT 253 402 379 594 638 7%
Net Financial Expenses (94) (93) (121) (169) (53) -69%
Related Company Results 183 165 64 13 191 1353%
Taxes (69) (87) (91) (113) (123) 9%
Net Income 274 387 232 938 771 (18%)
Attributable to shareholders of Enel Gx 581 698 20%
Operational Efficiency
34
Availability of our power plants
89.2% 89.4% 92.3% 91.6% 94.8% 94.3%
2014 2015 2016 2017 2018 2019
Total Generation Fleet96.9% 96.2% 95.9% 93.5% 95.5% 95.7%
2014 2015 2016 2017 2018 2019
Hydro
28.7%53.5%
65.0%79.6% 90.1% 86.1%
2014 2015 2016 2017 2018 2019
Coal
92.1%84.7%
92.3% 91.9% 94.2% 94.4%
2014 2015 2016 2017 2018 2019
CCGT
95.8% 95.9% 96.8%90.9%
96.6% 92.7%
2014 2015 2016 2017 2018 2019
Oil & Gas
High efficiency standard in our generation assets
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
GW
h
35
Driest years in
history
Since 2010, each year has
been among the driest in
hydrological history
• In Chile, the difference between the driest and the wettest year is 30.5 TWh approx. This represents 57% approx. of the
SIC's electricity generation in 2016.
• A dry year increases the exposure to: (i) lack of generation; (ii) fuel prices volatility; and (iii) spot market.
• This exposure implies risks that can be managed to create opportunities.
Hydrological years from 1960 to 2016
Hydrological ContextImpact of hydrological conditions in the country
SIC - Affluent energy
Driest years in
history
Installed capacity and energy generation
36
1. Based on total installed capacity of the country.
2. Compared with 1H16
3. Non Conventional Renewable Energy
Installed Capacity: 6,351 MW
Market Share1: 28%
Total Generation 1H17: 8,340 GWh
Net Generation 1H17 GWh Change2
HYDRO 3,593 (21%)
COAL 1,744 24%
OIL-GAS 2,945 1%
NCRE3 58 34%
Total 8,340 (6%)
Historical energy generation by type of technology
0
2,000
4,000
6,000
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q
2012 2013 2014 2015 2016 2017
Hydro Coal Oil-Gas Wind
Engaging the local communities
Contribution of Enel Chile to Enel target on SDGs
(*)Beneficiaries, YTD 2016
Chile 160.000(*) 417.400 17.900
Chile target 2020 +70.000 +150.000 +32.100
Enel commitments to the global SDGs1
37
1. SDG: Sustainable Development Goals
38
Decarbonizing the energy mix and Environmental Sustainability
SDGs Main Actions Targets
Sustainable cities and communities
Reduction of contamination
Installation of a desulphurization
plant in Tarapacá in 2016
Two operational dome in Bocamina
power plant in 2018
Development of renewable capacity
Investment in environmental
improvements in existing plant
+150 MW
117 MM€
Action for climate change
Environmental Sustainability
Financial Highlights
39
Enel Distribución Chile
1 Under IFRS, Enel Distribución Chile adopted the Chilean Peso as functional currency therefore, comparisons among periods are shown in Ch$.
2 Referential average exchange rate was 676,67 Ch$/US$ as of December 31, 2016.
Consolidated Income Statement1
US$ Million2 2012 2013 2014 2015 2016 Change2016/2015
Revenues 1,455 1,441 1,667 1,859 1,944 5%
Costs (1,076) (1,053) (1,265) (1,454) (1,540) 6%
Contribution Margin 379 388 402 405 404 0%
EBITDA 247 257 268 274 284 4%
EBIT 197 205 226 221 231 5%
Net Financial Expenses 14 1 8 19 13 -32%
Related Company Results (0) (0) (1) 0 0 -65%
Taxes (37) (46) (54) (55) (48) -12%
Net Income 174 159 180 279 209 -25%
Attributable to shareholders of Enel Dx 279 209 -25%
Regulatory framework: Networks
Stable distribution regulatory framework in the next years
2016 WACC
real pre tax
Remuneration
scheme
Regulatory cycle
Next regulatory
cycle
10%
CAPEX/OPEX
Remuneration on
"efficient company ”
model
4 years
2017 - 2020
Chile
1
2
3
4
40
EBITDA (US$bn)
+37.3%
20192016
0.28
0.39
Infrastructure & Networks
Enel Chile – Looking forward
Electricity business
Distribution
(Natural Monopoly)
Transmission
(Natural Monopoly)
“Nacional”
(Transmission)
“Transmisión Zonal”
(Subtransmission)
ConsumersConsumers
VNR: USD 1,450 millions(VNR dic. 2014)
VI: USD 860 millions(VI dec. 2013)
VI: USD 8.5 millions(VI dec. 2013)
Related
services
Revenues:
USD 9 millions
Light meter rental
Pole rental
Disconnection and
Reconnection of services
41
Regulation – Market framework
Enel Distribución Chile
42
Regulation - Remuneration and Tariff processes
Tx• Remuneration regulated by Annualized Investment Value (investment, useful life, discount rate) + Efficient Operation and Maintenance Costs
• Price Cap Revenue Cap [2018 – 2019: transitional process] [2020 – 2024: new tariff process]
• Indefinite administrative concessions (DFL1 - 1982)
Dx
Concession
Tariff revision
• Tariff cycle: 4 years.
• Annualization of New Replacement Value (AVNR) (investment, useful life, discount rate) +
Operation & Maintenance (O&M) Costs + Pass Through Gx/Tx.
• Return on investment according to the value of assets:
• Recognition of asset value according to optimized network (New Replacement Value of
an optimized network).
• WACC: Set by law since 1982 (10% real before taxes).
• O&M Costs: Recognizing efficient costs.
• Average energy and power losses (efficient)
• In parallel, The Associated Services Study is carried out.
Arbitration • Experts board (Panel de Expertos) to resolve disputes between regulator and agents.
Final tariff = Gx + Tx (Nacional + Zonal) + VAD
Added Value of
Distribution
(VAD)
Enel Distribucion ChileRegulation – Market and future challenges
Distribution
• Regulated monopoly
• Price Cap –Yardstick Competition
• Standard company assets at market prices
• Discount rate before tax 10%
• Efficient O&M
Transmission
• Regulated monopoly
• Revenue Cap
• Existing real assets at market prices
• Variable discount rate (min 7% post tax)
• Efficient O&M
• Remunerated extension via tenders
Distribution Law
Participative process for the preparation of a bill with a new
distribution regulatory framework
• Quality of Supply
• Modernisation
• Innovation incentives
• Remuneration model
Commercialization
• Free competition
• Bilateral agreements with suppliers
and customers
Short Law
The Government announces the presentation of the short-
law of distribution as a consequence of supply outages
• Increase in fines and rewards
• Special treatment for electro-dependents
Submission has been repeatedly postponed
Future Challenges
Enel Distribucion Chile
44
Regulation – Distribution regulation changes under discussion
• New Regulatory
Framework for Distribution
announced by Government
• Enel Dx actively involved
Context Coming Milestones
• Government announced
“Short Law” due to power
outages caused by
snowfalls (Jul/17).
• Distribution Company role
• Tariff Process’ modernization
• New challenges of the operation
and Quality of Supply
• Commercialization and New
Agents
• Redesign of fines and
rewards
• Special conditions for
electricity-dependents.
Main Topics
New Regulatory Framework for
Distribution
“Long Law” • Outgoing Government
will submit a draft of “Dx
Law” to the new
authorities
• Submission has been
repeatedly postponed
Government
announces new
Distribution Law
(“Long Law”)
Jun/16
CNE meets with Enel
and GNF in Rome and
Madrid respectively.
Participative process
with Enel’s CEO
Jul -Oct/16
Public Debate
Organized by
Universidad
Católica and CNE
Nov/16 - Jan/17
CNE prepares
draft of
Distribution Law
Apr - Jul/17
Strong
snowfalls
“Short Law”
announceme
nt
Jul/17
“Short Law”
postponed
Sep/17
Draft of “Long
Law”
Jan/18
Fines and Rewards in
Distribution
“Short Law”
Enel Distribucion Chile
45
Regulation – Transmission
Existing Transmission RAB set every 4 years
TRAB= Annuity Investment + Administrative, Operating and Maintenance Costs
• Existing assets at market value. Variable discount rate (min. 7% post tax)
• Efficient Operating and Maintenance Costs
Transmission RABReal Assets
Investment Value=
Capital recovery factor(variable discount rate, useful life set on bases)
x +Operating and
Maintenance Costs (O&MC)
1
2
New Investments: Centralized planning + Tenders
CNE performs an annual
transmission planning,
which ends with the
Expansion con Obras
Nuevas y Obras de
Ampliacion decree
NEW WORKS:
• Open tender: Transmission companies bid
TRAB (annuity investment) for 20 years (5
tariff periods).
• From year 21 onwards are remunerated as
existing facilities.
EXTENSION WORKS:
• Operating transmission companies tender for
construction.
• Remunerated as existing facilities,
considering the result of the tender as
investment value component.
• From year 21 onwards are remunerated as
existing facilities.
Revenue C
ap s
tandard
46
This presentation does not constitute an offer to sell any securities and is not soliciting an offer to buy any securities in any jurisdiction.
This presentation contains certain “forward-looking statements” regarding anticipated financial and operating results and statistics and other future events relating to Enel Chile S.A. These
statements are not guarantees of future performance and are subject to material risks, uncertainties, changes and other factors which may be beyond Enel Chile control or may be difficult to
predict. These statements may constitute forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. The inclusion of these forward-
looking statements should not be regarded as an indication that Enel Chile or any other person considers such projections to be material or to be a reliable prediction of actual future results.
These forward-looking statements are subjective in many respects and there can be no assurance that they will be realized or that actual results will not be significantly higher or lower than
described. As a result, the inclusion of any forward-looking statements in this presentation should not be relied on as necessarily predictive of actual future events. The projections and other
forward-looking statements were based on numerous variables and assumptions that are inherently uncertain. Actual results may differ materially from those projected as a result of such risks
and uncertainties. In addition, the financial projections do not necessarily reflect revised prospects, changes in general business or economic conditions, or any other transaction or event that
has occurred or that may occur and that was not anticipated at the time the projections were prepared.
Forward looking statements include, but are not limited to, information regarding: Enel Chile‘s business plans, Enel Chile‘s cost reduction plans, trends affecting Enel Chile‘s financial condition
or results of operations including market trends in the electricity sector in Chile or elsewhere, supervision and regulation of the electricity sector in Chile or elsewhere, and the future effect of
any changes in the laws and regulations applicable to Enel Chile‘s or its affiliates. The principal assumptions underlying these forecasts and targets relate to: Economic and Industry
Conditions, Commercial Factors, Political/Governmental Factors, Operating Factors, and Competitive Factors.
The following important factors, in addition to those discussed elsewhere in this presentation, could cause actual financial and operating results and statistics to differ materially from those
expressed in our forward-looking statements, including but not limited to: changes or developments regarding the applicable regulations (which may affect the investment plan of Enel Chile
regarding the regulated activities), legal restrictions applicable to the implementation of the dividends policy, environmental regulations and other legal issues; price of electricity; price and
supply of raw materials; interest rates or exchange rates; availability of fuel; ability to maintain relationship with suppliers, customers and consumer and user protection groups; changes in
climate conditions; widespread adoption energy efficiency measures; inherent risks in the construction of new power generation and distribution facilities; changes in general economic, political,
administrative and business conditions; operating hazards and risks; tax risks; loss of senior management and key personnel; insufficiency of insurance coverage or increase of insurance
costs; failure of systems and information technology and processing; inability to access the capital markets to refinance its debt and finance its capital expenditures; and other factors that could
adversely affect the business and financial results of the Company.
No assurance can be given that the forward-looking statements in this document will be realized. Readers are cautioned not to place undue reliance on those forward-looking statements, which
speak only as of the date of this presentation. Our independent registered public accounting firm has not audited, examined or compiled the forward-looking statements and, accordingly, does
not provide any assurance with respect to such statements. Neither Enel Chile nor any of its affiliates intends, nor undertakes any obligation, to update or revise the forward-looking
statements, whether as a result of new information, future events or otherwise, except as required by law.
Enel ChileDisclaimer
