UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of November 2007
EMPRESA DISTRIBUIDORA Y COMERCIALIZADORA NORTE S.A. (EDENOR)
(DISTRIBUTION AND MARKETING COMPANY OF THE NORTH )
(Translation of Registrant’s Name Into English)
Argentina
(Jurisdiction of incorporation or organization)
Azopardo 1025
Buenos Aires C1107ADQ
Argentina
(Address of principal executive offices)
(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)
Form 20-F X Form 40-F
(Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)
Yes No X
(If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- .)
CHAIRMAN: | Alejandro Macfarlane | |
VICE CHAIRMAN: | Marcos Marcelo Mindlin | |
DIRECTORS: | Damián Miguel Mindlin | |
Gustavo Mariani | ||
Luis Pablo Rogelio Pagano | ||
Gustavo María Giugale (*) | ||
Alfredo Mac Laughlin | ||
Ricardo Torres | ||
Diego Martín Salaverri | ||
Edgardo Alberto Volosín | ||
Ignacio Raúl Chojo Ortiz | ||
Rafael Mancuso | ||
ALTERNATE DIRECTORS: | Jorge Grecco | |
Javier Douer | ||
Pablo Díaz | ||
Damián Burgio (*) | ||
Brian Henderson | ||
Martín Alejandro Mittelman (*) | ||
Maia Chmielewski | ||
Gabriel Cohen | ||
Eduardo Maggi | ||
Alejandro Mindlin | ||
Carlos Florencio Correa Urquiza |
MEMBERS: | Javier Errecondo | |
José Daniel Abelovich | ||
Marcelo Javier Ruiz | ||
ALTERNATE MEMBERS: | Santiago Dellatorre | |
Marcelo Héctor Fuxman | ||
Roberto Daniel Murmis |
Class of shares | Subscribed and paid-in | |||
Common, book-entry shares, face value 1 and 1 vote per share | ||||
Class A | 462,292,111 | |||
Class B | 442,210,385 | |||
Class C | 1,952,604 | |||
906,455,100 |
2007 | 2006 | ||||||
CURRENT ASSETS | |||||||
Cash and banks | 5,050 | 481 | |||||
Investments (Exhibit D) | 186,515 | 32,192 | |||||
Trade receivables (Note 4) | 319,295 | 270,938 | |||||
Other receivables (Note 5) | 18,873 | 30,221 | |||||
Supplies | 20,925 | 13,635 | |||||
Total Current Assets | 550,658 | 347,467 | |||||
NON-CURRENT ASSETS | |||||||
Trade receivables (Note 4) | 109,583 | 0 | |||||
Other receivables (Note 5) | 154,696 | 256,475 | |||||
Investments in other companies (Exhibit C) | 432 | 378 | |||||
Supplies | 6,853 | 4,921 | |||||
Property, plant and equipment (Exhibit A) | 2,992,251 | 2,925,422 | |||||
Total Non-Current Assets | 3,263,815 | 3,187,196 | |||||
Total Assets | 3,814,473 | 3,534,663 |
2007 | 2006 | ||||||
CURRENT LIABILITIES | |||||||
Trade accounts payable (Note 6) | 284,985 | 267,640 | |||||
Loans (Note 7) | 26,682 | 2,029 | |||||
Salaries and social security taxes (Note 8) | 53,962 | 51,446 | |||||
Taxes (Note 9) | 85,817 | 62,192 | |||||
Other liabilities (Note 10) | 30,390 | 26,380 | |||||
Accrued litigation (Exhibit E) | 36,615 | 25,914 | |||||
Total Current Liabilities | 518,451 | 435,601 | |||||
NON-CURRENT LIABILITIES | |||||||
Trade accounts payable (Note 6) | 34,343 | 31,250 | |||||
Loans (Note 7) | 1,013,071 | 1,095,490 | |||||
Salaries and social security taxes (Note 8) | 24,098 | 20,287 | |||||
Other liabilities (Note 10) | 260,180 | 241,079 | |||||
Accrued litigation (Exhibit E) | 42,284 | 40,606 | |||||
Total Non-Current Liabilities | 1,373,976 | 1,428,712 | |||||
Total Liabilities | 1,892,427 | 1,864,313 | |||||
SHAREHOLDERS' EQUITY (as per related statements) | 1,922,046 | 1,670,350 | |||||
Total Liabilities and Shareholders' Equity | 3,814,473 | 3,534,663 |
2007 | 2006 | ||||||
Net sales (Note 11) | 1,503,244 | 1,022,863 | |||||
Electric power purchases | (672,646 | ) | (589,408 | ) | |||
Gross margin | 830,598 | 433,455 | |||||
Transmission and distribution expenses (Exhibit H) | (314,407 | ) | (268,649 | ) | |||
Selling expenses (Exhibit H) | (83,532 | ) | (66,983 | ) | |||
Administrative expenses (Exhibit H) | (81,815 | ) | (67,417 | ) | |||
Net operating income | 350,844 | 30,406 | |||||
Financial income (expenses) and holding gains (losses) | |||||||
Generated by assets | |||||||
Exchange difference | 1,002 | 3,016 | |||||
Interest | 8,101 | 10,998 | |||||
Holding results | 28 | 231 | |||||
Generated by liabilities | |||||||
Financial expenses (*) | (13,130 | ) | (22,613 | ) | |||
Exchange difference | (32,147 | ) | (29,896 | ) | |||
Interest (**) | (38,028 | ) | (44,136 | ) | |||
Adjustment to present value of the retroactive tariff increase arising from the application of the new electricity rate schedule and of the Payment Plan Agreement with the Province of Bs.As. (Notes 13 and 17.b) | (32,404 | ) | 0 | ||||
Gain on extinguishment of former debt (Note 3.k) | 0 | 179,243 | |||||
Adjustment to present value of notes (Note 3.k) | (46,261 | ) | 75,495 | ||||
Loss from the repurchase of notes (Notes 3.k and 14) | (808 | ) | 0 | ||||
Adjustment to present value of repurchased notes | 877 | 0 | |||||
Other expense, net (Note 12) | (21,335 | ) | (15,031 | ) | |||
Income before taxes | 176,739 | 187,713 | |||||
Income tax (Note 3.n) | (106,816 | ) | 72,315 | ||||
Net income for the period | 69,923 | 260,028 | |||||
Earnings per common share | 0.077 | 0.313 |
Fees related to the Corporate Notes Issuance Program (Note 23) | (5,043 | ) | 0 | ||||
Fees related to the initial public offering of capital stock (Note 1) | 0 | (10,074 | ) | ||||
Financial assistance Electricidad Argentina S.A. (Note 15) | (4,648 | ) | (6,538 | ) | |||
Withholdings income tax and others financial expenses | (3,439 | ) | (6,001 | ) | |||
Total | (13,130 | ) | (22,613 | ) |
2007 | 2006 | ||||||||||||||||||||||||
Shareholders' contributions | Retained earnings | ||||||||||||||||||||||||
Nominal Value | Adjustment to | Additional Paid-in | Appropriated Retained Earnings Legal | Unappropriated Retained Earnings Accumulated | |||||||||||||||||||||
(Note 16.a) | Capital | Capital | Total | Reserve | Deficit | Total | Total | ||||||||||||||||||
Balance at beginning of year | 831,610 | 996,489 | - | 1,828,099 | 53,320 | (211,069 | ) | 1,670,350 | 1,377,284 | ||||||||||||||||
Capital increase resolved by the Board of Directors meeting held on June 14, 2007, as per the power granted by the Shareholders' Meeting held on June 7, 2006 (Note 16) | 74,845 | - | 106,928 | 181,773 | - | - | 181,773 | - | |||||||||||||||||
Net income for the period | - | - | - | - | - | 69,923 | 69,923 | 260,028 | |||||||||||||||||
Balance at end of period | 906,455 | 996,489 | 106,928 | 2,009,872 | 53,320 | (141,146 | ) | 1,922,046 | 1,637,312 |
2007 | 2006 | ||||||
Changes in cash and cash equivalents | |||||||
Cash and cash equivalents at beginning of year (Note 18.a) | 32,673 | 308,139 | |||||
Cash and cash equivalents at end of period (Note 18.a) | 191,565 | 40,849 | |||||
Net increase (decrease) in cash and cash equivalents | 158,892 | (267,290 | ) | ||||
Cash flows from operating activities | |||||||
Net income for the period | 69,923 | 260,028 | |||||
Adjustments to reconcile net income to net cash flows provided by operating activities | |||||||
Depreciation of property, plant and equipment (Exhibit A) | 132,445 | 134,759 | |||||
Retirement of property, plant and equipment (Exhibit A) | 495 | 403 | |||||
Gain from investments in affiliated company | (54 | ) | (11 | ) | |||
Gain on extinguishment of former debt (Note 3.k) | 0 | (179,243 | ) | ||||
Adjustment to present value of notes (Note 3.k) | 46,261 | (75,495 | ) | ||||
Adjustment to present value of repurchased notes | (877 | ) | 0 | ||||
Exchange difference, interest and penalties on loans | 55,774 | 59,944 | |||||
Supplies recovered from third parties | 0 | (5,782 | ) | ||||
Income tax (Note 3.n) | 106,816 | (72,315 | ) | ||||
Adjustment to present value of the retroactive tariff increase arising from the application of the new electricity rate schedule and of the Payment Plan Agreement with the Province of Bs.As. (Note 17.b) | 32,404 | 0 | |||||
Changes in assets and liabilities: | |||||||
Net increase in trade receivables | (192,635 | ) | (25,165 | ) | |||
Net decrease (increase) in other receivables | 6,311 | (20,995 | ) | ||||
Increase in supplies | (9,222 | ) | (4,008 | ) | |||
Increase in trade accounts payable | 20,438 | 31,724 | |||||
Increase in salaries and social security taxes | 6,327 | 15,581 | |||||
Increase (Decrease) in taxes | 23,625 | (4,379 | ) | ||||
Increase in other liabilities | 10,605 | 38,505 | |||||
Net increase in accrued litigation | 12,379 | 5,872 | |||||
Financial interest paid (net of interest capitalized) (Note 18.b) | (14,608 | ) | (12,276 | ) | |||
Financial interest collected (Note 18.b) | 2,291 | 1,482 | |||||
Net cash flows provided by operating activities | 308,698 | 148,629 | |||||
Cash flows from investing activities | |||||||
Additions of property, plant and equipment | (187,263 | ) | (105,125 | ) | |||
Net cash flows used in investing activities | (187,263 | ) | (105,125 | ) | |||
Cash flows from financing activities | |||||||
Decrease in loans | (144,316 | ) | (310,794 | ) | |||
Capital increase (Note 16) | 181,773 | 0 | |||||
Net cash flows provided by (used in) financing activities | 37,457 | (310,794 | ) | ||||
Net Increase (Decrease) in Cash and Cash Equivalents | 158,892 | (267,290 | ) |
1. | ORGANIZATION AND START UP OF THE COMPANY |
a) | 51% of the Company’s capital stock, represented by 462,292,111 Class “A” shares, which have been pledged in favor of the Argentine Government as evidenced by the certificate issued by Caja de Valores, is held by EASA, |
b) | 48.78% of the Company’s capital stock, represented by 442,210,356 Class “B” shares is traded in the market, |
c) | 0.2% of the Company’s capital stock, represented by 1,952,604 Class “C” shares is held by Banco Nación as trustee of the Employee Stock Ownership Program, and |
d) | 19 and 10 Class “B” shares are held by NEV and EDFI, respectively. |
2. | BASIS OF PRESENTATION OF THE FINANCIAL STATEMENTS |
Year | Effect on deferred tax result Nominal value | |||
2007 (three months) | 5,982 | |||
2008 | 27,541 | |||
2009 | 26,396 | |||
2010 | 25,011 | |||
2011 - 2015 | 111,174 | �� | ||
2016 - 2020 | 92,321 | |||
Remainder | 157,831 | |||
Total | 446,256 |
Cost | 844 | |||
Interest | 2,155 | |||
Amortization of recognized net actuarial loss | 570 | |||
3,569 |
The detail of the variations in the Company’s payment obligations under the personnel benefits plan as of September 30, 2007, is as follows:
Payment obligations under the personnel benefits plan at the beginning of the year | 15,352 | |||
Cost | 844 | |||
Interest | 2,155 | |||
Actuarial loss | 0 | |||
Benefits paid to participating employees | (291 | ) | ||
Payment obligations under the personnel benefits plan at the end of the period | 18,060 | |||
Payment obligations under the personnel benefits plan at the end of the period | 18,060 | |||
Unrecognized net actuarial loss | (5,144 | ) | ||
Total personnel benefits plan (pension plan) (Note 8) | 12,916 |
Discount rate | 19 | % | ||
Salary increase | 15 | % | ||
Inflation | 12 | % |
3. | VALUATION CRITERIA |
a) | Cash and banks: |
· | In local currency: at nominal value. |
· | In foreign currency: at the exchange rate in effect as of the end of the period/year. The corresponding detail is disclosed in Exhibit G. |
b) | Current investments: |
· | Time deposits, which include the portion of interest income accrued through the end of the period/year; those denominated in foreign currency have been valued at the rate of exchange in effect as of the end of the period/year, |
· | Money market funds, which have been valued at the prevailing market price as of the end of the period/year, and |
· | Notes receivable (Commercial Paper - Erste Bank Austria), which have been valued at acquisition cost, plus interest income accrued through the end of the period/year translated into pesos at the rate of exchange in effect as of the end of the period/year. |
c) | Trade receivables: |
· | Services rendered and billed but not collected, and services rendered but unbilled as of the end of the period/year, at nominal value; |
· | Services rendered but unbilled as of the end of the nine-month period ended September 30, 2007, arising from the retroactive increase deriving from the application of the new electricity rate schedule (Note 17.b) have been valued on the basis of the best estimate of the amount to be collected, discounted at a 10% annual nominal rate, which, in accordance with the Company’s criterion, reasonably reflects market assessments of the time value of money and risks specific to the receivable. A similar procedure was followed with the amount included in the payment plan agreement signed with the Province of Buenos Aires under the Framework Agreement (Note 13). |
1. | are net of an allowance for doubtful accounts, as described in more detail in paragraph i) of this Note. |
2. | consider the effects of that which is stated in Note 13. |
d) | Other receivables and liabilities (excluding loans): |
· | In local currency: at nominal value. |
· | In foreign currency: at the exchange rate in effect as of the end of the period/year (Exhibit G). |
e) | Municipal Bonds |
f) | Supplies: |
g) | Non-current investments: |
h) | Property, plant and equipment: |
i) | Allowances (Exhibit E): |
· | Deducted from current assets: |
· | for doubtful accounts: it has been recorded to adjust the valuation of trade receivables up to their estimated recoverable value. The amount of the allowance has been determined based on the historical series of collections for services billed through the end of the period/year and collections subsequent thereto. |
· | Deducted from non-current assets: |
· | for impairment of value of deferred tax assets: as of September 30, 2007 and December 31, 2006 the Company has partially reversed out the valuation allowance. (Note 3.n) |
· | for impairment of value of Municipal Bonds: due to impairment indicators, as of December 31, 2006 the Company recorded an allowance to reduce the value of such bonds to their expected recoverable amount (Note 3.e). |
j) | Accrued litigation: |
k) | Loans: |
l) | Shareholders' equity accounts: |
m) | Statement of income accounts: |
· | The accounts that accumulate monetary transactions as of September 30, 2007 and 2006 have been disclosed at their nominal values. |
· | The charges for non-monetary assets consumed have been valued at cost restated to reflect the effects of inflation on the basis of the date of acquisition of such assets, as indicated in Note 2. |
· | Financial income (expense) and holding gains (losses) have been disclosed separately under income (expense) generated by assets and by liabilities. |
· | The adjustment to present value of the notes is stated at nominal value. |
· | The gain on extinguishment of former debt as of September 30, 2006 is stated at nominal value. |
· | The adjustments to present value of trade receivables related to both the application of the retroactive tariff increase agreed upon in the Adjustment Agreement and the payment plan agreement signed with the Province of Buenos Aires for amounts deriving from the Framework Agreement as of September 30, 2007 are stated at their nominal value. |
· | The adjustment to present value of repurchased notes as of September 30, 2007 is stated at nominal value. |
n) | Income tax and tax on minimum presumed income: |
2007 | 2006 | ||||||
Income tax calculated at tax rate in effect on the income before taxes | 61,859 | 65,700 | |||||
Permanent differences | |||||||
Adjustment for inflation of property, plant and equipment | 23,916 | 25,211 | |||||
Accruals and other | 4,395 | 41,384 | |||||
Income tax | 90,170 | 132,295 | |||||
Increase (Decrease) in the allowance for impairment of value of deferred tax assets | 16,646 | (204,610 | ) | ||||
Income tax for the period | 106,816 | (72,315 | ) |
Allowance for impairment of value of deferred tax assets | |||||||
Balance at beginning of year | 32,261 | 312,187 | |||||
Increase (Decrease) in the allowance for impairment of value of deferred tax assets | 16,646 | (204,610 | ) | ||||
Balance at end of period | 48,907 | 107,577 |
2007 | 2006 | ||||||
Non-current deferred tax assets | |||||||
Tax-loss carry forward | 71,358 | 143,886 | |||||
Allowance for doubtful accounts | 11,384 | 6,426 | |||||
Accruals | 37,016 | 93,179 | |||||
Adjustment to present value of the retroactive tariff increase arising from the application of the new electricity rate schedule and other trade receivables | 11,342 | 0 | |||||
Supplies valuation | 218 | 159 | |||||
131,318 | 243,650 | ||||||
Non-current deferred tax liabilities | |||||||
Property, plant and equipment | ( 18,239 | ) | (24,209 | ) | |||
Adjustment to present value of the notes | ( 3,807 | ) | (19,998 | ) | |||
(22,046 | ) | (44,207 | ) | ||||
Net deferred tax assets before allowance | 109,272 | 199,443 | |||||
Allowance for impairment of value of deferred tax assets | (48,907 | ) | (32,261 | ) | |||
Net deferred tax assets | 60,365 | 167,182 |
Amount | Tax rate 35% | Year expiring | ||||||||
Tax loss carry forward 2002 | 180,119 | 63,042 | 2007 | |||||||
Tax loss carry forward 2005 | 23,761 | 8,316 | 2010 | |||||||
Total tax losses as of September 30, 2007 | 203,880 | 71,358 |
ñ) | Operating leases: |
2007 | 749 | |||
2008 | 1,145 | |||
2009 | 211 | |||
2010 | 147 | |||
2011 | 147 | |||
2012 | 147 | |||
Total minimum lease payments | 2,546 |
2007 | 2006 | ||||||
Total rental expenses | 2,164 | 1,955 |
2007 | 2,471 | |||
2008 | 3,525 | |||
2009 | 1,474 | |||
2010 | 9 | |||
2011 | 9 | |||
Total minimum lease collections | 7,488 |
2007 | 2006 | ||||||
Total rental income | 7,916 | 9,276 |
o) | Labor cost liabilities and Early retirements payable: |
· | for supplementary benefits of paid leaves of absence derived from accumulated vacation, |
· | for seniority-based bonus to be granted to employees with a specified number of years of employment, as stipulated in collective bargaining agreements in effect (as of September 30, 2007 and December 31, 2006, the accrual for such bonuses amounted to 5,176 and 4,847 respectively), and |
· | for other personnel benefits (pension plan) to be granted to employees upon retirement, as stipulated in collective bargaining agreements in effect (as of September 30, 2007 and December 31, 2006, the accrual for these benefits amounted to 12,916 and 9,638 respectively). |
p) | Customer deposits and contributions: |
1. | When the power supply is requested and the user is unable to provide evidence of his legal ownership of the premises; |
2. | When service has been suspended more than once in one-year period; |
3. | When the power supply is reconnected and the Company is able to verify the illegal use of the service (fraud). |
4. | When the customer is undergoing liquidated bankruptcy or reorganization proceedings. |
q) | Revenue recognition: |
r) | Estimates: |
s) | Earnings per common share: |
t) | Segment information: |
u) | Risk management: |
v) | Concentration risks: |
w) | Financial statements comparison: |
x) | Foreign currency translation/ transactions: |
4. | TRADE RECEIVABLES |
2007 | 2006 | ||||||
Current: | |||||||
Receivables from sales of electricity: | |||||||
Billed | 152,547 | 112,706 | |||||
Unbilled | |||||||
Sales of electricity | 107,995 | 92,803 | |||||
Retroactive tariff increase arising from the application of the new electricity rate schedule (Note 17.b item d) | 45,942 | 0 | |||||
Adjustment to present value of the retroactive tariff increase arising from the application of the new electricity rate schedule (Note 3.c) | (2,421 | ) | 0 | ||||
Framework Agreement (Note 3.c and 13) | 7,579 | 45,552 | |||||
Framework Agreement - Payment plan with the Province of Bs. As. (Note 13) | 18,076 | 0 | |||||
Adjustment to present value of the Framework Agreement - Payment plan with the Province of Bs. As. (Note 3.c) | (463 | ) | 0 | ||||
National Fund of Electricity (Note 17.a) | 3,907 | 23,015 | |||||
Cannon payable for the expansion of the network, transportation and others (Note 17.b) | 12,700 | 11,882 | |||||
In litigation | 9,280 | 10,603 | |||||
Subtotal | 355,142 | 296,561 | |||||
Less: | |||||||
Allowance for doubtful accounts (Exhibit E) | (35,847 | ) | (25,623 | ) | |||
319,295 | 270,938 |
2007 | 2006 | ||||||
Non-Current: | |||||||
Receivables from sales of electricity: | |||||||
Unbilled | |||||||
Retroactive tariff increase arising from the application of the new electricity rate schedule (Note 17.b item d) | 139,103 | 0 | |||||
Adjustment to present value of the retroactive tariff increase arising from the application of the new electricity rate schedule (Note 3.c) | (29,520 | ) | 0 | ||||
109,583 | 0 |
5. | OTHER RECEIVABLES |
2007 | 2006 | ||||||
Current: | |||||||
Prepaid expenses (1) | 2,254 | 1,305 | |||||
Advances to suppliers | 537 | 1,082 | |||||
Advances to personnel | 178 | 238 | |||||
Related parties (2) (Note 15) | 448 | 4,877 | |||||
Preliminary attachments - ENRE - (Note 17.a) | 59 | 67 | |||||
Municipal Bonds (Note 3.e) | 0 | 11,836 | |||||
Allowance for impairment of value of Municipal Bonds ( Exhibit E) | 0 | (5,918 | ) | ||||
Other debtors (3) | 13,630 | 15,175 | |||||
Allowance for other doubtful accounts (Exhibit E) | (2,750 | ) | (2,300 | ) | |||
Other (4) | 4,517 | 3,859 | |||||
18,873 | 30,221 |
2007 | 2006 | ||||||
Non-current: | |||||||
Other debtors (Note 16.c) | 0 | 3,077 | |||||
Tax credit on minimum presumed income (Note 3.n) | 94,324 | 86,031 | |||||
Net deferred tax assets (Note 3.n) | 109,272 | 199,443 | |||||
Allowance for impairment of value of deferred tax assets (Exhibit E) | (48,907 | ) | (32,261 | ) | |||
Other | 7 | 185 | |||||
154,696 | 256,475 |
(1) | Includes 102 and 101 in foreign currency (Exhibit G) as of September 30, 2007 and December 31, 2006. |
(2) | Includes 4,429 in foreign currency (Exhibit G) as of December 31, 2006. |
(3) | Includes 770 and 4,338 in foreign currency (Exhibit G) as of September 30, 2007 and December 31, 2006, respectively. |
(4) | Includes 1,898 and 754 in foreign currency (Exhibit G) as of September 30, 2007 and December 31, 2006, respectively. |
6. | TRADE ACCOUNTS PAYABLE |
2007 | 2006 | ||||||
Current: | |||||||
Payables for purchase of electricity and other purchases (1) | 192,697 | 158,371 | |||||
Unbilled electric power purchases | 77,618 | 92,877 | |||||
Customer contributions (Note 3.p) | 13,842 | 16,123 | |||||
Other | 828 | 269 | |||||
284,985 | 267,640 | ||||||
Non-Current: | |||||||
Customer deposits (Note 3.p) | 34,343 | 31,250 |
(1) | Includes 23,234 and 16,271 in foreign currency (Exhibit G) as of September 30, 2007 and December 31, 2006, respectively. Also, includes balances with SACME S.A. for 627 and 676 as of September 30, 2007 and December 31, 2006, respectively and balances with Errecondo, Salaverri, Dellatorre, Gonazalez & Burgio for 16 as of December 31, 2006 (Note 15). |
7. | LOANS |
2007 | 2006 | ||||||
Current: | |||||||
Notes: | |||||||
In foreign currency (Exhibit G and Note 14) | |||||||
Fixed and Incremental rate Discount Notes - Class A | 10,893 | 0 | |||||
Fixed and Incremental rate Discount Notes - Class B | 5,172 | 0 | |||||
Interest (Note 14) | 11,678 | 2,029 | |||||
Subtotal | 27,743 | 2,029 | |||||
Adjustment to present value of notes | (1,061 | ) | 0 | ||||
Notes at present value | 26,682 | 2,029 | |||||
Non-Current: | |||||||
Notes: | |||||||
In foreign currency (Exhibit G and Note 14) | |||||||
Fixed and Incremental rate Par Notes - Class A | 231,476 | 225,009 | |||||
Fixed and Incremental rate Par Notes - Class B | 125,008 | 153,986 | |||||
Floating rate Par Notes - Class A | 39,867 | 38,753 | |||||
Fixed and Incremental Rate Discount Notes - Class A | 424,858 | 466,409 | |||||
Fixed and Incremental Rate Discount Notes - Class B | 201,678 | 268,471 | |||||
Subtotal | 1,022,887 | 1,152,628 | |||||
Adjustment to present value of notes | (9,816 | ) | (57,138 | ) | |||
Notes at present value | 1,013,071 | 1,095,490 |
8. | SALARIES AND SOCIAL SECURITY TAXES |
2007 | 2006 | ||||||
Current: | |||||||
Salaries payable and accruals | 47,182 | 44,423 | |||||
Social Security (ANSES) | 4,386 | 4,703 | |||||
Early retirements payable (Note 3.o) | 2,394 | 2,320 | |||||
53,962 | 51,446 | ||||||
Non-Current (Note 3.o): | |||||||
Other personnel benefits (Note 2) | 12,916 | 9,638 | |||||
Seniority-based bonus | 5,176 | 4,847 | |||||
Early retirements payable | 6,006 | 5,802 | |||||
24,098 | 20,287 |
9. | TAXES |
2007 | 2006 | ||||||
Current: | |||||||
Provincial, municipal and federal contributions and taxes | 27,342 | 19,568 | |||||
Value Added Tax (VAT) | 24,266 | 11,935 | |||||
Tax on minimum presumed income | 4,035 | 6,507 | |||||
Withholdings | 5,378 | 4,894 | |||||
Municipal taxes | 20,379 | 15,044 | |||||
Other | 4,417 | 4,244 | |||||
85,817 | 62,192 |
10. | OTHER LIABILITIES |
2007 | 2006 | ||||||
Current: | |||||||
Technical Assistance (1) | 262 | 4,465 | |||||
Capital expenditures fund - CAMMESA (Note 17.b) | 12,755 | 0 | |||||
Fees related to the initial public offering of capital stock (2) | 818 | 3,820 | |||||
Fees related to debt restructuring (Exhibit G) | 0 | 7,299 | |||||
Fees related to the issuance of Corporate Notes (Note 23 and Exhibit G) | 4,531 | 0 | |||||
Program for the rational use of electric power (PUREE) | 8,483 | 6,926 | |||||
Other (3) | 3,541 | 3,870 | |||||
30,390 | 26,380 | ||||||
Non-current: | |||||||
ENRE penalties (Note 17 a and b) | 260,180 | 241,079 | |||||
(1) | In foreign currency (Exhibit G) as of September 30, 2007 and December 31, 2006, respectively. The 4,465 correspond to a balance with Electricidad Argentina S.A. as of December 31, 2006 (Note 15). |
(2) | Includes 818 and 3,764 in foreign currency (Exhibit G) as of September 30, 2007 and December 31, 2006, respectively. |
(3) | Includes 2,151 and 2,435 in foreign currency (Exhibit G) as of September 30, 2007 and December 31, 2006, respectively. Also, includes balances with Errecondo, Salaverri, Dellatorre, Gonzalez & Burgio for 473 and 208 as of September 30, 2007 and December 31, 2006, respectively (Note 15). |
11. | NET SALES |
2007 | 2006 | ||||||
Sales of electricity (1) | 1,478,957 | 1,001,102 | |||||
Late payment charges | 12,553 | 9,280 | |||||
Pole leases | 7,916 | 9,276 | |||||
Connection charges | 2,855 | 2,014 | |||||
Reconnection charges | 963 | 1,191 | |||||
1,503,244 | 1,022,863 |
12. | OTHER EXPENSE- NET |
2007 | 2006 | ||||||
Non operating income | 1,355 | 3,600 | |||||
Commissions on municipal taxes collection | 1,314 | 1,148 | |||||
Net expense from technical services | (2,492 | ) | (59 | ) | |||
Voluntary retirements and terminations | (5,331 | ) | (12,730 | ) | |||
Severance paid | (3,214 | ) | (2,415 | ) | |||
Accrued litigation | (13,750 | ) | (9,000 | ) | |||
Supplies recovered from third parties | 0 | 5,782 | |||||
Disposal of property, plant and equipment | (495 | ) | (403 | ) | |||
Other | 1,278 | (954 | ) | ||||
(21,335 | ) | (15,031 | ) |
13. | FRAMEWORK AGREEMENT |
14. | RESTRUCTURING OF FINANCIAL DEBT |
· | If creditors holding at least 66% but less than 93% of the aggregate outstanding amount give their consent to the Restructuring, the Company, the Supporting Creditors and the APE Representative, on behalf of Consenting Creditors, will promptly execute the Restructuring Agreement, and the Company may, at its own option, either proceed with a Mandatory Exchange through the APE or an In-APE Exchange on the Consummation Date or on the In-APE Exchange Date, respectively, subject in each case to the fulfillment of the Conditions to the APE Restructuring Alternatives; |
· | If creditors holding at least 93% but less than 98% of the aggregate outstanding amount give their consent to the Restructuring, the Company may, at its own option, either proceed with an In-APE Exchange (subject to the fulfillment of the Conditions to the APE Restructuring Alternatives) on the In-APE Exchange Date or carry out the Voluntary Exchange Offer (subject to the fulfillment of the Conditions to the Voluntary Exchange Offer) on the Voluntary Exchange Date; or |
· | If creditors holding at least 98% of the aggregate outstanding amount give their consent to the Restructuring, the Company will carry out the Voluntary Exchange Offer (subject to the fulfillment of the Conditions to the Voluntary Exchange Offer) on the Voluntary Exchange Date. |
· | The Fixed Rate Par Option: For each US$ 1,000 principal amount of outstanding financial debt, creditors received Fixed Rate Par Notes for a nominal value of US$ 1,000. The amount of Fixed Rate Par Notes issued under the Restructuring was not subject to a maximum amount. Interest on Fixed Rate Par Notes will be payable semiannually in arrears at an annual fixed rate, as detailed in the table below, and principal will be due and payable in semiannual installments based on the amortization schedule detailed in the table below: |
Year | Annual Interest Rate on Fixed Rate Par Notes | Annually Scheduled Amortization | |||||
1 | 3.0 | % | 0.0 | % | |||
2 | 4.0 | % | 0.0 | % | |||
3 | 5.0 | % | 0.0 | % | |||
4 | 6.0 | % | 0.0 | % | |||
5 | 8.0 | % | 0.0 | % | |||
6 | 9.0 | % | 10.0 | % | |||
7 | 9.5 | % | 10.0 | % | |||
8 through 11 | 10.0 | % | 10.0%, 10.0%, 10.0%, 50.0 | % |
· | The Floating Rate Par Option: For each US$ 1,000 principal amount of outstanding financial debt, creditors received Floating Rate Par Notes for a nominal value equal to (i) US$ 1,000 plus (ii) any accrued and unpaid interest as of December 31, 2005 (excluding penalty interest and additional amounts, if any) in respect of such US$ 1,000 principal amount of outstanding financial debt (or, in the case of Gain Trust Notes, any accrued and unpaid interest as of December 31, 2005 (excluding any penalty interest and additional amounts, if any) in respect of such US$ 1,000 principal amount of Gain Trust Notes). A maximum of US$ 50 million principal amount of outstanding financial debt could be exchanged under this option. Interest on Floating Rate Par Notes will be payable semiannually in arrears at an annual rate equal to LIBOR plus a spread, and principal will be due and payable in semiannual installments based on the amortization schedule detailed in the table below: |
Year | Annual Spread Floating Rate Par Notes | Annually Scheduled Amortization | |||||
1 | 0.0 | % | 0.0 | % | |||
2 | 0.0 | % | 0.0 | % | |||
3 | 1.0 | % | 0.0 | % | |||
4 through 6 | 1.5 | % | 0.0%, 0.0%, 5.0 | % | |||
7 through 14 | 2.0 | % | 5.0%, 5.0%, 5.0%, 5.0%, 5.0% 10.0%, 10.0%, 50.0 | % |
· | The Combination Option: For each US$ 1,000 principal amount of outstanding financial debt, creditors received (i) a cash payment of US$ 283 and (ii) Discount Notes for a nominal value of US$ 667. A fixed amount of US$ 360 million principal amount of outstanding financial debt could be exchanged under this option. Interest on Discount Notes will be payable semiannually in arrears at an annual fixed rate, and principal will be due and payable in semiannual installments based on the amortization schedule detailed in the table below: |
Year | Discount Applicable to Annual Interest Rate | Annually Scheduled Amortization | |||||
1 | 3.0 | % | 0.0 | % | |||
2 | 3.5 | % | 0.0 | % | |||
3 | 10.0 | % | 5.0 | % | |||
4 | 11.0 | % | 5.0 | % | |||
5 through 9 | 12.0 | % | 5.0%, 5.0%, 10.0%, 10.0%, 60.0 | % |
Type | Class | Debt structure in thousands of us$ | Debt repurchase in thousands of us$ | Post-repurchase debt structure in thousands of us$ | Balance as of September 30, 2007 (Note 7) in thousands of pesos | |||||||||||
A | 73,485 | 73,485 | 231,476 | |||||||||||||
Fixed Rate Par Note | ||||||||||||||||
B | 50,289 | (10,604 | ) | 39,685 | 125,008 | |||||||||||
Floating Rate Par Note | A | 12,656 | 12,656 | 39,867 | ||||||||||||
A | 152,322 | (13,988 | ) | 138,334 | 435,751 | |||||||||||
Discount Note | ||||||||||||||||
B | 87,678 | (22,012 | ) | 65,666 | 206,850 | |||||||||||
Total | 376,430 | (46,604 | ) | 329,826 | 1,038,952 |
Year | Amount in thousands of US$ | |||
2008 | 10,200 | |||
2009 | 10,200 | |||
2010 | 10,200 | |||
2011 | 22,150 | |||
2012 | 32,350 | |||
2013 | 32,350 | |||
2014 | 134,348 | |||
2015 | 11,950 | |||
2016 | 57,218 | |||
2017 | 1,266 | |||
2018 | 1,266 | |||
2019 | 6,328 | |||
329,826 |
· | Based on the level of excess cash (leverage ratio) and subject to maintaining an established minimum cash balance of US$ 15 million, the Company will be subject to the following conditions: |
· | The Company may make permitted capital expenditures up to an agreed-upon annual amount. |
· | Upon the occurrence of an Adverse Event, EDENOR, at its discretion, may elect to defer, reschedule and capitalize up to one year of principal amortization payments and one year of interest payments on any or all series of notes by written notice to the holders on each payment date or prior thereto. This provision may be invoked only once in respect of both an Adverse Cash Flow Event and an Adverse Devaluation Event during the term of the Notes. |
· | The Company may incur additional indebtedness subject to certain conditions that are described in the trust agreement for the issuance of the corporate notes. |
· | Restricted Payments: No dividends shall be paid until April 24, 2008 or until such time when the Company’s Leverage Ratio is lower than 2.5, whichever occurs first. Fees payable under the technical assistance agreement shall not exceed US$ 2 million. Payments to EASA shall not exceed US$ 2.5 million in any fiscal year. |
· | -The Company may suspend compliance with any covenants provided that its leverage ratio is equal to or lower than 2.5. |
· | In the case that the Company carries out a primary equity public offering and as long as the Company’s Leverage ratio is higher than 2.5, the Company shall be required to apply 25% of the net cash proceeds of the base offering amount to purchase notes through market purchases, taking into account that the Company shall have a two-year period to make the aforementioned purchases of notes through market purchases and the Company shall have no obligation to make the aforementioned purchases of notes at a price greater than the nominal value of the Notes. |
15. | BALANCES AND TRANSACTIONS WITH RELATED PARTIES |
2007 | 2006 | ||||||
Other receivables (Note 5) | |||||||
Electricidad Argentina S.A. | 0 | 4,429 | |||||
SACME S.A. | 448 | 448 | |||||
Total | 448 | 4,877 |
Trade accounts payable (Note 6) | |||||||
Errecondo, Salaverri, Dellatorre, Gonzalez & Burgio | 0 | (16 | ) | ||||
SACME S.A. | (627 | ) | (676 | ) | |||
Total | (627 | ) | (692 | ) | |||
Other liabilities (Note 10) | |||||||
Electricidad Argentina S.A. | 0 | (4,465 | ) | ||||
Errecondo, Salaverri, Dellatorre, Gonzalez & Burgio | (473 | ) | (208 | ) | |||
Total | (473 | ) | (4,673 | ) |
2007 | 2006 | ||||||
Other Income | |||||||
Electricidad Argentina S.A. | 7 | 2 | |||||
Total | 7 | 2 | |||||
Expenses from services | |||||||
SACME S.A. | (2,511 | ) | (1,641 | ) | |||
Electricidad Argentina S.A. | (203 | ) | 0 | ||||
EDF International | (3,727 | ) | (5,269 | ) | |||
Total | (6,441 | ) | (6,910 | ) | |||
Financial expenses, interest and penalties | |||||||
EDF International | 0 | (4,422 | ) | ||||
Electricidad Argentina S.A. | (4,648 | ) | (6,538 | ) | |||
Errecondo, Salaverri, Dellatorre, Gonzalez & Burgio | (3,488 | ) | 0 | ||||
Total | (8,136 | ) | (10,960 | ) | |||
Financial debt restructuring result | |||||||
EDF International | 0 | 38,114 | |||||
Adjustment to present value of notes | |||||||
EDF International | 0 | 12,180 |
16. | CAPITAL STOCK |
a) | General |
b) | Restriction on the transfer of the Company’s common shares |
c) | Employee Stock Ownership Program (ESOP) |
17. | REGULATORY FRAMEWORK |
a) | General |
1. | Deviation from quality levels of technical product, as measured by voltage levels and network variations; |
2. | Deviation from quality levels of technical service, as measured by the average interruption frequency per Kilovatios (KVA) and total interruption time per KVA; |
3. | Deviation from quality levels of commercial service, as measured by the number of claims and complaints made by customers, service connection times, the number of estimated bills and billing mistakes; |
4. | Failure to comply with information gathering and processing requirements so as to evaluate the quality of both the technical product and the technical service; |
5. | Failure to comply with public safety regulations. |
b) | Concession |
i) | the implementation of a Temporary Tariff Regime (RTT) effective as from November 1, 2005, including a 23% average increase in the distribution margin, which may not result in an increase in the average tariff of more than 15%, and an additional 5% average increase in the value added distribution (VAD), allocated to certain specified capital expenditures; |
ii) | the requirement that during the term of said temporary tariff regime, dividend payment is subject to the approval of the regulatory authority; |
iii) | the establishment of a “social tariff” for the needy and the levels of quality of the service to be rendered; |
iv) | the suspension of the claims and legal actions filed by the Company and its shareholders in national or foreign courts due to the effects caused by the Economic Emergency Law (Note 25); |
v) | the carrying out of a Revision of the Company Tariff Structure (RTI) which will result in a new tariff regime that will go into effect on a gradual basis and remain in effect for the following 5 years. In accordance with the provisions of Law N° 24,065, the National Electric Power Regulatory Authority will be in charge of such review; |
vi) | the implementation of a minimum investment plan in the electric network for an amount of 178.8 million to be fulfilled by EDENOR during 2006, plus an additional investment of 25.5 million should it be required (item f below); |
vii) | the adjustment of the penalties imposed by the ENRE that are payable to customers as discounts, which were notified by such regulatory agency prior to January 6, 2002 as well as of those that have been notified, or whose cause or origin has arisen in the period between January 6, 2002 and the date on which the Adjustment Agreement goes into effect; |
viii) | the waiver of the penalties imposed by the ENRE that are payable to the Argentine State, which have been notified, or their cause or origin has arisen in the period between January 6, 2002 and the date on which the Adjustment Agreement goes into effect; |
ix) | the payment of the penalties imposed by the ENRE, which are described in paragraph vii above, in fourteen semiannual installments, which represent approximately two-thirds of the penalties imposed by the ENRE before January 6, 2002 as well as of those that have been notified, or whose cause or origin has arisen in the period between January 6, 2002 and the date on which the Adjustment Agreement goes into effect, subject to compliance with certain requirements. |
a) | A 23% average increase in distribution costs, service connection costs and service reconnection costs in effect which the Company collects as the holder of the concession of the public service of electric power distribution, except for the residential tariffs; |
b) | Implementation of an additional 5% average increase in distribution costs, to be applied to the execution of the works and infrastructure plan detailed in Appendix II of the Adjustment Agreement. In this regard, the Company has set up the required fund, which as of September 30, 2007 amounts to 10,561. This amount is net of the 12,755 transferred to CAMMESA on October 12, 2007 (Note 10); |
c) | Implementation of the Cost Monitoring Mechanism (MMC) contemplated in Appendix I of the Adjustment Agreement, which for the six-month period beginning November 1, 2005 and ending April 30, 2006, shows a percentage of 8.032%. This percentage will be applied to non-residential consumption recorded from May 1, 2006 through January 31, 2007; |
d) | Invoicing in 55 equal and consecutive monthly installments of the differences arising from the application of the new electricity rate schedule for non-residential consumption recorded from November 1, 2005 through January 31, 2007 (items i) and ii) above) and from May 1, 2006 through January 31, 2007 (item iii) above); |
e) | Invoicing of the differences corresponding to deviations between foreseen physical transactions and those effectively carried out and of other concepts related to the Wholesale Electric Power Market (MEM), such as the Specific fee payable for the expansion of the network, Transportation and Others, included in Trade Receivables under Receivables from sales of electricity as Unbilled (Note 4); |
f) | Presentation, within a period of 45 calendar days from the issuance of this resolution, of an adjusted annual investment plan, in physical and monetary values, in compliance with the requirements of the Adjustment Agreement. |
18. | CASH FLOW INFORMATION |
a) | Cash and cash equivalents: |
As of September 30, 2007 | As of December 31, 2006 | As of September 30, 2006 | As of December 31, 2005 | ||||||||||
Cash and Banks | 5,050 | 481 | 2,821 | 11,659 | |||||||||
Time deposits | 156,668 | 1,360 | 3,761 | 278,238 | |||||||||
Money market funds | 25,875 | 30,832 | 34,267 | 18,242 | |||||||||
Notes receivable (Commercial Paper - Erste Bank Austría) | 3,972 | 0 | 0 | 0 | |||||||||
Total cash and cash equivalents in the Statement of Cash Flows | 191,565 | 32,673 | 40,849 | 308,139 |
b) | Interest paid and collected: |
For the nine-month periods ended September 30, | |||||||
2007 | 2006 | ||||||
Interest paid during the period (*) | (22,024 | ) | (19,384 | ) | |||
Interest collected during the period | 2,291 | 1,482 |
19. | INSURANCE COVERAGE |
Risk covered | Amount insured | ||||||
Comprehensive (1) | $US | 417,516,597 | |||||
Mandatory life insurance | $ | 17,334,000 | |||||
Theft of securities | $US | 100,000 | |||||
Vehicles (theft, third party liability and damages) | $ | 8,095,200 | |||||
Special equipment | $US | 621,627 | |||||
Land freight | $US | 2,000,000 | |||||
Imports freight | $ | 2,250,000 |
(1) | Includes: fire, partial theft, tornado, hurricane, earthquake, earth tremors, flooding and debris removal from facilities on facilities providing actual service, except for high, medium and low voltage networks. |
20. | CLAIM OF THE PROVINCE OF BUENOS AIRES BOARD OF ELECTRIC POWER |
21. | LEGAL ACTION FOR ALLEGED ENVIRONMENTAL POLLUTION |
22. | RESTRICTIONS ON THE DISTRIBUTION OF EARNINGS |
23. | CORPORATE NOTES PROGRAM |
24. | BREAKDOWN OF TEMPORARY INVESTMENTS, RECEIVABLES AND LIABILITIES BY COLLECTION AND PAYMENT TERMS |
Term | Time Deposits and Money Market Funds | Receivables (1) | Loans | Other payables (2) | |||||||||
With no explicit due date | 25,875 | 0 | 0 | 260,180 | |||||||||
With due date | |||||||||||||
Pastdue: | |||||||||||||
Upto three months | 0 | 57,416 | 0 | 0 | |||||||||
From three to six months | 0 | 7,390 | 0 | 0 | |||||||||
From six to nine months | 0 | 6,040 | 0 | 0 | |||||||||
From nine to twelve months | 0 | 6,316 | 0 | 0 | |||||||||
Over one year | 0 | 81,406 | 0 | 0 | |||||||||
Total past due | 0 | 158,568 | 0 | 0 | |||||||||
To become due: | |||||||||||||
Upto three months | 160,640 | 181,019 | 11,678 | 426,629 | |||||||||
From three to six months | 0 | 12,606 | 0 | 13,982 | |||||||||
From six to nine months | 0 | 12,492 | 15,004 | 7,272 | |||||||||
From nine to twelve months | 0 | 12,080 | 0 | 7,271 | |||||||||
Over one year | 0 | 313,186 | 1,013,071 | 58,441 | |||||||||
Total to become due | 160,640 | 531,383 | 1,039,753 | 513,595 | |||||||||
Total with due date | 160,640 | 689,951 | 1,039,753 | 513,595 | |||||||||
Total | 186,515 | 689,951 | 1,039,753 | 773,775 |
(1) | Excludes allowances |
(2) | Comprises total liabilities except accrued litigation and debt notes. |
25. | EFFECTS OF THE DEVALUATION OF THE ARGENTINE PESO AND OF OTHER CHANGES TO THE ECONOMIC RULES |
a) | the conversion into pesos of public works contracts and privatized utility rates with adjustment clauses in US dollars at the rate of ARS 1 per US dollar. |
b) | the renegotiation of the concession agreement, whose process was declared open by Law N° 25,561 and regulated by Decrees N° 370/02 and 311/03 of the Federal Executive Power. The period for the completion of the aforementioned process has been extended by Law N° 25,972 until December 31, 2005, by Law N° 26,077 until December 31, 2006 and subsequently until December 31, 2007 by Law N° 26,204. |
26. | SUBSEQUENT EVENTS |
a) | Corporate Notes Program (Note 23) |
· | encumbrance or authorization to encumber its property or assets; |
· | incurrence of indebtedness, in certain specified cases; |
· | sale of the Company’s assets related to its main business; |
· | carrying out of transactions with shareholders or related parties; |
· | making of certain payments (including, among others, dividends, purchases of Edenor’s common shares or payments on subordinated debt). |
(a) | The Company’s long-term debt rating is raised to Investment Grade, or |
(b) | The Company’s Level of Indebtedness is equal to or lower than 2.5. |
27. | FINANCIAL STATEMENTS TRANSLATION INTO ENGLISH LANGUAGE |
Original value | Depreciation | Net | Net | ||||||||||||||||||||||||||||||||||
MAIN ACCOUNT | At beginning of year | Additions | Retirements | Transfers | At end of period | At beginning of year | Retirements | For the period | Annual rate | At end of period | book value 2007 | book value 2006 | |||||||||||||||||||||||||
FACILITIES IN SERVICE | |||||||||||||||||||||||||||||||||||||
Substations | 849,840 | 0 | 0 | 22,725 | 872,565 | 284,103 | 0 | 19,543 | 3 - 4 | % | 303,646 | 568,919 | 565,737 | ||||||||||||||||||||||||
High voltage networks | 343,107 | 0 | 0 | 38,841 | 381,948 | 122,853 | 0 | 8,330 | 3 - 4 | % | 131,183 | 250,765 | 220,254 | ||||||||||||||||||||||||
Medium voltage networks | 748,656 | 0 | (59 | ) | 21,224 | 769,821 | 275,357 | (34 | ) | 18,115 | 3 - 4 | % | 293,438 | 476,383 | 473,299 | ||||||||||||||||||||||
Low voltage networks | 1,628,179 | 0 | (740 | ) | 25,636 | 1,653,075 | 878,202 | (270 | ) | 45,842 | 4 - 5 | % | 923,774 | 729,301 | 749,977 | ||||||||||||||||||||||
Transformation chambers and platforms | 460,791 | 0 | 0 | 25,792 | 486,583 | 175,334 | 0 | 11,872 | 3 - 4 | % | 187,206 | 299,377 | 285,457 | ||||||||||||||||||||||||
Meters | 546,887 | 0 | 0 | 29,444 | 576,331 | 211,057 | 0 | 17,935 | 4 - 5 | % | 228,992 | 347,339 | 335,830 | ||||||||||||||||||||||||
Buildings | 76,215 | 0 | 0 | 756 | 76,971 | 19,955 | 0 | 829 | 2 - 3 | % | 20,784 | 56,187 | 56,260 | ||||||||||||||||||||||||
Communications network and facilities | 83,637 | 0 | 0 | 586 | 84,223 | 48,273 | 0 | 3,170 | 4 - 5 | % | 51,443 | 32,780 | 35,364 | ||||||||||||||||||||||||
Total facilities in service | 4,737,312 | 0 | (799 | ) | 165,004 | 4,901,517 | 2,015,134 | (304 | ) | 125,636 | 2,140,466 | 2,761,051 | 2,722,178 | ||||||||||||||||||||||||
FURNITURE, TOOLS AND EQUIPMENT | |||||||||||||||||||||||||||||||||||||
Furniture, equipment and software projects | 161,913 | 6,276 | 0 | 0 | 168,189 | 151,031 | 0 | 5,376 | 12 - 13 | % | 156,407 | 11,782 | 10,882 | ||||||||||||||||||||||||
Tools and other | 44,922 | 77 | 0 | 0 | 44,999 | 41,213 | 0 | 1,007 | 10 - 11 | % | 42,220 | 2,779 | 3,709 | ||||||||||||||||||||||||
Transportation equipment | 15,066 | 664 | 0 | 0 | 15,730 | 13,376 | 0 | 426 | 20 | % | 13,802 | 1,928 | 1,690 | ||||||||||||||||||||||||
Total furniture, tools and equipment | 221,901 | 7,017 | 0 | 0 | 228,918 | 205,620 | 0 | 6,809 | 212,429 | 16,489 | 16,281 | ||||||||||||||||||||||||||
Total assets subject to depreciation | 4,959,213 | 7,017 | (799 | ) | 165,004 | 5,130,435 | 2,220,754 | (304 | ) | 132,445 | 2,352,895 | 2,777,540 | 2,738,459 | ||||||||||||||||||||||||
CONSTRUCTION IN PROCESS | |||||||||||||||||||||||||||||||||||||
Transmission | 114,270 | 73,269 | 0 | (61,566 | ) | 125,973 | 0 | 0 | 0 | 0 | 125,973 | 114,270 | |||||||||||||||||||||||||
Distribution and other | 72,693 | 119,483 | 0 | (103,438 | ) | 88,738 | 0 | 0 | 0 | 0 | 88,738 | 72,693 | |||||||||||||||||||||||||
Total construction in process | 186,963 | 192,752 | 0 | (165,004 | ) | 214,711 | 0 | 0 | 0 | 0 | 214,711 | 186,963 | |||||||||||||||||||||||||
Total 2007 | 5,146,176 | 199,769 | (799 | ) | 0 | 5,345,146 | 2,220,754 | (304 | ) | 132,445 | 2,352,895 | 2,992,251 | 0 | ||||||||||||||||||||||||
Total 2006 | 4,932,424 | 215,782 | (2,030 | ) | 0 | 5,146,176 | 2,043,154 | (1,380 | ) | 178,980 | 2,220,754 | 0 | 2,925,422 |
Information on Issuer | ||||||||||||||||||||||||||||||||||||||||
Last financial statements issued | ||||||||||||||||||||||||||||||||||||||||
Name and features of securities | Class | Face value | Number | Adjusted cost | Value on equity method | Net book value 09/30/07 | Main activity | Date | Capital | Income for the period | Equity | % interest in capital stock | Net book value 12/31/06 | |||||||||||||||||||||||||||
NON-CURRENT INVESTMENTS | ||||||||||||||||||||||||||||||||||||||||
Art. 33 Law No. 19,550 | ||||||||||||||||||||||||||||||||||||||||
-Companies- | ||||||||||||||||||||||||||||||||||||||||
Affiliated Company: | ||||||||||||||||||||||||||||||||||||||||
SACME S.A. | common | $ | 1 | 6,000 | 15 | 432 | 432 | Electric | 06/30/2007 | 28 | 108 | 864 | 50 | 378 | ||||||||||||||||||||||||||
non-endorsable | power | |||||||||||||||||||||||||||||||||||||||
services | ||||||||||||||||||||||||||||||||||||||||
Total | 432 | 378 |
Net book value | |||||||
MAIN ACCOUNT | 2007 | 2006 | |||||
CURRENT INVESTMENTS | |||||||
Time deposits | |||||||
. in foreign currency (Exhibit G) | 120,360 | 1,360 | |||||
. in local currency | 36,308 | 0 | |||||
Money market funds | |||||||
. in local currency | 25,875 | 30,832 | |||||
Notes receivable (Commercial Paper - Erste Bank Austría) | |||||||
. in foreign currency (Exhibit G) | 3,972 | 0 | |||||
Total | 186,515 | 32,192 |
2007 | 2006 | |||||||||||||||
MAIN ACCOUNT | At beginning of year | Additions | Retirements | At end of period | At end of year | |||||||||||
Deducted from current assets | ||||||||||||||||
For doubtful accounts | 25,623 | 15,323 | (5,099 | ) | 35,847 | 25,623 | ||||||||||
For other doubtful accounts | 2,300 | 450 | 0 | 2,750 | 2,300 | |||||||||||
For impairment of value of Municipal bonds | 5,918 | 0 | (5,918 | ) | 0 | 5,918 | ||||||||||
Deducted from non-current assets | ||||||||||||||||
For impairment of value of deferred | ||||||||||||||||
tax assets | 32,261 | 16,646 | 0 | 48,907 | 32,261 | |||||||||||
Included in current liabilities | ||||||||||||||||
Accrued litigation | 25,914 | 13,750 | (3,049 | ) | 36,615 | 25,914 | ||||||||||
Included in non-current liabilities | ||||||||||||||||
Accrued litigation | 40,606 | 1,678 | 0 | 42,284 | 40,606 |
2007 | 2006 | ||||||||||||||||||||||
Account | Foreign currency type and amount (2) | Exchange rate(1) | Booked amount in thousands of pesos | Foreign currency type and amount (2) | Booked amount in thousands of pesos | ||||||||||||||||||
Current Assets | |||||||||||||||||||||||
Cash and banks | US$ | 99,598 | 3.1100 | 310 | US$ | 61,953 | 187 | ||||||||||||||||
ECU | 34,670 | 4.4355 | 154 | ECU | 31,288 | 125 | |||||||||||||||||
Investments | |||||||||||||||||||||||
Time deposits | US$ | 38,701,126 | 3.1100 | 120,360 | US$ | 450,184 | 1,360 | ||||||||||||||||
Notes receivable (Commercial Paper - Erste Bank Austría) | US$ | 1,277,307 | 3.1100 | 3,972 | US$ | 0 | 0 | ||||||||||||||||
Other receivables | |||||||||||||||||||||||
Prepaid expenses | US$ | 32,929 | 3.1100 | 102 | US$ | 33,450 | 101 | ||||||||||||||||
Related companies | US$ | 0 | 3.1100 | 0 | US$ | 1,465,585 | 4,429 | ||||||||||||||||
Other debtors | US$ | 247,433 | 3.1100 | 770 | US$ | 1,435,544 | 4,338 | ||||||||||||||||
Other | US$ | 610,308 | 3.1100 | 1,898 | US$ | 249,637 | 754 | ||||||||||||||||
Total Current Assets | 127,566 | 11,294 | |||||||||||||||||||||
Total Assets | 127,566 | 11,294 | |||||||||||||||||||||
Current Liabilities | |||||||||||||||||||||||
Trade accounts payable | US$ | 7,088,356 | 3.1500 | 22,328 | US$ | 5,050,196 | 15,464 | ||||||||||||||||
ECU | 201,659 | 4.4928 | 906 | ECU | 199,772 | 807 | |||||||||||||||||
Loans notes | US$ | 8,807,352 | 3.1500 | 27,743 | US$ | 662,494 | 2,029 | ||||||||||||||||
Other liabilities | |||||||||||||||||||||||
Technical assistance | US$ | 83,333 | 3.1500 | 262 | US$ | 1,458,322 | 4,465 | ||||||||||||||||
Fees related to the initial public offering of capital stock | US$ | 259,717 | 3.1500 | 818 | US$ | 1,229,162 | 3,764 | ||||||||||||||||
Fees related to debt restructuring | US$ | 0 | 3.1500 | 0 | US$ | 2,383,781 | 7,299 | ||||||||||||||||
Fees related to corporate notes issuance program | US$ | 1,420,970 | 3.1500 | 4,476 | US$ | 0 | 0 | ||||||||||||||||
ECU | 12,200 | 4.4928 | 55 | ECU | 0 | 0 | |||||||||||||||||
Other | US$ | 607,808 | 3.1500 | 1,915 | US$ | 738,336 | 2,261 | ||||||||||||||||
ECU | 52,582 | 4.4928 | 236 | ECU | 42,986 | 174 | |||||||||||||||||
Total Current Liabilities | 58,739 | 36,263 | |||||||||||||||||||||
Non-Current Liabilities | |||||||||||||||||||||||
Loans notes | US$ | 324,726,032 | 3.1500 | 1,022,887 | US$ | 376,429,657 | 1,152,628 | ||||||||||||||||
Total Non-Current Liabilities | 1,022,887 | 1,152,628 | |||||||||||||||||||||
Total Liabilities | 1,081,626 | 1,188,891 |
(1) Selling and buying exchange rate of Banco de la Nación Argentina in effect at the end of the period.
2007 | 2006 | |||||||||||||||
Description | Transmission and Distribution Expenses | Selling Expenses | Administrative Expenses | Total | Total | |||||||||||
Salaries and social security taxes | 91,248 | 18,463 | 26,351 | 136,062 | 106,952 | |||||||||||
Postage and telephone | 1,065 | 5,983 | 1,018 | 8,066 | 7,323 | |||||||||||
Bank commissions | 0 | 5,601 | 0 | 5,601 | 4,950 | |||||||||||
Allowance for doubtful accounts | 0 | 15,773 | 0 | 15,773 | 11,440 | |||||||||||
Supplies consumption | 20,409 | 595 | 1,194 | 22,198 | 17,883 | |||||||||||
Outsourced services | 56,702 | 21,043 | 4,221 | 81,966 | 60,736 | |||||||||||
Rent and insurance | 1,768 | 475 | 2,512 | 4,755 | 3,362 | |||||||||||
Security service | 2,924 | 136 | 498 | 3,558 | 2,969 | |||||||||||
Professional fees | 1,124 | 116 | 2,105 | 3,345 | 3,652 | |||||||||||
Computer services | 23 | 2,088 | 8,488 | 10,599 | 7,911 | |||||||||||
Advertising | 0 | 0 | 12,957 | 12,957 | 6,239 | |||||||||||
Reimbursements to personnel | 4,076 | 856 | 981 | 5,913 | 5,270 | |||||||||||
Temporary personnel | 209 | 1,115 | 212 | 1,536 | 1,299 | |||||||||||
Depreciation of property, plant and equipment | 129,168 | 1,126 | 2,151 | 132,445 | 134,759 | |||||||||||
Technical assistance (*) | 4,591 | 0 | 0 | 4,591 | 5,269 | |||||||||||
Directors and Supervisory Committee members' fees | 0 | 0 | 639 | 639 | 0 | |||||||||||
Tax on financial transactions | 0 | 0 | 18,063 | 18,063 | 14,166 | |||||||||||
Taxes and charges | 1,008 | 8,405 | 919 | 10,332 | 7,303 | |||||||||||
Other | 92 | 40 | 1,223 | 1,355 | 1,566 | |||||||||||
Total 2007 | 314,407 | 81,815 | 83,532 | 479,754 | - | |||||||||||
Total 2006 | 268,649 | 66,983 | 67,417 | - | 403,049 |
ACCOUNTS | 09.30.2007 | 09.30.2006 | 09.30.2005 | 09.30.2004 | 09.30.2003 | |||||||||||
550,658 | 341,745 | 503,465 | 498,599 | 427,912 | ||||||||||||
3,263,815 | 3,065,654 | 2,999,657 | 3,007,920 | 3,040,237 | ||||||||||||
Total Assets | 3,814,473 | 3,407,399 | 3,503,122 | 3,506,519 | 3,468,149 | |||||||||||
Current Liabilities | 518,451 | 403,839 | 1,949,226 | 1,892,834 | 1,343,363 | |||||||||||
Non-Current Liabilities | 1,373,976 | 1,366,248 | 76,139 | 72,294 | 489,295 | |||||||||||
Total Liabilities | 1,892,427 | 1,770,087 | 2,025,365 | 1,965,128 | 1,832,658 | |||||||||||
Shareholders’ Equity | 1,922,046 | 1,637,312 | 1,477,757 | 1,541,391 | 1,635,491 | |||||||||||
Total Liabilities and Shareholders’ Equity | 3,814,473 | 3,407,399 | 3,503,122 | 3,506,519 | 3,468,149 |
ACCOUNTS | 09.30.2007 | 09.30.2006 | 09.30.2005 | 09.30.2004 | 09.30.2003 | |||||||||||
Net operating income | 350,844 | 30,406 | 515 | 35,969 | 51,046 | |||||||||||
(152,770 | ) | 172,338 | (55,001 | ) | (99,547 | ) | 184,724 | |||||||||
(21,335 | ) | (15,031 | ) | 5,358 | (11,855 | ) | (6,451 | ) | ||||||||
Income (loss) before taxes | 176,739 | 187,713 | (49,128 | ) | (75,433 | ) | 299,319 | |||||||||
Income tax | (106,816 | ) | 72,315 | 0 | 0 | 0 | ||||||||||
Net Income (Loss) for the Period | 69,923 | 260,028 | (49,128 | ) | (75,433 | ) | 229,319 |
CONCEPT | UNIT | 09.30.2007 | 09.30.2006 | 09.30.2005 | 09.30.2004 | 09.30.2003 | |||||||||||||
Sales of electricity (1) | GWh | 13,574 | 12,408 | 11,757 | 11,069 | 10,345 | |||||||||||||
Electricity purchases (1) | GWh | 15,376 | 13,977 | 13,254 | 12,572 | 11,922 |
RATIOS | 09.30.2007 | 09.30.2006 | 09.30.2005 | 09.30.2004 | 09.30.2003 | |||||||
Current | Current assets | 1.06 | 0.85 | 0.26 | 0.26 | 0.32 | ||||||
Current liabilities | ||||||||||||
Solvency | Shareholders’ Equity | 1.02 | 0.92 | 0.73 | 0.78 | 0.89 | ||||||
Total liabilities | ||||||||||||
Fixed assets | Non-current assets | 0.86 | 0.90 | 0.86 | 0.86 | 0.88 | ||||||
Total assets | ||||||||||||
Income (loss) before taxes | Income (Loss) before taxes | 9.54% | 13.63% | (3.22)% | (4.67)% | 16.31% | ||||||
Shareholders’ Equity excluding income (loss) for the period |
ROGELIO PAGANO | ||
Director |
a) | Our unqualified auditors’ report on the financial statements for the year ended December 31, 2006 was issued on February 21, 2007. |
b) | Our limited review report related to the nine-month period ended September 30, 2006 was issued on November 7, 2006 and was subject to the resolution of the uncertainties described in section a) of the Explanatory paragraph of such report. These uncertainties have been solved with the ratification of the Adjustment Agreement and the approval of the new electricity rate schedule, as it is described in Note 17 b). |
DELOITTE & Co. S.R.L. | | |
Daniel H. Recanatini | ||
(Partner) |
a) | Their unqualified report on the financial statements for the year ended December 31, 2006 dated February 21, 2007. |
b) | Their limited review report on the financial statements for the nine-month period ended September 30, 2006, dated November 7, 2006, which was subject to the resolution of the uncertainties described in the explanatory paragraph of such report. These uncertainties have been solved with the ratification of the Adjustment Agreement by the Federal Executive Power and the issuance of the new electricity rate schedule, as described in note 17 b). |
City of Buenos Aires, November 7, 2007. | ||
By the Supervisory Committee | | |
Javier Errecondo Member |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Empresa Distribuidora y Comercializadora Norte S.A.
By: /s/ Rogelio Pagano
Rogelio Pagano
Chief Financial Officer
Date: November 9, 2007