EDENOR S.A. |
Balance Sheets as of March 31, 2008 and December 31, 2007 Statements of Income for the three-month periods ended March 31, 2008 and 2007 Statements of Changes in Shareholders’ Equity for the three-month periods ended March 31, 2008 and 2007 Statements of Cash Flows for the three-month periods ended March 31, 2008 and 2007 Notes to the Financial Statements as of March 31, 2008 and 2007 |
CHAIRMAN: | Alejandro Macfarlane |
VICE CHAIRMAN: | Marcos Marcelo Mindlin |
DIRECTORS: | Damián Miguel Mindlin |
Gustavo Mariani | |
Luis Pablo Rogelio Pagano | |
Maximiliano Alejandro Fernandez | |
Alfredo Mac Laughlin (until April 15, 2008) | |
Ricardo Torres (since April 15, 2008) | |
Diego Martín Salaverri | |
Edgardo Alberto Volosín | |
Ignacio Raúl Chojo Ortiz | |
Rafael Mancuso | |
ALTERNATE DIRECTORS: | Jorge Grecco |
Javier Douer | |
Pablo Díaz | |
Ariel Schapira | |
Brian Henderson | |
Ricardo Sericano | |
Maia Chmielewski | |
Gabriel Cohen | |
Eduardo Maggi | |
Alejandro Mindlin | |
Carlos Florencio Correa Urquiza |
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 |
EMPRESA DISTRIBUIDORA Y COMERCIALIZADORA NORTE S.A. (EDENOR S.A.) |
2008 | 2007 | ||||||
CURRENT ASSETS | |||||||
Cash and banks | 8,222 | 3,459 | |||||
Investments (Exhibit D) | 108,805 | 97,739 | |||||
Trade receivables (Note 4) | 350,301 | 345,979 | |||||
Other receivables (Note 5) | 26,504 | 25,990 | |||||
Supplies | 16,339 | 23,174 | |||||
Total Current Assets | 510,171 | 496,341 | |||||
NON-CURRENT ASSETS | |||||||
Trade receivables (Note 4) | 91,998 | 100,300 | |||||
Other receivables (Note 5) | 133,657 | 144,107 | |||||
Investments in other companies (Exhibit C) | 390 | 390 | |||||
Supplies | 14,050 | 13,759 | |||||
Property, plant and equipment (Exhibit A) | 3,135,177 | 3,092,709 | |||||
Total Non-Current Assets | 3,375,272 | 3,351,265 | |||||
Total Assets | 3,885,443 | 3,847,606 |
2008 | 2007 | ||||||
CURRENT LIABILITIES | |||||||
Trade accounts payable (Note 6) | 274,564 | 316,152 | |||||
Loans (Note 7) | 70,759 | 29,290 | |||||
Salaries and social security taxes (Note 8) | 50,400 | 59,904 | |||||
Taxes (Note 9) | 94,644 | 84,641 | |||||
Other liabilities (Note 10) | 6,854 | 9,710 | |||||
Accrued litigation (Exhibit E) | 40,623 | 39,868 | |||||
Total Current Liabilities | 537,844 | 539,565 | |||||
NON-CURRENT LIABILITIES | |||||||
Trade accounts payable (Note 6) | 36,562 | 35,466 | |||||
Loans (Note 7) | 955,170 | 949,062 | |||||
Salaries and social security taxes (Note 8) | 26,898 | 24,694 | |||||
Other liabilities (Note 10) | 291,989 | 281,395 | |||||
Accrued litigation (Exhibit E) | 43,401 | 42,843 | |||||
Total Non-Current Liabilities | 1,354,020 | 1,333,460 | |||||
Total Liabilities | 1,891,864 | 1,873,025 | |||||
SHAREHOLDERS' EQUITY (as per related statements) | 1,993,579 | 1,974,581 | |||||
Total Liabilities and Shareholders' Equity | 3,885,443 | 3,847,606 |
EMPRESA DISTRIBUIDORA Y COMERCIALIZADORA NORTE S.A. (EDENOR S.A.) |
2008 | 2007 | ||||||
Net sales (Note 11) | 455,673 | 628,364 | |||||
Electric power purchases | (214,871 | ) | (214,331 | ) | |||
Gross margin | 240,802 | 414,033 | |||||
Transmission and distribution expenses (Exhibit H) | (117,411 | ) | (98,879 | ) | |||
Selling expenses (Exhibit H) | (27,508 | ) | (20,504 | ) | |||
Administrative expenses (Exhibit H) | (31,732 | ) | (26,282 | ) | |||
Net operating income | 64,151 | 268,368 | |||||
Financial income (expense) and holding gains (losses) | |||||||
Generated by assets | |||||||
Exchange difference | 984 | 67 | |||||
Interest | 2,524 | 1,541 | |||||
Holding results | (107 | ) | 28 | ||||
Generated by liabilities | |||||||
Financial expenses (*) | (2,213 | ) | (11,569 | ) | |||
Exchange difference | (6,873 | ) | (14,765 | ) | |||
Interest (**) | (18,891 | ) | (11,261 | ) | |||
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) | 3,778 | (41,212 | ) | ||||
Adjustment to present value of notes (Note 3.j) | (166 | ) | (15,062 | ) | |||
Other income (expense), net (Note 12) | (6,639 | ) | (6,393 | ) | |||
Income before taxes | 36,548 | 169,742 | |||||
Income tax (Note 3.m) | (17,550 | ) | (62,973 | ) | |||
Net income for the period | 18,998 | 106,769 | |||||
Earnings per common share | 0.021 | 0.128 |
(*) The breakdown of financial expenses is as follows: |
Expense related to the public offering of capital stock (Note 1) | 0 | (7,098 | ) | ||||
Financial assistance Electricidad Argentina S.A. (Note 15) | (1,579 | ) | (1,598 | ) | |||
Withholding income tax and others financial expenses | (634 | ) | (2,873 | ) | |||
Total | (2,213 | ) | (11,569 | ) |
2008 | 2007 | ||||||||||||||||||||||||
Shareholders' contributions | Retained earnings | ||||||||||||||||||||||||
Nominal | Adjustment to | Additional | Appropriated Retained Earnings | Unappropriated Retained Earnings | |||||||||||||||||||||
Value (Note 16.a) | Capital | Paid-in Capital | Total | Legal Reserve | Accumulated Deficit | Total | Total | ||||||||||||||||||
Balance at beginning of year | 906,455 | 996,489 | 106,928 | 2,009,872 | 53,320 | (88,611 | ) | 1,974,581 | 1,670,350 | ||||||||||||||||
Net income for the period | - | - | - | - | - | 18,998 | 18,998 | 106,769 | |||||||||||||||||
Balance at end of period | 906,455 | 996,489 | 106,928 | 2,009,872 | 53,320 | (69,613 | ) | 1,993,579 | 1,777,119 |
EMPRESA DISTRIBUIDORA Y COMERCIALIZADORA NORTE S.A. (EDENOR S.A.) |
2008 | 2007 | ||||||
Changes in cash and cash equivalents | |||||||
Cash and cash equivalents at beginning of year (Note 18.a) | 101,198 | 32,673 | |||||
Cash and cash equivalents at end of period (Note 18.a) | 117,027 | 40,496 | |||||
Net increase in cash and cash equivalents | 15,829 | 7,823 | |||||
Reasons for changes in cash and cash equivalents | |||||||
Cash flows from operating activities | |||||||
Net income for the period | 18,998 | 106,769 | |||||
Adjustments to reconcile net income to net cash flows provided by operating activities | |||||||
Depreciation of property, plant and equipment (Exhibit A) | 41,665 | 44,444 | |||||
Retirement of property, plant and equipment (Exhibit A) | 0 | 122 | |||||
Adjustment to present value of notes (Note 3.j) | 166 | 15,062 | |||||
Exchange difference, interest and penalties on loans | 15,755 | 25,201 | |||||
Income tax (Note 3.m) | 17,550 | 62,973 | |||||
Increase in trade receivables due to the unbilled portion of the retroactive tariff increase | 0 | (211,396 | ) | ||||
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) | (3,778 | ) | 41,212 | ||||
Changes in assets and liabilities: | |||||||
Decrease (Increase) in trade receivables (net of the unbilled portion of the retroactive tariff increase) | 7,159 | (8,616 | ) | ||||
Net (increase) decrease in other receivables | (7,614 | ) | 3,841 | ||||
Decrease (Increase) in supplies | 6,544 | (1,075 | ) | ||||
Decrease in trade accounts payable | (40,492 | ) | (40,711 | ) | |||
Decrease in salaries and social security taxes | (7,300 | ) | (8,558 | ) | |||
Increase in taxes | 10,003 | 16,688 | |||||
Increase in other liabilities | 7,738 | 1,479 | |||||
Net increase in accrued litigation | 1,313 | 2,635 | |||||
Financial interest collected (Note 18.b) | 599 | 755 | |||||
Net cash flows provided by operating activities | 68,306 | 50,825 | |||||
Cash flows from investing activities | |||||||
Additions of property, plant and equipment | (84,133 | ) | (43,002 | ) | |||
Net cash flows (used) in investing activities | (84,133 | ) | (43,002 | ) | |||
Cash flows from financing activities | |||||||
Increase in loans (Note 7) | 31,656 | 0 | |||||
Net cash flows provided by financing activities | 31,656 | 0 | |||||
Net Increase in Cash and Cash Equivalents | 15,829 | 7,823 |
a) | 51% of the Company’s capital stock is held by EASA, 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. |
b) | 48.78% of the Company’s capital stock, represented by 442,210,356 Class “B” shares is traded in the market, |
c) | 0.22% 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. |
Year | Effect on deferred tax result Nominal value |
2008 (nine months) | 20,656 |
2009 | 26,396 |
2010 | 25,011 |
2011 | 24,084 |
2012 – 2016 | 106,866 |
2017 – 2021 | 88,058 |
Remainder | 140,582 |
Total | 431,653 |
2008 | 2007 | ||||||
Cost | 327 | 281 | |||||
Interest | 995 | 719 | |||||
Amortization of recognized net actuarial loss | 190 | 190 | |||||
1,512 | 1,190 |
2008 | 2007 | ||||||
Payment commitments under the personnel benefits plan at the beginning of the year | 19,083 | 15,352 | |||||
Cost | 327 | 1,125 | |||||
Interest | 995 | 2,874 | |||||
Actuarial loss | 0 | 761 | |||||
Benefits paid to participating employees | (59 | ) | (1,029 | ) | |||
Payment commitments under the personnel benefits plan at the end of the period/year | 20,346 | 19,083 | |||||
Payment commitments under the personnel benefits plan at the end of the period/year | 20,346 | 19,083 | |||||
Unrecognized net actuarial loss | (5,526 | ) | (5,716 | ) | |||
Total personnel benefits plan (pension plan) (Note 8) | 14,820 | 13,367 |
Years of retirement | |
2008 | 2,421 |
2009 | 2,553 |
2010 | 3,054 |
2011 | 3,389 |
2012 | 4,070 |
2013-2017 | 14,787 |
2008 | ||||
Cost | 1,306 | |||
Interest | 3,977 | |||
Amortization of recognized net actuarial loss | 761 | |||
6,044 |
Payment commitments under the personnel benefits plan at the end of the period | 19,083 | |||
Effect of 1% increase | 18,050 | |||
Effect of 1% decrease | 20,261 |
2008 | ||||
Discount rate | 21 | % | ||
Salary increase | 20 | % | ||
Inflation | 14 | % |
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), which have been valued at the prevailing market price as of 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, except for those indicated in the following paragraph; |
- | Services rendered but unbilled as of the end of the period ended March 31, 2008, 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 10.5% 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 h) 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) | Supplies: |
f) | Non-current investments: |
g) | Property, plant and equipment: |
h) | Allowances (Exhibit E): |
- | Deducted from current assets: |
· | for doubtful accounts: it has been recorded to adjust the valuation of trade receivables and other 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. |
Additionally, for purposes of calculating the amount of the allowance, the Company has considered a detailed analysis of accounts receivable in litigation. |
- | Deducted from non-current assets: |
· | for impairment of value of deferred tax assets: as of December 31, 2007 the Company had partially impaired the deferred tax asset with a valuation allowance. (Note 3.m), whereas as of March 31, 2008 the allowance was used to offset the deferred tax asset due to the fact that the tax loss generated in the 2002 fiscal year became statute-barred. |
i) | Accrued litigation: |
1) | The Company is a party to certain lawsuits and administrative proceedings in several courts and government agencies, including certain tax contingencies arising from the ordinary course of business. The Argentine tax authority (“AFIP”) has challenged certain income tax deductions related to allowances for doubtful accounts made by the Company on its income tax returns for fiscal years 1996, 1997 and 1998, and has assessed additional taxes for approximately 9,300. Tax related contingencies are subject to interest charges and, in some cases, to fines. This matter is currently on appeal to the tax court. During the appeal process, payment of such claim has been suspended. |
2) | The Company is also a party to civil and labor lawsuits in the ordinary course of business. At the end of each period/year, management evaluates these contingencies and records an accrual for related potential losses when: (i) payment thereof is probable, and (ii) the amount can be reasonably estimated. The Company estimates that any loss in excess of amounts accrued in relation to the above matters will not have a material adverse effect on the Company’s result of operations or its financial position. |
j) | Loans: |
k) | Shareholders' equity accounts: |
l) | Statement of income accounts: |
- | The accounts that accumulate monetary transactions 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 adjustment 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 is stated at nominal value. |
m) | Income tax and tax on minimum presumed income: |
2008 | 2007 | ||||||
Income for the period before taxes | 36,548 | 169,742 | |||||
Applicable tax rate | 35 | % | 35 | % | |||
Income for the period at the applicable tax rate | 12,792 | 59,410 | |||||
Permanent differences | |||||||
Adjustment for inflation of property, plant and equipment | 7,220 | 8,099 | |||||
Accruals and other | (2,462 | ) | (3,997 | ) | |||
Total income tax charge for the period before the allowance for impairment of value of deferred tax assets | 17,550 | 63,512 | |||||
Increase (Decrease) in the allowance for impairment of value of deferred tax assets | 0 | (539 | ) | ||||
Total income tax charge for the period | 17,550 | 62,973 | |||||
Variation between deferred assets(liabilities) charged to income | 4,311 | (62,973 | ) | ||||
Income tax for the period | 21,861 | 0 |
Allowance for impairment of value of deferred tax assets | |||||||
Balance at beginning of year | 34,482 | 32,261 | |||||
Use of the allowance | (34,482 | ) | 0 | ||||
Increase (Decrease) in the allowance for impairment of value of deferred tax assets | 0 | (539 | ) | ||||
Balance at end of period | 0 | 31,722 |
2008 | 2007 | ||||||
Non-current deferred tax assets | |||||||
Tax-loss carry forward | 8,316 | 42,798 | |||||
Allowance for doubtful accounts | 13,711 | 12,906 | |||||
Accruals | 47,901 | 45,926 | |||||
Adjustment to present value of the retroactive tariff increase arising from the application of the new electricity rate schedule and other trade receivables | 9,044 | 10,366 | |||||
Supplies valuation | 34 | 50 | |||||
79,006 | 112,046 | ||||||
Non-current deferred tax liabilities | |||||||
Current investments | 0 | (250 | ) | ||||
Other current receivables | (4,036 | ) | 0 | ||||
Property, plant and equipment | (16,045 | ) | (22,642 | ) | |||
Adjustment to present value of the notes | (12,417 | ) | (12,475 | ) | |||
(32,498 | ) | (35,367 | ) | ||||
Net deferred tax assets before allowance for impairment of value of deferred tax assets | 46,508 | 76,679 | |||||
Allowance for impairment of value of net deferred tax assets | 0 | (34,482 | ) | ||||
Net deferred tax assets | 46,508 | 42,197 |
Amount | Tax rate 35% | Year expiring | ||||||||
Tax loss carry forward 2005 | 23,761 | 8,316 | 2010 |
n) | Operating leases: |
2008 | 2007 | ||||||
2008 | 3,589 | 2,052 | |||||
2009 | 3,981 | 179 | |||||
2010 | 4,645 | 147 | |||||
2011 | 1,731 | 147 | |||||
2012 | 147 | 147 | |||||
2013 | 147 | 147 | |||||
Total minimum lease payments | 14,240 | 2,819 |
2008 | 2007 | ||||||
Total lease expenses | 1,054 | 714 |
2008 | 2007 | ||||||
2008 | 7,780 | 9,680 | |||||
2009 | 7,655 | 7,577 | |||||
2010 | 14 | 14 | |||||
2011 | 9 | 9 | |||||
2012 | 9 | 9 | |||||
Total minimum lease collections | 15,467 | 17,289 |
2008 | 2007 | ||||||
Total lease income (Note 11) | 2,846 | 2,532 |
o) | Labor cost liabilities and early retirements payable: |
- | for supplementary benefits of 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 March 31, 2008 and December 31, 2007, the accrual for such bonuses amounted to 5,924 and 5,684 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 March 31, 2008 and December 31, 2007, the accrual for these benefits amounted to 14,820 and 13,367 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) | Foreign currency translation/ transactions: |
4. | TRADE RECEIVABLES |
2008 | 2007 | ||||||
Current: | |||||||
Receivables from sales of electricity: | |||||||
Billed | 184,137 | 177,263 | |||||
Unbilled | |||||||
Sales of electricity | 124,618 | 123,641 | |||||
Retroactive tariff increase arising from the application of the new electricity rate schedule (Note 17.b item d) | 42,864 | 44,101 | |||||
Adjustment to present value of the retroactive tariff increase arising from the application of the new electricity rate schedule (Note 3.c) | (2,531 | ) | (2,526 | ) | |||
Framework Agreement (Notes 3.c and 13) | 4,579 | 4,579 | |||||
Framework Agreement - Payment plan agreement with the Province of Bs. As. (Note 13) | 13,557 | 13,557 | |||||
Adjustment to present value of the Framework Agreement - Payment plan agreement with the Province of Bs. As. (Note 3.c) | (50 | ) | (212 | ) | |||
National Fund of Electricity (Note 17.a) | 3,299 | 3,036 | |||||
Specific fee payable for the expansion of the network, transportation and others (Note 17.b) | 12,571 | 12,628 | |||||
In litigation | 9,177 | 9,918 | |||||
Subtotal | 392,221 | 385,985 | |||||
Less: | |||||||
Allowance for doubtful accounts (Exhibit E) | (41,920 | ) | (40,006 | ) | |||
350,301 | 345,979 |
2008 | 2007 | ||||||
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) | 115,257 | 127,180 | |||||
Adjustment to present value of the retroactive tariff increase arising from the application of the new electricity rate schedule (Note 3.c) | (23,259 | ) | (26,880 | ) | |||
91,998 | 100,300 |
5. | OTHER RECEIVABLES |
2008 | 2007 | ||||||
Current: | |||||||
Prepaid expenses (1) | 1,756 | 1,910 | |||||
Advances to suppliers | 1,467 | 224 | |||||
Advances to personnel | 3,454 | 685 | |||||
Related parties (Note 15) | 448 | 448 | |||||
Prepaid Technical Assistance Services (2) | 11,642 | 15,182 | |||||
Preliminary attachments - ENRE - (Note 17.a) | 59 | 59 | |||||
Other debtors (3) | 7,262 | 7,271 | |||||
Allowance for other doubtful accounts (Exhibit E) | (2,573 | ) | (2,900 | ) | |||
Other | 2,989 | 3,111 | |||||
26,504 | 25,990 | ||||||
Non-current: | |||||||
Tax credit on minimum presumed income (Note 3.m) (4) | 87,149 | 101,910 | |||||
Net deferred tax assets (Note 3.m) | 46,508 | 76,679 | |||||
Allowance for impairment of value of deferred tax assets (Exhibit E) | 0 | (34,482 | ) | ||||
133,657 | 144,107 |
(1) | Includes 103 in foreign currency (Exhibit G) as of March 31, 2008. |
(2) | In foreign currency (Exhibit G). |
(3) | Includes 777 and 769 in foreign currency (Exhibit G) as of March 31, 2008 and December 31, 2007, respectively. |
(4) | Net of the income tax for the period (Note 3.m) for 21,861 as of March 31, 2008. |
6. | TRADE ACCOUNTS PAYABLE |
2008 | 2007 | ||||||
Current: | |||||||
Payables for purchase of electricity and other purchases (1) | 185,398 | 221,098 | |||||
Unbilled electric power purchases | 76,722 | 82,191 | |||||
Customer contributions (Note 3.p) | 11,165 | 11,759 | |||||
Other | 1,279 | 1,104 | |||||
274,564 | 316,152 | ||||||
Non-Current: | |||||||
Customer deposits (Note 3.p) | 36,562 | 35,466 |
(1) | Includes 17,606 and 34,633 in foreign currency (Exhibit G) as of March 31, 2008 and December 31, 2007, respectively. Also, includes balances with SACME S.A. for 681 and 757 as of March 31, 2008 and December 31, 2007, respectively; balances with Errecondo, Salaverri, Dellatorre, Gonzalez & Burgio for 74 as of December 31, 2007, and balances with Electricidad Argentina S.A. for 22 as of March 31, 2008 (Note 15). |
7. | LOANS |
2008 | 2007 | ||||||
Current: | |||||||
Financial loans: | |||||||
Principal (1) | 31,656 | 12,200 | |||||
Interest (2) | 303 | 16 | |||||
Subtotal | 31,959 | 12,216 | |||||
Corporate Notes: | |||||||
In foreign currency (Exhibit G and Note 14) | |||||||
Interest (Note 14) | 38,800 | 17,074 | |||||
70,759 | 29,290 |
2008 | 2007 | ||||||
Non-current: | |||||||
Corporate Notes: | |||||||
In foreign currency (Exhibit G and Note 14) | |||||||
Fixed Rate Notes – Class 7 | 696,960 | 692,779 | |||||
Fixed and Incremental Rate Par Notes – Class A | 229,640 | 228,262 | |||||
Fixed and Incremental Rate Par Notes – Class B | 23,953 | 23,810 | |||||
Floating Rate Par Notes – Class A | 40,094 | 39,854 | |||||
Subtotal | 990,647 | 984,705 | |||||
Adjustment to present value of notes (Note 3.j) | (35,477 | ) | (35,643 | ) | |||
Corporate Notes at present value | 955,170 | 949,062 |
(1) | Includes 1,656 in foreign currency (Exhibit G) as of March 31, 2008. |
(2) | Includes 20 in foreign currency (Exhibit G) as of March 31, 2008. |
8. | SALARIES AND SOCIAL SECURITY TAXES |
2008 | 2007 | ||||||
Current: | |||||||
Salaries payable and accruals | 39,776 | 51,870 | |||||
Social Security (ANSES) | 8,225 | 5,640 | |||||
Early retirements payable (Note 3.o) | 2,399 | 2,394 | |||||
50,400 | 59,904 | ||||||
Non-Current (Note 3.o): | |||||||
Other personnel benefits (Note 2) | 14,820 | 13,367 | |||||
Seniority-based bonus | 5,924 | 5,684 | |||||
Early retirements payable | 6,154 | 5,643 | |||||
26,898 | 24,694 |
9. | TAXES |
2008 | 2007 | ||||||
Current: | |||||||
Provincial, municipal and federal contributions and taxes | 27,612 | 25,212 | |||||
Value Added Tax (VAT) | 28,060 | 22,411 | |||||
Tax on minimum presumed income | 9,037 | 6,786 | |||||
Withholdings | 4,166 | 5,077 | |||||
Municipal taxes | 21,243 | 20,823 | |||||
Other | 4,526 | 4,332 | |||||
94,644 | 84,641 |
10. | OTHER LIABILITIES |
2008 | 2007 | ||||||
Current: | |||||||
Capital expenditures fund – CAMMESA (Note 17.b) | 1,660 | 1,931 | |||||
Fees related to the initial public offering of capital stock (1) | 0 | 818 | |||||
Fees related to the issuance of Corporate Notes (2) (Exhibit G and Note 14.b) | 1,446 | 4,176 | |||||
Program for the rational use of electric power (PUREE) | 91 | 91 | |||||
Other (3) | 3,657 | 2,694 | |||||
6,854 | 9,710 | ||||||
Non-current: | |||||||
ENRE penalties (Note 17 a and b) | 291,989 | 281,395 |
(1) | In foreign currency (Exhibit G). |
(2) | In foreign currency (Exhibit G). Includes balances with Errecondo, Salaverri, Dellatorre, Gonzalez & Burgio for 315 and 628 as of March 31, 2008 and December 31, 2007, respectively (Note 15). |
(3) | Includes 3,164 and 1,855 in foreign currency (Exhibit G) as of March 31, 2008 and December 31, 2007, respectively. |
11. | NET SALES |
2008 | 2007 | ||||||
Sales of electricity (1) | 447,547 | 620,526 | |||||
Late payment charges | 3,908 | 4,269 | |||||
Pole leases (Note 3.n) | 2,846 | 2,532 | |||||
Connection charges | 1,031 | 757 | |||||
Reconnection charges | 341 | 280 | |||||
455,673 | 628,364 |
12. | OTHER INCOME (EXPENSE) – NET |
2008 | 2007 | ||||||
Non-operating income | 157 | 87 | |||||
Commissions on municipal taxes collection | 450 | 422 | |||||
Net expense from technical services | (1,104 | ) | (329 | ) | |||
Voluntary retirements and terminations | (2,131 | ) | (2,085 | ) | |||
Severance paid | (1,644 | ) | (1,326 | ) | |||
Accrued litigation | (3,000 | ) | (3,000 | ) | |||
Disposal of property, plant and equipment | 0 | (122 | ) | ||||
Other | 633 | (40 | ) | ||||
(6,639 | ) | (6,393 | ) |
13. | FRAMEWORK AGREEMENT |
14. | CORPORATE NOTES PROGRAM |
a) | 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 purchase and redemption in thousands of us$ | Post-purchase and redemption debt structure in thousands of us$ | Balance as of March 31, 2008 (Note 7) in thousands of pesos | |||||||||||
Fixed Rate Par Note | A | 73,485 | (998 | ) | 72,487 | 229,640 | ||||||||||
B | 50,289 | (42,728 | ) | 7,561 | 23,953 | |||||||||||
Floating Rate Par Note | A | 12,656 | 0 | 12,656 | 40,094 | |||||||||||
Discount Note | A | 152,322 | (152,322 | ) | 0 | 0 | ||||||||||
B | 87,678 | (87,678 | ) | 0 | 0 | |||||||||||
Total | 376,430 | (283,726 | ) | 92,704 | 293,687 |
Year | Amount in thousands of US$ | |||
2011 | 8,638 | |||
2012 | 8,638 | |||
2013 | 8,638 | |||
2014 | 8,638 | |||
2015 | 8,638 | |||
2016 | 40,654 | |||
2017 | 1,266 | |||
2018 | 1,266 | |||
2019 | 6,328 | |||
92,704 |
b) | CORPORATE NOTES PROGRAM |
(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. |
15. | BALANCES AND TRANSACTIONS WITH COMPANIES ART. 33 LAW N°19550 AND RELATED PARTIES |
2008 | 2007 | ||||||
Other receivables (Note 5) | |||||||
SACME S.A. | 448 | 448 | |||||
Total | 448 | 448 | |||||
Trade accounts payable (Note 6) | |||||||
Electricidad Argentina S.A. | (22 | ) | 0 | ||||
Errecondo, Salaverri, Dellatorre, Gonzalez & Burgio | 0 | (74 | ) | ||||
SACME S.A. | (681 | ) | (757 | ) | |||
Total | (703 | ) | (831 | ) | |||
Other liabilities (Note 10) | |||||||
Errecondo, Salaverri, Dellatorre, Gonzalez & Burgio | (315 | ) | (628 | ) | |||
Total | (315 | ) | (628 | ) |
2008 | 2007 | ||||||
Other income | |||||||
Electricidad Argentina S.A. | 2 | 3 | |||||
Total | 2 | 3 | |||||
Expenses from services | |||||||
SACME S.A. | (1,020 | ) | (762) | ) | |||
Electricidad Argentina S.A. | (54 | ) | 0 | ||||
Errecondo, Salaverri, Dellatorre, Gonzalez & Burgio | (22 | ) | 0 | ||||
Total | (1,096 | ) | (762 | ) | |||
Financial expenses, interest and penalties | |||||||
Electricidad Argentina S.A. | (1,579 | ) | (1,598 | ) | |||
Errecondo, Salaverri, Dellatorre, Gonzalez & Burgio | (160 | ) | (1,406 | ) | |||
Total | (1,739 | ) | (3,004 | ) |
16. | CAPITAL STOCK |
17. | REGULATORY FRAMEWORK |
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. |
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 be 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; |
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 No. 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 March 31, 2008 amounts to 16,224. This amount is net of the amounts transferred to CAMMESA for 26,676; |
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 March 31, 2008 | As of December 31, 2007 | As of March 31, 2007 | ||||||||
Cash and Banks | 8,222 | 3,459 | 1,660 | |||||||
Time deposits | 37,872 | 12,087 | 1,396 | |||||||
Money market funds | 0 | 37,440 | ||||||||
Notes receivable | 70,933 | 85,652 | 0 | |||||||
Total cash and cash equivalents in the Statement of Cash Flows | 117,027 | 101,198 | 40,496 |
b) | Interest paid and collected: |
For the three-month periods ended March 31, | |||||||
2008 | 2007 | ||||||
Interest paid during the period | 0 | 0 | |||||
Interest collected during the period | 599 | 755 |
19. | INSURANCE COVERAGE |
Risk covered | Amount insured | ||||||
Comprehensive (1) | US$ | 417,516,597 | |||||
Mandatory life insurance | $ | 17,570,250 | |||||
Theft of securities | US$ | 100,000 | |||||
Vehicles (theft, third party liability and damages) | $ | 8,083,500 | |||||
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. | BREAKDOWN OF TEMPORARY INVESTMENTS, RECEIVABLES AND LIABILITIES BY COLLECTION AND PAYMENT TERMS |
Term | Investments | Receivables | Loans | Other payables | |||||||||
(1) | (2) | ||||||||||||
With no explicit due date | 0 | 0 | 0 | 291,989 | |||||||||
With due date | |||||||||||||
Past due: | |||||||||||||
Up to three months | 0 | 58,586 | 0 | 0 | |||||||||
From three to six months | 0 | 6,236 | 0 | 0 | |||||||||
From six to nine months | 0 | 9,384 | 0 | 0 | |||||||||
From nine to twelve months | 0 | 5,509 | 0 | 0 | |||||||||
Over one year | 0 | 99,112 | 0 | 0 | |||||||||
Total past due | 0 | 178,827 | 0 | 0 |
To become due: | |||||||||||||
Up to three months | 108,805 | 234,669 | 70,759 | 402,758 | |||||||||
From three to six months | 0 | 3,894 | 0 | 14,408 | |||||||||
From six to nine months | 0 | 3,899 | 0 | 4,648 | |||||||||
From nine to twelve months | 0 | 9 | 0 | 4,648 | |||||||||
Over one year | 0 | 225,655 | 955,170 | 63,460 | |||||||||
Total to become due | 108,805 | 468,126 | 1,025,929 | 489,922 | |||||||||
Total with due date | 108,805 | 646,953 | 1,025,929 | 489,922 | |||||||||
Total | 108,805 | 646,953 | 1,025,929 | 781,911 |
(1) | Excludes allowances |
(2) | Comprises total liabilities except accrued litigation and debt notes. |
24. | SUBSEQUENT EVENTS |
a) | Absorption of accumulated deficit: |
b) | Agreement for the provision of technical advisory services with Electricidad Argentina S.A. (controlling company): |
25. | FINANCIAL STATEMENTS TRANSLATION INTO ENGLISH LANGUAGE |
EMPRESA DISTRIBUIDORA Y COMERCIALIZADORA NORTE S.A. (EDENOR S.A.) |
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 2008 | book value 2007 | |||||||||||||||||||||||||
FACILITIES IN SERVICE | |||||||||||||||||||||||||||||||||||||
Substations | 872,565 | 0 | 0 | 843 | 873,408 | 310,167 | 0 | 6,529 | 3 - 4 | % | 316,696 | 556,712 | 562,398 | ||||||||||||||||||||||||
High voltage networks | 381,906 | 0 | 0 | 0 | 381,906 | 133,599 | 0 | 2,779 | 3 - 4 | % | 136,378 | 245,528 | 248,307 | ||||||||||||||||||||||||
Medium voltage networks | 773,928 | 0 | 0 | 4,155 | 778,083 | 299,515 | 0 | 6,089 | 3 - 4 | % | 305,604 | 472,479 | 474,413 | ||||||||||||||||||||||||
Low voltage networks | 1,658,143 | 0 | 0 | 2,092 | 1,660,235 | 936,726 | 0 | 12,857 | 4 - 5 | % | 949,583 | 710,652 | 721,417 | ||||||||||||||||||||||||
Transformation chambers and platforms | 491,159 | 0 | 0 | 3,268 | 494,427 | 191,191 | 0 | 4,003 | 3 - 4 | % | 195,194 | 299,233 | 299,968 | ||||||||||||||||||||||||
Meters | 583,370 | 0 | 0 | 7,536 | 590,906 | 235,166 | 0 | 6,237 | 4 - 5 | % | 241,403 | 349,503 | 348,204 | ||||||||||||||||||||||||
Buildings | 77,579 | 0 | 0 | 0 | 77,579 | 21,053 | 0 | 250 | 2 - 3 | % | 21,303 | 56,276 | 56,526 | ||||||||||||||||||||||||
Communications network and facilities | 84,223 | 0 | 0 | 0 | 84,223 | 52,600 | 0 | 1,056 | 4 - 5 | % | 53,656 | 30,567 | 31,623 | ||||||||||||||||||||||||
Total facilities in service | 4,922,873 | 0 | 0 | 17,894 | 4,940,767 | 2,180,017 | 0 | 39,800 | 2,219,817 | 2,720,950 | 2,742,856 | ||||||||||||||||||||||||||
FURNITURE, TOOLS AND EQUIPMENT | |||||||||||||||||||||||||||||||||||||
Furniture, equipment and software projects | 168,208 | 178 | 0 | 0 | 168,386 | 158,029 | 0 | 1,544 | 12 - 13 | % | 159,573 | 8,813 | 10,179 | ||||||||||||||||||||||||
Tools and other | 45,179 | 14 | 0 | 0 | 45,193 | 42,448 | 0 | 190 | 10 - 11 | % | 42,638 | 2,555 | 2,731 | ||||||||||||||||||||||||
Transportation equipment | 15,366 | 0 | 0 | 0 | 15,366 | 13,782 | 0 | 131 | 20 | % | 13,913 | 1,453 | 1,584 | ||||||||||||||||||||||||
Total furniture, tools and equipment | 228,753 | 192 | 0 | 0 | 228,945 | 214,259 | 0 | 1,865 | 216,124 | 12,821 | 14,494 | ||||||||||||||||||||||||||
Total assets subject to depreciation | 5,151,626 | 192 | 0 | 17,894 | 5,169,712 | 2,394,276 | 0 | 41,665 | 2,435,941 | 2,733,771 | 2,757,350 | ||||||||||||||||||||||||||
CONSTRUCTION IN PROCESS | |||||||||||||||||||||||||||||||||||||
Transmission | 152,578 | 24,216 | 0 | (843 | ) | 175,951 | 0 | 0 | 0 | - | 0 | 175,951 | 152,578 | ||||||||||||||||||||||||
Distribution and other | 182,781 | 59,725 | 0 | (17,051 | ) | 225,455 | 0 | 0 | 0 | - | 0 | 225,455 | 182,781 | ||||||||||||||||||||||||
Total construction in process | 335,359 | 83,941 | 0 | (17,894 | ) | 401,406 | 0 | 0 | 0 | 0 | 401,406 | 335,359 | |||||||||||||||||||||||||
Total 2008 | 5,486,985 | 84,133 | 0 | 0 | 5,571,118 | 2,394,276 | 0 | 41,665 | 2,435,941 | 3,135,177 | - | ||||||||||||||||||||||||||
Total 2007 | 5,146,176 | 342,749 | (1,940) | 0 | 5,486,985 | 2,220,754 | (835) | 174,357 | 2,394,276 | - | 3,092,709 |
EMPRESA DISTRIBUIDORA Y COMERCIALIZADORA NORTE S.A. (EDENOR S.A.) |
Information on the Issuer | ||||||||||||||||||||||||||||||||||||||||
Last financial statements issued | % interest | |||||||||||||||||||||||||||||||||||||||
Name and features of securities | Class | Face value | Number | Adjusted cost | Value on equity method | Net book value 2008 | Main activity | Date | Capital | Income for the year | Equity | in capital stock | Net book value 2007 | |||||||||||||||||||||||||||
NON-CURRENT INVESTMENTS | ||||||||||||||||||||||||||||||||||||||||
Art. 33 Law No. 19,550 -Companies- | ||||||||||||||||||||||||||||||||||||||||
Related Company: | ||||||||||||||||||||||||||||||||||||||||
SACME S.A. | common non-endorsable | $ | 1 | 6,000 | 15 | 390 | 390 | Electric power services | 12/31/2007 | 28 | 24 | 780 | 50 | 390 | ||||||||||||||||||||||||||
Total | 390 | 390 |
Net book value | |||||||
MAIN ACCOUNT | 2008 | 2007 | |||||
CURRENT INVESTMENTS | |||||||
Time deposits | |||||||
. in foreign currency (Exhibit G) | 15,649 | 0 | |||||
. in local currency | 22,223 | 12,087 | |||||
Notes receivable (Commercial Paper) | |||||||
. in foreign currency (Exhibit G) | 70,933 | 85,652 | |||||
Total | 108,805 | 97,739 |
EMPRESA DISTRIBUIDORA Y COMERCIALIZADORA NORTE S.A. (EDENOR S.A.) |
2008 | 2007 | |||||||||||||||
MAIN ACCOUNT | At beginning of year | Additions | Retirements | At end of period | At end of year | |||||||||||
Deducted from current assets | ||||||||||||||||
For doubtful accounts | 40,006 | 3,152 | (1,238 | ) | 41,920 | 40,006 | ||||||||||
For other doubtful accounts | 2,900 | 0 | (327 | ) | 2,573 | 2,900 | ||||||||||
Deducted from non-current assets | ||||||||||||||||
For impairment of value of deferred tax assets | 34,482 | 0 | (34,482 | ) | 0 | 34,482 | ||||||||||
Included in current liabilities | ||||||||||||||||
Accrued litigation | 39,868 | 3,000 | (2,245 | ) | 40,623 | 39,868 | ||||||||||
Included in non-current liabilities | ||||||||||||||||
Accrued litigation | 42,843 | 558 | 0 | 43,401 | 42,843 |
EMPRESA DISTRIBUIDORA Y COMERCIALIZADORA NORTE S.A. (EDENOR S.A.) |
2008 | 2007 | |||||||||||||||
Account | Currency and amount (2) | Exchange rate (1) | Booked amount in thousands of pesos | Currency and amount (2) | Booked amount in thousands of pesos | |||||||||||
Current Assets | ||||||||||||||||
Cash and banks | US$ | 160,020 | 3.128 | 501 | US$ | 158,237 | 492 | |||||||||
ECU | 33,290 | 4.9454 | 165 | 30,649 | 140 | |||||||||||
Investments | ||||||||||||||||
Time deposits | US$ | 5,002,877 | 3.128 | 15,649 | US$ | 0 | 0 | |||||||||
Notes receivable | US$ | 22,676,790 | 3.128 | 70,933 | US$ | 27,549,541 | 85,652 | |||||||||
Other receivables | ||||||||||||||||
Prepaid expenses | US$ | 32,929 | 3.128 | 103 | US$ | 0 | 0 | |||||||||
Prepaid Technical Assistance Services | US$ | 3,721,725 | 3.128 | 11,642 | US$ | 4,883,086 | 15,182 | |||||||||
Other debtors | US$ | 248,351 | 3.128 | 777 | US$ | 247,433 | 769 | |||||||||
Total Current Assets | 99,770 | 102,235 | ||||||||||||||
Total Assets | 99,770 | 102,235 | ||||||||||||||
Current Liabilities | ||||||||||||||||
Trade accounts payable | US$ | 5,557,488 | 3.168 | 17,606 | US$ | 10,109,541 | 31,835 | |||||||||
ECU | 604,106 | 2,798 | ||||||||||||||
Loans | ||||||||||||||||
Notes | US$ | 12,247,622 | 3.168 | 38,800 | US$ | 5,421,935 | 17,074 | |||||||||
Financial | ECU | 334,690 | 5.0089 | 1,676 | ECU | 0 | 0 | |||||||||
Other liabilities | ||||||||||||||||
Fees related to the initial public offering of capital stock | US$ | 0 | 3.168 | 0 | US$ | 259,717 | 818 | |||||||||
Fees related to the issuance of corporate notes | US$ | 456,439 | 3.168 | 1,446 | US$ | 1,322,369 | 4,164 | |||||||||
ECU | 0 | 5.0089 | 0 | 2,650 | 12 | |||||||||||
Other | US$ | 935,058 | 3.168 | 2,962 | US$ | 397,527 | 1,252 | |||||||||
ECU | 40,383 | 5.0089 | 202 | ECU | 130,117 | 603 | ||||||||||
Total Current Liabilities | 62,692 | 58,556 | ||||||||||||||
Non-Current Liabilities | ||||||||||||||||
Loans notes | US$ | 312,704,116 | 3.168 | 990,647 | US$ | 312,704,116 | 984,705 | |||||||||
Total Non-Current Liabilities | 990,647 | 984,705 | ||||||||||||||
Total Liabilities | 1,053,339 | 1,043,261 |
(1) | Selling and buying exchange rate of Banco de la Nacion Argentina in effect at the end of the period/year. |
(2) | US$ = US Dollar; ECU = Euro |
EMPRESA DISTRIBUIDORA Y COMERCIALIZADORA NORTE S.A. (EDENOR S.A.) |
(stated in thousands of pesos) | 2008 | 2007 | ||||||||||||||
Description | Transmission and Distribution Expenses | Selling Expenses | Administrative Expenses | Total | Total | |||||||||||
Salaries and social security taxes | 33,538 | 6,502 | 9,625 | 49,665 | 40,223 | |||||||||||
Postage and telephone | 316 | 1,907 | 651 | 2,874 | 2,588 | |||||||||||
Bank commissions | 0 | 1,912 | 0 | 1,912 | 1,812 | |||||||||||
Allowance for doubtful accounts | 0 | 3,152 | 0 | 3,152 | 150 | |||||||||||
Supplies consumption | 10,380 | 237 | 367 | 10,984 | 8,185 | |||||||||||
Work by third parties | 25,434 | 8,231 | 4,403 | 38,068 | 23,046 | |||||||||||
Rent and insurance | 637 | 169 | 599 | 1,405 | 1,357 | |||||||||||
Security service | 1,098 | 35 | 185 | 1,318 | 1,081 | |||||||||||
Professional fees | 516 | 34 | 991 | 1,541 | 910 | |||||||||||
Computer services | 4 | 1,286 | 5,159 | 6,449 | 4,289 | |||||||||||
Advertising | 0 | 0 | 575 | 575 | 4,113 | |||||||||||
Reimbursements to personnel | 1,328 | 282 | 333 | 1,943 | 1,882 | |||||||||||
Temporary personnel | 43 | 278 | 90 | 411 | 557 | |||||||||||
Depreciation of property, plant and equipment | 40,268 | 530 | 867 | 41,665 | 44,444 | |||||||||||
Technical assistance | 3,844 | 0 | 0 | 3,844 | 1,863 | |||||||||||
Directors and Supervisory Committee members' fees | 0 | 0 | 718 | 718 | 252 | |||||||||||
Tax on financial transactions | 0 | 0 | 6,379 | 6,379 | 5,532 | |||||||||||
Taxes and charges | 0 | 2,951 | 491 | 3,442 | 2,948 | |||||||||||
Other | 5 | 2 | 299 | 306 | 433 | |||||||||||
Total 2008 | 117,411 | 27,508 | 31,732 | 176,651 | - | |||||||||||
Total 2007 | 98,879 | 20,504 | 26,282 | - | 145,665 |
ACCOUNTS | 03.31.2008 | 03.31.2007 | 03.31.2006 | 03.31.2005 | 03.31.2004 | |||||||||||
Current Assets | 393,192 | 629,341 | 509,291 | 464,671 | ||||||||||||
Non-Current Assets | 3,375,272 | 3,260,036 | 3,180,714 | 3,011,673 | 3,028,933 | |||||||||||
Total Assets | 3,885,443 | 3,653,228 | 3,810,055 | 3,520,964 | 3,493,604 | |||||||||||
Current Liabilities | 537,844 | 410,683 | 854,509 | 1,911,781 | 1,549,085 | |||||||||||
Non-Current Liabilities | 1,354,020 | 1,465,426 | 1,137,843 | 72,575 | 308,343 | |||||||||||
Total Liabilities | 1,891,864 | 1,876,109 | 1,992,352 | 1,984,356 | 1,857,428 | |||||||||||
Shareholders’ Equity | 1,993,579 | 1,777,119 | 1,817,703 | 1,536,608 | 1,636,176 | |||||||||||
Total Liabilities and Shareholders’ Equity | 3,885,443 | 3,653,228 | 3,810,055 | 3,520,964 | 3,493,604 |
ACCOUNTS | 03.31.2008 | 03.31.2007 | 03.31.2006 | 03.31.2005 | 03.31.2004 | |||||||||||
Net operating income | 64,151 | 268,368 | 11,869 | 11,927 | 14,692 | |||||||||||
(20,964 | ) | (92,233 | ) | 232,458 | 1,927 | 6,830 | ||||||||||
Other income (expense), net | (6,639 | ) | (6,393 | ) | 2,584 | (4,131 | ) | (2,170 | ) | |||||||
Income before taxes | 36,548 | 169,742 | 246,911 | 9,723 | 19,352 | |||||||||||
Income tax | (17,550 | ) | (62,973 | ) | 193,508 | 0 | 0 | |||||||||
Net income for the period | 18,998 | 106,769 | 440,419 | 9,723 | 19,352 |
CONCEPT | UNIT | 03.31.2008 | 03.31.2007 | 03.31.2006 | 03.31.2005 | 03.31.2004 | |||||||||||||
Sales of electricity (1) | GWh | 4,589 | 4,391 | 4,027 | 3,839 | 3,713 | |||||||||||||
Electricity purchases (1) | GWh | 5,049 | 4,845 | 4,465 | 4,267 | 4,149 |
RATIOS | 03.31.2008 | 03.31.2007 | 03.31.2006 | 03.31.2005 | 03.31.2004 | ||||||||||||||
Current | Current assets | 0.95 | 0.96 | 0.74 | 0.27 | 0.30 | |||||||||||||
Current liabilities | |||||||||||||||||||
Solvency | Shareholders’ Equity | 1.05 | 0.95 | 0.91 | 0.77 | 0.88 | |||||||||||||
Total liabilities | |||||||||||||||||||
Fixed assets | Non-current assets | 0.87 | 0.89 | 0.83 | 0.86 | 0.87 | |||||||||||||
Total assets | |||||||||||||||||||
Income (loss) before taxes | Income before taxes | 1.85 | % | 10.16 | % | 17.93 | % | 0.64 | % | 1.20 | % | ||||||||
Shareholders’ Equity excluding income for the period |
ALEJANDRO MACFARLANE |
Chairman |
1. | We have carried out a limited review of the balance sheet of Empresa Distribuidora y Comercializadora Norte Sociedad Anónima (Edenor S.A.) (hereinafter Edenor S.A.) at March 31, 2008, and the related statements of income, changes in shareholders’ equity and cash flows for the three-month period then ended with the complementary Notes 1 to 24 and Exhibits A, C, D, E, G and H. The preparation and issuance of these financial statements are the responsibility of the Company. |
2. | Our review was limited to the application of the procedures established by Technical Pronouncement No. 7 of the Argentine Federation of Professional Councils in Economic Sciences for limited reviews of financial statements for interim periods which consist mainly of the application of analytical procedures to the amounts disclosed in the financial statements and inquiries of Company staff responsible for the preparation of the information included in the financial statements and its subsequent analysis. This review is substantially less in scope than an audit, the purpose of which is to express an opinion on the financial statements under examination. Therefore, we do not express an opinion on the Company’s financial position, the results of operations, the changes in the shareholders’ equity and its cash flows. |
3. | The financial statements and the supplementary information detailed in point 1. are presented in comparative format with the information arising from: i) the financial statements and the supplementary information at December 31, 2007, on which another professional issued an unqualified audit report on February 26, 2008; and ii) the financial statements and the supplementary information at March 31, 2007 and for the three-month period then ended, on which another professional issued a limited review report without observations on May 9, 2007. |
4. | Based on our work and on the examination performed by another professional on the financial statements mentioned in point 3.i), we report that the financial statements of Edenor S.A. at March 31, 2008, detailed in point 1., prepared in accordance with accounting standards in force in the Autonomous City of Buenos Aires, consider all significant facts and circumstances of which we are aware, and we have no observations to make on them. |
5. | According to current legal regulations we inform that: |
c) | At March 31, 2008 the liabilities of Edenor S.A. accrued in favor of the Retirement and Survivors’ Benefit System according to the accounting records amounted to $ 6,872,691, which were not yet due at that date. |
PRICE WATERHOUSE & CO. S.R.L. (Partner) |
C.P.C.E.C.A.B.A T°1 - F°17 |
Daniel A. López Lado Public Accountant (UBA) C.P.C.E. Autonomous City of Buenos Aires T° 148 – F° 91 |
1 | As required by section 294, subsection 5, of Law No. 19,550, the Regulations of the National Securities Commission and the Buenos Aires Stock Exchange Regulations, we have performed a limited review of the balance sheet of Empresa Distribuidora y Comercializadora Norte Sociedad Anónima (hereinafter, “EDENOR” or the “Company”) as of March 31, 2008 and the related statements of income, changes in shareholders’ equity and cash flows for the three-month period then ended, with their notes 1 through 24 and supplemental exhibits A, C, D, E, G and H thereto. The preparation and issuance of the aforementioned financial statements are the responsibility of the Company’s management. |
2 | We have performed our review in accordance with current regulations, which require the application of the procedures established in Technical Resolution No. 7 of the Argentine Federation of Professional Councils in Economic Sciences for the limited review of financial statements for interim periods and that such review include verification of the consistency of the documents subject to the review with the information on corporate decisions laid down in the minutes and whether such decisions comply with the law and the Company's by-laws as to their formal and documentary aspects. In conducting our review, we have examined the work performed by the external auditors, Price Waterhouse & Co. S.R.L., who issued their unqualified limited review report on May 7, 2008. A limited review consists principally of applying analytical procedures to financial data and of making inquiries to Company personnel responsible for the preparation of the information included in the financial statements and their subsequent analysis. A limited review is substantially less in scope than an audit, the objective of which is to express an opinion on the financial statements taken as a whole. Accordingly, we do not express such an opinion. Our review did not include management, marketing or production criteria applied by the Company, which are the responsibility of the Board of Directors and the Shareholders’ Meeting. |
3 | The balances as of December 31, 2007, which have been included in the financial statements of EDENOR, are presented for comparative purposes and were examined by this Supervisory Committee, which issued its report dated February 26, 2008 expressing an unqualified opinion. |
4 | The balances as of March 31, 2007, which have been included in the financial statements of EDENOR, are presented for comparative purposes and were examined by other Supervisory Committee, which issued its report dated May 9, 2007 expressing an unqualified opinion. |
5. | Based on our review, performed with the scope mentioned in paragraph 2, we are able to report that the financial statements of EDENOR as of March 31, 2008, which have been prepared in accordance with accounting principles generally accepted in the City of Buenos Aires, take into account all material facts and circumstances of which we have become aware, and that we have no observations to make in relation thereto. |
6. | The provisions of section 294 of Law No. 19,550 have been complied with. |
By Supervisory Committee |
Dr. José Daniel Abelovich |
Member |
CONSIDERATION OF THE BALANCE SHEET, STATEMENT OF INCOME, STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY, STATEMENT OF CASH FLOWS, SUPPLEMENTARY DOCUMENTATION, INFORMATIVE SUMMARY, INFORMATION REQUIRED BY SECTION 68 OF THE BUENOS AIRES STOCK EXCHANGE REGULATIONS, REPORTS OF THE CERTIFYING ACCOUNTANT AND SUPERVISORY COMMITTEE, ALL OF THEM RELATING TO THE FIRST QUARTER OF THE CURRENT FISCAL YEAR ENDED MARCH 31, 2008
ABSTRACT OF THE PERTINENT PART OF BOARD OF DIRECTORS
MINUTES No. 288
MINUTES No. 288: In the City of Buenos Aires, on May 7, 2008, at 12.30 p.m., the undersigned Directors of EMPRESA DISTRIBUIDORA Y COMERCIALIZADORA NORTE S.A. (Edenor S.A.) (the “Company”), meet at 1025 Azopardo Street, 16th floor. Due to the absence of the Company President and Vice President, both of whom are abroad, and upon verifying that a quorum is present, Mr. Edgardo Volosín suggests that one of the Directors present be elected to preside over the meeting. Upon consideration and discussion, it is unanimously resolved that the meeting be presided over by Mr. Damián Mindlin. Immediately afterwards, Mr. Damián Mindlin calls the meeting to order and asks Directors to consider the [.....] THIRD ITEM of the Agenda: 3) CONSIDERATION OF THE BALANCE SHEET, STATEMENT OF INCOME, STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY, STATEMENT OF CASH FLOWS, SUPPLEMENTARY DOCUMENTATION, INFORMATIVE SUMMARY, INFORMATION REQUIRED BY SECTION 68 OF THE BUENOS AIRES STOCK EXCHANGE REGULATIONS, REPORTS OF THE CERTIFYING ACCOUNTANT AND SUPERVISORY COMMITTEE, ALL OF THEM RELATING TO THE FIRST QUARTER OF THE CURRENT FISCAL YEAR ENDED MARCH 31, 2008. The President once again gives the floor to Dr. Gustavo Gené, who proceeds to provide a detailed explanation of the principal figures of the draft financial statements for the first quarter of the current fiscal year ended March 31, 2008, which have been updated as of to date. In this regard, he reiterates that in the period of reference, the Company recorded a net income of AR$19,000,000, whose components were explained when dealing with the Performance Report. The Company’s shareholders’ equity as of the end of the three-month period amounted to AR$1,994,000,000. The variation in the shareholders’ equity for the period as compared to that recorded for the year ended December 31, 2007 is exclusively due to the profit recorded in the period. It must be pointed out that in spite of the profit recorded in the period, unappropriated retained earnings continue to be negative and amount to AR$70,000,000. Nevertheless, it must be taken into account that the Ordinary and Extraordinary General Meeting held on April 15, 2008, approved the absorption of the accumulated deficit with the Additional Paid-in Capital, for a total of
AR$88,600,000. As of the end of the period, the book value per share amounted to AR$2.20, as opposed to the AR$2.18 recorded by the end of the 2007 fiscal year. After a period of consideration and discussion and upon a motion made by the President, the Board of Directors unanimously approves all the documentation brought to their consideration under this item, which will be transcribed to the Company’s books. Immediately afterwards, the President puts under consideration of those present the [......] SIXTH ITEM of the Agenda: 6) MISCELLANEOUS. The President once again gives the floor to Dr. Gustavo Gené, who informs those present of a project of the National Securities Commission concerning the adoption by those companies that make a public offer of their shares of the International Financial Reporting Standards (IFRS). Dr. Gustavo Gené briefly details the timetable for the implementation of the project. Immediately afterwards, the President states that there being no further business to come before the board, the meeting is adjourned at 1.30 p.m. Signed by Messrs. Damián Mindlin, Gustavo Mariani, Rogelio Pagano, Eduardo L. Llanos, Edgardo Volosín, Diego Martín Salaverri, Ignacio Chojo Ortiz, and Rafael Mancuso.
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: May 9, 2008