Empresa Distribuidora y Comercializadora Norte Sociedad Anónima 20F/A 2011 Annual report (foreign) (amended)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 20-F/A

AMENDMENT NO. 1 TO

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2011

Commission File number: 001-33422

Empresa Distribuidora y Comercializadora Norte S.A.

(Exact name of registrant as specified in its charter)

Distribution and Marketing Company of the North S.A.	Argentine Republic
(Translation of registrant’s name into English)	(Jurisdiction of incorporation or organization)

Avenida Del Libertador 6363

Ciudad de Buenos Aires, C1428ARG

Buenos Aires, Argentina

(Address of principal executive offices)

Leandro Carlos Montero

Tel.: +54 11 4346 5127 / Fax: +54 11 4346 5325
Avenida Del Libertador 6363 (C1428ARG)

Buenos Aires, Argentina

Chief Financial Officer

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of each class:		Name of each exchange on which registered
Class B Common Shares		New York Stock Exchange, Inc.*
American Depositary Shares, or ADSs, evidenced by American Depositary Receipts, each representing 20 Class B Common Shares		New York Stock Exchange, Inc.

*	Not for trading, but only in connection with the registration of American Depositary Shares, pursuant to the requirements of the Securities and Exchange Commission.

Securities registered or to be registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: N/A

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report: 462,292,111 Class A Common Shares, 442,210,385 Class B Common Shares and 1,952,604 Class C Common Shares

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o Noþ

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Sections 13 or 15(d) of the Securities Exchange Act of 1934. Yes o Noþ

Note: Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes þ Noo

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filer þ Non-accelerated filero

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing: U.S. GAAP o

International Financial Reporting Standards as issued by the International Accounting Standards Board o Otherþ

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow: Item 17 o Item 18þ

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes o Noþ

TABLE OF CONTENTS

		Page

Explanatory Note		1

ITEM 3: Key Information		2

ITEM 18. Financial Statements		27

ITEM 19. Exhibits		28

Dated Signature Page of the 20-F

Signature Page

EXPLANATORY NOTE

We filed our annual report on Form 20-F for the fiscal year ended December 31, 2011 (which we refer to as the 20-F) on April 26, 2012. This Amendment No. 1 to our 20-F (which we refer to as Amendment No. 1) is being filed solely for the reasons set forth below:

	1.	To revise the signature page of the 20-F to include a dated signature page;

	2.	To revise the certifications of the CEO and CFO filed as exhibits 12.1, 12.2 and 13.1 of the 20-F to include signed and dated certifications;

	3.	To amend Item 3 “Key Information” only for purposes of revising the table “statement of operations data -US GAAP” on page 4 of the 20-F in light of the revision described under item 4.e below; and

	4.	To revise Item 18 “Financial Statements” of the 20-F solely for the reasons set forth below:

a. to include the consolidated statements of changes in shareholders’ equity on page F-6 of the consolidated financial statements;

b. to include the qualitative factors that led to a gain on a bargain purchase on page F-103 of the consolidated financial statements;

c. to include changes in equity under US GAAP for the year ended December 31, 2009 on page F-112 of the consolidated financial statements;

d. to appropriately reconcile the end of year balance as of December 31, 2010 and the beginning of year balance as of January 1, 2011 of the Company's benefit obligations on pages F-119 and F-120 of the consolidated financial statements;

e. to include EPS under US GAAP that excludes the portion of the income attributable to the non-controlling interest in our less-than-wholly-owned subsidiaries on pages F-122 and F-129 of the consolidated financial statements; and

f. to include additional disclosure about the difference between U.S. GAAP and Argentine GAAP in the accounting policy for impairment of long- lived assets on page F-130 of the consolidated financial statements.

We believe that these revisions are not material to our financial condition, operations or prospects.

Except as described above, no other changes have been made to the 20-F. The filing of this Amendment No. 1 does not, and does not purport to, amend, update or restate the information in any other item, or exhibits to, the 20-F, and should not be understood to mean that any other statements contained therein are true or complete as of any date subsequent to April 26, 2012.

This Amendment No. 1 consists of a cover page, this explanatory note, a dated signature page of the 20-F, signed and dated certifications of the chief executive officer and chief financial officer to the 20-F, Item 3 (as amended), Item 18 (as amended), Item 19 (as amended), the signature page to this Amendment No. 1 and the required certifications of our chief executive officer and chief financial officer.

Item 3. Key Information

In this annual report, except as otherwise specified, references to “we”, “us”, “our” and “the Company” are references to (i) Empresa Distribuidora y Comercializadora Norte S.A., or “Edenor”, on a standalone basis prior to March 1, 2011, (ii) Edenor, Empresa Distribuidora Eléctrica Regional S.A. (“Emdersa”) and Aeseba S.A. (“Aeseba”) when references are made to information as of any date within the period between March 1, 2011 and December 31, 2011 and (iii) Edenor and Aeseba as of each date after December 31, 2011. References to Edenor, Emdersa and/or Aeseba on a standalone basis are made by naming each company as the case may be. Our financial statements as of December 31, 2011, include the financial data of Emdersa, Aeseba and Empresa Distribuidora Eléctrica Regional Holding S.A. (“Emdersa Holding”). For more information, see “Item 4—Information on the Company—History and Development of the Company.”

FORWARD-LOOKING STATEMENTS

This annual report includes forward-looking statements, principally under the captions “Item 3. Key Information—Risk factors,” “Item 4. Information on the Company” and “Item 5. Operating and Financial Review and Prospects.” We have based these forward-looking statements largely on our current beliefs, expectations and projections about future events and financial trends affecting our business. Forward-looking statements may also be identified by words such as “believes,” “expects,” “anticipates,” “projects,” “intends,” “should,” “seeks,” “estimates,” “future” or similar expressions. Many important factors, in addition to those discussed elsewhere in this annual report, could cause our actual results to differ materially from those expressed or implied in our forward-looking statements, including, among other things:

	·	the outcome and timing of the integral tariff revision process (Revisión Tarifaria Integral or “RTI”) and, more generally, uncertainties relating to future government approvals to increase or adjust our tariffs;

	·	general political, economic, social, demographic and business conditions in the Republic of Argentina, or “Argentina” and particularly in the geographic market we serve;

	·	the impact of regulatory reform and changes in the regulatory environment in which we operate;

	·	electricity shortages;

	·	potential disruption or interruption of our service;

	·	restrictions on the ability to exchange Pesos into foreign currencies or to transfer funds abroad;

	·	the revocation or amendment of our concession by the granting authority;

	·	our ability to implement our capital expenditure plan, including our ability to arrange financing when required and on reasonable terms;

	·	fluctuations in exchange rates, including a devaluation of the Peso;

	·	the impact of high rates of inflation on our costs;

	·	the successful integration of Aeseba;

	·	our ability to access to financing under reasonable terms;

	·	the successful sale of Edelar and Edesa; and

	·	additional matters identified in “Risk factors”.

Forward-looking statements speak only as of the date they were made, and we undertake no obligation to update publicly or to revise any forward-looking statements after we file this annual report because of new information, future events or other factors. In light of these limitations, undue reliance should not be placed on forward-looking statements contained in this annual report.

SELECTED FINANCIAL DATA

The following table presents selected financial and operating data. This information should be read in conjunction with our audited consolidated financial statements and related notes and “Item 5. Operating and Financial Review and Prospects” included elsewhere in this annual report.

The financial data as of December 31, 2011 and 2010 and for each of the three years in the period ended December 31, 2011 are derived from our audited consolidated financial statements, which were audited by Price Waterhouse & Co. S.R.L. (“PWC”), member firm of PricewaterhouseCoopers network, whose report dated April 26, 2012 is included elsewhere herein. See Item 18 – “Financial Statements.” We have prepared our annual financial statements for the fiscal year ended December 31, 2011 included herein, assuming that we will continue as a going concern. Our independent auditors, PWC, issued a report dated April 26, 2012 on our financial statements as of and for the years ended December 31, 2011 and 2010, which contains an explanatory paragraph expressing substantial doubt as to our ability to continue as a going concern. As discussed in Notes 2 and 8.C to the financial statements, the delays in obtaining tariff increases, recognition of cost adjustments requested by the Company in accordance with the terms of the Adjustment Agreement and the continuous increase in operating expenses have affected significantly the economic and financial position of the Company and have raised substantial doubt with respect to our ability to continue as a going concern. Management's plans in response to these matters are also described in Note 2. However, our financial statements as of and for the year ended December 31, 2011 and 2010 do not include any adjustments or reclassifications that might result from the outcome of this uncertainty. See Item 3: “Key Information-Risk Factors - Risks Relating to Our Business - Failure or delay to negotiate further improvements to our tariff structure, including increases in our distribution margin, and/or to have our tariff adjusted to reflect increases in our distribution costs in a timely manner, could have a material adverse effect on our capacity to perform our financial and commercial obligations. As a result, there is substantial doubt with respect to the ability of the Company to continue as a going concern.” See Item 18: “Financial Statements.”

Our audited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in Argentina, which we refer to as Argentine GAAP and the regulations of the Comisión Nacional de Valores (National Securities Commission or CNV), which differ in certain significant respects from United States Generally Accepted Accounting Principles (U.S.GAAP). Note 32 to our audited consolidated financial statements included elsewhere in this annual report provides a description of the significant differences between Argentine GAAP and U.S. GAAP, as they relate to us, and a reconciliation to United States GAAP of net (loss) income for the years then ended December 31, 2011, 2010 and 2009 and shareholders’ equity as of December 31, 2011 and 2010. In addition, note 29 to our audited consolidated financial statements included elsewhere in this annual report provides a reconciliation between Argentine GAAP and IFRS of shareholders’s equity as of January 1, 2011(transition date) and December 31, 2011 and of net (loss) for the year ended December 31, 2011.

Our financial statements as of December 31, 2011, include the financial data of Emdersa, Aeseba and Emdersa Holding. The incorporation of Aeseba, including its subsidiary, Empresa Distribuidora de Energía Norte S.A., an electricity distribution company with the concession area in the northern part of the Province of Buenos Aires (“Eden”), was made on the basis of the general method of line item consolidation, which is established in Technical Resolution No. 21 issued by the Argentine Federation of Professional Councils in Economic Sciences (the “FACPCE”). Furthermore, as of December 31, 2011, in accordance with the decision of the Board of Directors to divest and sell the subsidiaries of Emdersa and Emdersa Holding, including Empresa Distribuidora de San Luis S.A. (“Edesal”), Empresa Distribuidora de La Rioja S.A. (“Edelar”), Empresa Distribuidora de Salta S.A. (“Edesa”) and Emdersa Generación Salta S.A. (“Egssa”), we have classified these assets in the consolidated financial statements as of December 31, 2011 as “Other assets available for sale”. The corresponding charges to results have been included line by line in our consolidated statements of operations for the year ended December 31, 2011.

In this annual report, except as otherwise specified, references to “$”, “U.S. $” and “Dollars” are to U.S. Dollars, and references to “Ps. ” and “Pesos” are to Argentine Pesos. Solely for the convenience of the reader, Peso amounts as of and for the year ended December 31, 2011 have been translated into U.S. Dollars at the buying rate for U.S. Dollars quoted by Banco de la Nación Argentina (Banco Nación) on December 31, 2011 of Ps. 4.304 to U.S. $1.00. The U.S. Dollar equivalent information should not be construed to imply that the Peso amounts represent, or could have been or could be converted into, U.S. Dollars at such rates or any other rate. See “Item 3. Key Information—Exchange Rates.”

Under Argentine GAAP, we generally are not required to record the effects of inflation in our financial statements. However, because Argentina experienced a high rate of inflation in 2002, with the wholesale price index increasing by approximately 118%, we were required by Decree No. 1269/2002 and CNV Resolution No. 415/2002 to restate our financial statements in constant Pesos in accordance with Argentine GAAP. On March 25, 2003, Decree No. 664/2003 rescinded the requirement that financial statements be prepared in constant currency, effective for financial periods on or after March 1, 2003. As a result, we are not required to restate and have not restated our financial statements for inflation after February 28, 2003. See note 2 to our audited consolidated financial statements included in this annual report. In connection with the adoption of IFRS and in accordance with General Resolution No 562/09 of the CNV, we have elected to recognize a deferred tax liability related to the effect of inflation on the value of other fixed assets. This adjustment has been recorded with impact in our accumulated deficit. At the 2012 shareholders’ meeting, we expect that our shareholders will resolve to reclassify this adjustment within equity, as required by the resolution of the CNV.

Certain figures included in this annual report have been subject to rounding adjustments. Accordingly, figures shown as totals may not sum due to rounding.

	2011(*)			2011(*)			2010			2009			2008			2007
Statement of operations data	(in millions, except for per share and per ADS data)
Argentine GAAP
Net sales	$	U.S. 828.3		Ps.	3,565.0		Ps.	2,173.6		Ps.	2,077.9		Ps.	2,000.2		Ps.	1,981.9
Electric power purchases		(370.3	)		(1,593.9	)		(1,069.7	)		(1,003.4	)		(934.7	)		(889.9	)
Gross margin		458.0			1,971.1			1,103.9			1,074.5			1,065.5			1,092.0
Transmission and distribution expenses		(276.2	)		(1,188.7	)		(636.3	)		(548.6	)		(497.9	)		(417.6	)
Selling expenses		(99.9	)		(429.9	)		(194.2	)		(159.0	)		(126.0	)		(120.6	)
Administrative expenses		(75.1	)		(323.4	)		(178.9	)		(144.0	)		(138.7	)		(124.7	)
Subtotal		6.7			29.0			94.5			222.9			302.9			429.2
Gain (loss) in permanent investments		—			—			—			—			—			—
Negative Goodwill amortization (1)		2.9			12.3			—			—			—			—
Result from valuation of other assets available for sale at NRV (8)		(17.4	)		(75.0	)		—			—			—			—
Subtotal		(7.8	)		(33.7	)		94.5			222.9			302.9			429.2
Other (expenses) income , net		(5.9	)		(25.3	)		(9.8	)		23.3			(29.8	)		1.0
Financial income (expenses) and holding gains (losses):
Generated by assets:
Exchange difference		4.2			18.0			7.4			21.4			8.1			(0.9	)
Interest		5.7			24.4			28.4			16.2			9.8			13.4
Holding results		(0.3	)		(1.2	)		(14.7	)		37.6			(7.3	)		0.1
Taxes and sundry expenses(2)		(7.0	)		(30.1	)		(16.0	)		(13.4	)		—			—
Others		(0.6	)		(2.4	)		—			—			—			—
Generated by liabilities:
Financial expenses		(6.0	)		(25.7	)		(12.5	)		(11.7	)		(10.0	)		(21.0	)
Exchange difference		(25.1	)		(108.1	)		(40.3	)		(99.1	)		(92.7	)		(29.9	)
Interest		(44.1	)		(189.7	)		(91.3	)		(87.7	)		(95.3	)		(74.5	)
Taxes and sundry expenses(2)		(5.7	)		(24.7	)		(21.1	)		(19.2	)		—			—
Loss for debt restructuring		(0.6	)		(2.7	)		—			—			—			—
Others		(0.5	)		(2.2	)		—			—			—			—
Adjustment to present value of the retroactive tariff increase arising from the application of the new electricity rate schedule and other receivables(3)		0.3			1.2			11.6			3.4			13.5			(29.6	)
Adjustment to present value of notes(4)		—			—			(4.2	)		(5.2	)		(8.5	)		(21.5	)
Gain (Loss) from the purchase of notes(5)		1.5			6.5			(7.1	)		81.5			93.5			(10.2	)
Adjustment to present value of purchased notes(4)		—			—			—			—			—			(8.6	)
Results holdings in related companies		0.2			0.9			—			—			—			—
(Loss) Income before taxes and minority interest		(91.7	)		(394.7	)		(75.2	)		170.0			184.3			247.4
Income tax		(5.2	)		(22.4	)		26.1			(79.3	)		(61.2	)		(125.0	)
Minority interest		(4.2	)		(18.2	)		—			—			—			—
Net (loss) income	U.S.$	(101.2	)	Ps.	(435.4	)	Ps.	(49.1	)	Ps.	90.6		Ps.	123.1		Ps.	122.5
Net (loss) income per ordinary share – basic and diluted		(0.113	)		(0.485	)		(0.055	)		0.101			0.137			0.135
Dividends declared per ordinary share(6)		—			—			—			—			—			—
Net (loss) income per ADS(7) — basic and diluted		(2.256	)		(9.707	)		(1.095	)		2.020			2.745			2.702
Number of shares outstanding		897,042,600			897,042,600			897,042,600			897,042,600			897,042,600			906,455,100

U.S. GAAP
Net sales/service revenues	U.S.$	662.9		Ps.	2,853.2		Ps.	2,253.7		Ps.	2,163.3		Ps.	2,059.0		Ps.	1,937.0
Electric power purchases		(311.7	)		(1,341.6	)		(1,069.7	)		(1,003.4	)		(934.7	)		(889.9	)
Transmission and distribution expenses		(259.7	)		(1,117.8	)		(731.8	)		(624.0	)		(577.0	)		(477.5	)
Gross margin		91.5			393.9			452.1			535.9			547.3			569.6
Operating expenses, net		(31.7	)		(136.5	)		(372.4	)		(294.7	)		(296.6	)		(207.5	)
Net operating income (loss)		59.8			257.3			79.7			241.3			250.7			362.1
Financial (expense), net and holding gains		(54.9	)		(236.4	)		(134.7	)		(75.0	)		82.0			(46.5	)
Net income (loss) before income taxes		4.9			20.9			(54.9	)		166.3			332.7			315.7
Income tax		(37.3	)		(160.6	)		19.2			(93.2	)		(68.2	)		(99.9	)
Less: Net gain from continued operations attributable to non-controlling interest…		1.4			5.8			—			—			—			—
Net (loss) income for the year		(33.8	)		(145.5	)		(35.7	)		73.1			264.5			215.8

Loss from discontinued operations before income tax and non-controlling interest..		(37.3	)		(160.4	)		—			—			—			—

Income tax from discontinued operations...		5.3			23.0			—			—			—			—
Loss on discontinued operations attributable to Edenor shareholders’		(33.5	)		(144.3	)		—			—			—			—
Less: Net gain on discontinued operations attributable to non-controlling interest		1.6			6.9			—			—			—			—
Net (loss) income under US GAAP attributable to EDENOR shareholders’		(67.3	)		(289.8	)		—			—			—			—
Net gain under US GAAP attributable to non-controlling interest		2.9			12.7			—			—			—			—
Net (loss) Earning per ordinary share – basic and diluted		(0.038	)		(0.162	)		(0.040	)		0.081			0.295			0.238
(Loss) Earning per share from discontinuing operations – Basic and diluted		(0.037	)		(0.161	)		—			—			—			—
Net (loss) income per ADS(7) — basic and diluted		(724.9	)		(3.120	)		(0.796	)		1.630			5.897			4.761

(*)	Consolidated financial data.
(1)	Represents the amortization of the negative goodwill recognized as a result of the excess of the fair value of the assets acquired and liabilities assumed at the moment of the acquisition of Aeseba and Emdersa over the purchase price.
(2)	For the years ended December 31, 2008 and 2007, taxes on financial transactions were included in administrative expenses. For the years ended December 31, 2009, 2010 and 2011, taxes on financial transactions were included as a separate line item, as taxes and sundry expenses under financial income (expenses) and holding gains (losses) generated by assets and liabilities.
(3)	Reflects the adjustment to present value, as of December 31, 2011, of the retroactive portion of the tariff increase that was invoiced in 55 consecutive monthly installments, beginning in February 2007. As of December 31, 2011, no amounts were due under this transaction. Also reflects, as of December 31, 2010, the adjustment to present value of the retroactive portion of the tariff increase that was invoiced in 55 consecutive monthly installments, beginning in February 2007, and the adjustment to present value of Ps. 38.4 million due under the payment plan agreement with the Province of Buenos Aires that was invoiced in 18 installments, starting in January 2007. As of December 31, 2010, no amounts were due under the payment plan agreement with the Province of Buenos Aires. As of December 31, 2009 and 2008, Ps. 2.3 million was due under the payment plan agreement with the Province of Buenos Aires and Ps. 21.4 million, Ps. 69.2 million and Ps. 118.8 million of the retroactive tariff increase had been invoiced in 2010, 2009 and 2008, respectively. In accordance with Argentine GAAP, we account for these long term receivables at their net present value, which we calculate at a discount rate that reasonably reflects the market evaluation of the time value of money and specific risks, net of issuance expenses, for the retroactive tariff increase, recording the resulting non-cash charge as an adjustment to present value of this receivable. See “Item 5. Operating and Financial Review and Prospects—Factors Affecting Our Results of Operations—)Tariffs.”
(4)	We record our financial debt in our balance sheet at fair value reflecting our management’s best estimate of the amounts expected to be paid at each year end, calculated at a discount rate that reasonably reflects the market evaluation of the time value of money and specific risks, net of issuance expenses, for the years ended December 31, 2011, 2010, 2009, 2008 and 2007.
(5)	In 2007, we repurchased U.S. $43.7 million principal amount of our outstanding Fixed Rate Par Notes due 2016 and redeemed and repurchased U.S. $240 million principal amount of our outstanding Discount Notes due 2014. In the years ended December 31, 2008, 2009 and 2010, we repurchased U.S. $32.5 million, U.S. $32.2 million and U.S. $15.3 million principal amount of our outstanding Fixed Rate Par Notes due 2016, respectively, and U.S. $17.5 million, U.S. $53.8 million and U.S. $123.9 million principal amount of our outstanding Senior Notes due 2017, respectively. In addition, in the year ended December 31, 2011, we repurchased U.S. $12.7 million and U.S. $41.5 million principal amount of our outstanding Senior Notes due 2019 and Senior Notes due 2022, respectively. See “Item 5. Operating and Financial Review and Prospects—Liquidity and Capital Resources—Debt.”
(6)	Edenor have not declared or paid any dividends since August 14, 2001.
(7)	Each ADS represents 20 Class B common shares.
(8)	As of December 31, 2011, corresponds to investments in EMDERSA and EMDERSA HOLDING that have been valued at their estimated realizable value, which is lower than their equity value.

	2011(*)			2011(*)			2010		2009		2008		2007
	(in millions)
Balance sheet data
Argentine GAAP
Current assets:
Cash and banks	U.S.$	5.4		Ps.	23.4		Ps.	8.6	Ps.	8.7	Ps.	6.1	Ps.	3.5
Investments		25.5			109.5			668.2		219.7		121.0		97.7
Trade receivables		124.2			534.7			421.2		389.2		400.5		346.0
Other receivables		56.9			244.9			43.4		61.1		42.8		26.0
Supplies		5.3			22.9			12.4		14.9		16.7		23.2
Other assets available for sale		50.3			216.5			—		—		—		—
Total current assets	U.S.$	267.7		Ps.	1,152.0		Ps.	1,153.8	Ps.	693.6	Ps.	587.1	Ps.	496.3
Non-current assets:
Trade receivables		10.6			45.7			45.5		87.0		111.4		100.3
Other receivables		16.4			70.7			14.8		88.8		99.5		144.1
Investments in other companies		0.1			0.4			0.4		0.4		0.4		0.4
Investments		—			—			—		—		67.2		—
Supplies		6.2			26.9			23.2		18.6		12.8		13.8
Property, plant and equipment		1,100.9			4,738.3			3,689.5		3,482.4		3,256.3		3,092.7
Goodwill		(67.3	)		(289.6	)		—		—		—		—
Total non-current assets	U.S.$	1,067.0		Ps.	4,592.4		Ps.	3,773.5	Ps.	3,677.2	Ps.	3,547.6	Ps.	3,351.3
Total assets	U.S.$	1,334.7		Ps.	5,744.4		Ps.	4,927.3	Ps.	4,370.7	Ps.	4,134.6	Ps.	3,847.6
Current liabilities:
Trade accounts payable		153.0			658.3			378.5		347.8		339.3		316.2
Loans		13.7			59.0			54.1		83.0		27.2		29.3
Salaries and social security taxes		66.7			287.1			180.4		118.4		94.8		59.9
Taxes		39.3			169.0			111.1		140.3		111.0		84.6
Other liabilities		33.6			144.8			4.5		8.0		10.5		9.7
Accrued litigation		2.4			10.3			57.8		62.8		52.8		39.9
Total current liabilities	U.S.$	308.7		Ps.	1,328.6		Ps.	786.5	Ps.	760.3	Ps.	635.6	Ps.	539.6
Non-current liabilities:
Trade accounts payable		12.6			54.3			51.0		46.9		40.2		35.5
Loans		276.5			1,189.9			1,035.1		707.5		913.1		949.1
Salaries and social security taxes		16.2			69.5			50.6		43.7		40.1		24.7
Taxes		67.6			290.9			262.8		9.4		0		0
Other liabilities(1)		319.2			1,373.7			984.5		610.8		369.0		281.4
Accrued litigation		15.4			66.1			6.8		10.1		45.1		42.8
Total non-current liabilities		707.4			3,044.5			2,390.9		1,428.3		1,407.5		1,333.5
Total liabilities	U.S.$	1,016.0		Ps.	4,373.0		Ps.	3,177.4	Ps.	2,188.5	Ps.	2,043.1	Ps.	1,873.0
Minority interest		13.2			56.9			—		—		—		—
Shareholders’ equity		305.4			1,314.5			1,749.9		2,182.2		2,091.6		1,974.6
Total liabilities and shareholders’ equity	U.S.$	1,334.7		Ps.	5,744.4		Ps.	4,927.3	Ps.	4,370.7	Ps.	4,134.6	Ps.	3,847.6

U.S. GAAP
Current assets	U.S.$	217.4		Ps.	935.5		Ps.	1,155.4	Ps.	703.3	Ps.	666.7	Ps.	536.7
Property, plant and equipment, net		1,114.9			4,798.4			3,754.6		3,552.4		3,331.2		3,175.7
Other non-current assets		52.0			223.7			274.6		260.4		258.4		346.6
Assets of disposal groups classified as held for sale		264.6			1,138.8			—		—		—		—
Total assets	U.S.$	1,648.8		Ps.	7,096.4		Ps.	5,184.6	Ps.	4,516.1	Ps.	4,256.3	Ps.	4,059.0
Current liabilities	U.S.$	308.7		Ps.	1,328.6		Ps.	818.1	Ps.	790.9	Ps.	707.5	Ps.	573.7
Non-current liabilities		772.5			3,324.7			2,598.5		1,923.8		1,821.6		2,018.2
Liabilities of disposal groups classified as held for sale		214.3			922.2			—		—		—		—
Total liabilities		1,295.4			5,575.5			3,416.6		2,714.7		2,529.1		2,591.9
Shareholders’ equity		353.4			1,520.9			1,768.0		1,801.4		1,727.2		1,467.1
Total liabilities and shareholders’ equity	U.S.$	1,648.8		Ps.	7,096.4		Ps.	5,184.6	Ps.	4,516.1	Ps.	4,256.3	Ps.	4,059.0

(*)

Consolidated financial data.

(1)

Includes the amounts collected through the Program for the Rational Use of Electricity Power (PUREE), which as of December 31, 2011, 2010, 2009 and 2008 amounted to Ps. 928.7 million, Ps. 529.1 million, Ps. 233.3 million and Ps. 33.5 million, respectively. For the year ended December 31, 2011, Ps. 61.6 million correspond to PUREE funds collected by Aeseba, included under current liabilities, and Ps. 867.1 million correspond to PUREE funds collected by Edenor, included under non-current liabilities. Edenor is permitted to retain funds from the PUREE that it would otherwise be required to transfer to CAMMESA according to Resolution SS.EE. 1037/07.

	2011			2011			2010			2009			2008			2007
	(in millions)
Cash flow data
Argentine GAAP
Operating activities:
Net (loss) income	U.S.$	(101.2	)	Ps.	(435.4	)	Ps.	(49.1	)	Ps.	90.6		Ps.	123.1		Ps.	122.5
Adjustment to reconcile net (loss) income to net cash flows provided by (used in) operating activities:
Depreciation of property, plant and equipment		58.6			252.2			178.4			175.4			170.3			174.4
Retirement of property, plant and equipment		5.1			22.0			1.1			2.8			1.9			1.1
Gain from the sale of real property		—			—			(5.3	)		—			—			—
Gain from investments in affiliated parties		(0.2	)		(0.9	)		0			—			—			(0.1	)
Negative Goodwill amortization		(2.9	)		(12.3	)		—			—			—			—
(Gain) Loss from investments		(10.4	)		(44.8	)		(55.7	)		26.4			(4.3	)		(8.5	)
Adjustment to present value of notes		—			—			4.2			5.2			8.5			21.5
Loss (Gain) from the purchase and redemption of notes		(1.5	)		(6.5	)		7.1			(81.5	)		(93.5	)		10.2
Loss for debt restructuring		0.6			2.7			—			—			—			—
Adjustment to present value of the repurchased and redeemed notes		—			—			—			—			—			8.6
Results from valuation of other assets available for sale at NRV		17.4			75.0			—			—			—			—
Exchange differences, interest and penalties on loans		71.3			306.8			49.5			178.6			232.7			69.5
Increase in trade receivables due to the unbilled portion of the retroactive tariff increase		—			—			—			—			—			(171.3	)
Recovery of the accrual for tax contingencies		—			—			—			(35.6	)		—			—
Income tax		(5.2	)		22.4			(26.1	)		79.3			61.2			125.0
Allowance for doubtful accounts		8.8			37.9			16.3			13.5			17.1			—
Reversal of the allowance for doubtful accounts		—			—			—			(27.0	)		(24.0	)		—
Allowance for other doubtful accounts		0.3			1.5			4.9			3.3			1.7			—
Results holdings in related companies		4.2			18.2			—			—			—			—
Adjustment to net 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 Buenos Aires		(0.3	)		(1.2	)		(11.6	)		(3.4	)		(13.5	)		29.6
Changes in operating assets and liabilities:
(Increase) decrease in trade receivables (net of the unbilled portion of the retroactive tariff increase)		(36.5	)		(157.2	)		0.2			48.1			(49.5	)		(36.9	)
Net (increase) decrease in other receivables		(60.2	)		(258.9	)		(0.3	)		5.3			(33.4	)		(8.4	)
(Increase) decrease in supplies		(3.5	)		(15.2	)		(2.2	)		(3.9	)		7.4			(18.4	)
Increase in other available for sale assets		(67.7	)		(291.6	)		—			—			—			—
Increase in trade accounts payable		65.8			283.2			34.9			15.2			27.8			52.7
Increase in salaries and social security taxes		29.2			125.6			69.0			27.2			50.3			12.9
Increase (decrease) in taxes		14.8			63.5			(45.8	)		(56.9	)		26.4			22.5
Increase in other liabilities		39.0			167.8			74.5			39.3			78.1			17.7
Increase in funds obtained from the Program for the Rational Use of Electric Power (PUREE)(1)		92.8			399.6			295.8			199.8			—			—
Net increase (decrease) in accrued litigation		2.8			11.8			(8.2	)		10.6			15.1			16.2
Financial interest paid, net of interest capitalized		(24.7	)		(106.2	)		(64.9	)		(76.8	)		(62.7	)		(25.5	)
Financial and commercial interest collected		12.0			51.5			60.2			32.2			6.9			11.6
Net cash flow provided by operating activities		118.9			511.8			526.9			668.0			547.5			427.2
Investing activities:
Additions of property, plant and equipment		(151.8	)		(653.4	)		(388.8	)		(404.2	)		(325.4	)		(336.9	)
Acquisition of permanent investments		(131.9	)		(567.6	)		—			—			—			—
Cash increase due to the acquisition of permanent investments i		27.7			119.0			—			—			—			—
Collection of other investments sold		29.4			126.7						—			—			—
Collection of PPE sold		—			—			7.4			—			—			—
Net cash flow used in investing activities		(226.6	)		(975.2	)		(381.3	)		(404.2	)		(325.4	)		(336.9	)
Financing activities:
Decrease (increase) in current and non-current investments		—			—			—			13.6			(67.9	)		—
Net (decrease) increase in loans		(18.8	)		(81.1	)		302.9			(175.5	)		(122.9	)		(203.6	)
Capital increase		—			—			—			—			—			181.8
Increase in minority interest		9.0			38.6			—			—			—			—
Treasury shares purchased		—			—			—			—			(6.1	)		—
Payment of dividends (2)		(8.8	)		(38.0	)		—			—			—			—
Net cash flows (used in) provided by financing activities		(18.7	)		(80.4	)		302.9			(161.8	)		(197.0	)		(21.8	)
Cash variations:
Cash and cash equivalents at beginning of year	U.S.$	157.3		Ps.	676.8		Ps.	228.4		Ps.	126.4		Ps.	101.2		Ps.	32.7
Cash and cash equivalents at end of the year		30.9			133.0			676.8			228.4			126.4			101.2
Net (decrease) increase in cash and cash equivalents		(126.4	)		(543.9	)		448.5			102.0			25.2			68.5

(1)	For the year ended December 31, 2008, funds obtained from the PUREE were included under “Increase in other liabilities”.
(2)	Corresponds to dividend payments declared by Aeseba before it was acquired by Edenor.

	Year ended December 31,
	2011									2010			2009			2008			2007
	Edenor			Aeseba (1)			Emdersa (1)
Operating data
Energy sales (in GWh):
Residential		8,139			619			1,390			7,796			7,344			7,545			7,148
Small commercial		1,601			227			—			1,543			1,470			1,530			1,485
Medium commercial		1,700			104			1,191			1,634			1,565			1,597			1,552
Industrial		3,442			807			385			3,378			3,204			3,277			3,628
Wheeling system(2)		4,156			291			699			3,891			3,622			3,700			3,111
Others:
Public lighting		656			80			189			654			644			644			643
Shantytowns		384			657			—			377			351			304			301
Others(3)		20			6			—			20			20			19			18
Customers (in thousands)(4)		2,699			340			550			2,662			2,605			2,537			2,490
Energy losses (%)		12.6	%		10.4	%		11.2	%		12.5	%		11.9	%		10.8	%		11.6	%
MWh sold per employee		7,188.1			3,771.2			9,421.5			7,123.9			6,936.1			7,392.8			7,230.6
Customers per employee		965			460			1,345			971			978			997			998

(1)	Financial data and other operating information for the year ended December 31, 2011 may not be representative of the results recorded in our Consolidated financial statements for the year ended December 31, 2011, which includes financial information of Emdersa and Aeseba for the period commencing March 1, 2011 and ended December 31, 2011.
(2)	Wheeling system charges represent our tariffs for large users, which consist of a fixed charge for recognized technical losses and a charge for our distribution margins but exclude charges for electric power purchases, which are undertaken directly between generators and large users.
(3)	Represents energy consumed internally by us and our facilities.
(4)	We define a customer as one meter. We may supply more than one consumer through a single meter. In particular, because we measure our energy sales to each shantytown collectively using a single meter, each shantytown is counted as a single customer.

EXCHANGE RATES

From April 1, 1991 until the end of 2001, the Convertibility Law established a fixed exchange rate under which the Central Bank was obliged to sell U.S. Dollars at a fixed rate of one Peso per U.S. Dollar (the “Convertibility Regime”). On January 6, 2002, the Argentine Congress enacted the Public Emergency Law, formally putting an end to the regime of the Convertibility Regime and abandoning over ten years of U.S. Dollar-Peso parity. The Public Emergency Law grants the executive branch of the Argentine government the power to set the exchange rate between the Peso and foreign currencies and to issue regulations related to the foreign exchange market. The Public Emergency law has been extended until December 31, 2013. For a brief period following the end of the Convertibility Regime, the Public Emergency Law established a temporary dual exchange rate system. Since February 2002, the Peso has been allowed to float freely against other currencies.

The following table sets forth the annual high, low, average and period-end exchange rates for U.S. Dollars for the periods indicated, expressed in Pesos per U.S. Dollar at the purchasing exchange rate and not adjusted for inflation. When preparing our financial statements, we utilize the selling exchange rates for U.S. Dollars quoted by Banco Nación to translate our U.S. Dollar denominated assets and liabilities into Pesos. The Federal Reserve Bank of New York does not report a noon buying rate for Pesos.

	Low		High		Average			Period End
	(Pesos per U.S. Dollar)
Year ended December 31,
2007		3.06		3.18		3.12	(1)		3.15
2008		3.01		3.47		3.16	(1)		3.45
2009		3.45		3.88		3.73	(1)		3.80
2010		3.79		3.99		3.91	(1)		3.98
2011		3.97		4.30		4.13	(1)		4.30

Month
January 2012		4.30		4.34		4.321	(2)		4.34
February 2012		4.33		4.36		4.35	(2)		4.36
March 2012		4.34		4.38		4.36	(2)		4.38
April 2012(3)		4.38		4.41		4.40	(4)		4.41

Source: Banco Nación

(1)	Represents the average of the exchange rates on the last day of each month during the period.
(2)	Average of the lowest and highest daily rates in the month.
(3)	Represents the corresponding exchange rates from April 1 through April 24, 2012.
(4)	Represents the average of the lowest and highest daily rates from April 1 through April 24, 2012.

RISK FACTORS

Risks Related to Argentina

Overview

We are a limited liability corporation (sociedad anónima) incorporated under the laws of the Republic of Argentina and all of our revenues are earned in Argentina and all of our operations, facilities, and customers are located in Argentina. Accordingly, our financial condition and results of operations depend to a significant extent on macroeconomic, regulatory, and political and financial conditions prevailing in Argentina, including growth, inflation rates, currency exchange rates, interest rates and other local, regional and international events and conditions that may affect Argentina in any manner. For example, slower economic growth or economic recession could lead to a decreased demand for electricity in our concession area or a decline in the purchasing power of our customers, which, in turn, could lead to a decrease in collection rates from our customers or increased energy losses due to illegal use of our service. Actions of the Argentine government concerning the economy, including decisions with respect to inflation, interest rates, price controls, foreign exchange controls and taxes, have had and could continue to have a material adverse effect on private sector entities, including us. For example, during the Argentine economic crisis of 2001, the Argentine government froze electricity distribution margins and caused the pesification of our tariffs, which had a materially adverse effect on our business and financial condition and led us to suspend payments on our financial debt at the time. We cannot assure you that the Argentine government will not adopt other policies that could adversely affect the Argentine economy or our business, financial condition or results of operations. In addition, we cannot assure you that future economic, regulatory, social and political developments in Argentina, will not impair our businesses, financial condition, or results of operations or cause the market value of our ADSs and Class B common shares to decline.

The global financial crisis and unfavorable credit and market conditions that commenced in 2007 may negatively affect our liquidity, customers, business, and results of operations

The ongoing effects of the global credit crisis and related turmoil in the global financial system may have a negative impact on our business, financial condition and results of operations, an impact that is likely to be more severe on an emerging market economy, such as Argentina. The effect of this economic crisis on our customers and on us cannot be predicted. Weak economic conditions could lead to reduced demand for energy, which could have a negative effect on our revenues. Economic factors such as unemployment, inflation levels and the availability of credit could also have a material adverse effect on demand for energy and therefore on our financial condition and operating results. In addition, our ability to access the credit or capital markets may be restricted at a time when we would need financing, which could have an impact on our flexibility to react to changing economic and business conditions. For these reasons, any of the foregoing factors or a combination of these factors could have an adverse effect on our results of operations and financial condition and cause the market value of our ADSs and Class B common shares to decline.

Argentina’s economic recovery since the 2001 economic crisis may not be sustainable in light of current economic conditions, and any significant decline could adversely affect our financial condition

During 2001 and 2002, Argentina went through a period of severe political, economic and social crisis. Although the economy has recovered significantly since the 2001 crisis, uncertainty remains as to the sustainability of economic growth and stability. After the significant slowdown in the Argentine economy in 2009, which started in the last quarter of 2008 and continued into much of 2009 (impacted by the largest global crisis in decades and negative domestic factors), the Argentine economy experienced a growth of about 0.9% and during 2009 and 2010, respectively, according to preliminary official public estimates. Similarly, during 2011, the Argentine economy registered a growth of 8.9%. However, uncertainty remains about the sustainability of this growth. Sustainable economic growth is dependent on a variety of factors, including international demand for Argentine exports, the stability and competitiveness of the Peso against foreign currencies, confidence among consumers and foreign and domestic investors and a stable rate of inflation.

The Argentine economy remains fragile, as reflected by the following economic conditions:

	•	the availability of long-term credit is scarce;

	•	investment as a percentage of GDP remains too low to sustain the growth rate of recent years;

	•	fiscal surplus shows a steady decline, with risk of becoming a fiscal deficit in the near term;

	•	public debt remains high, as payments have increased (in line with post-default payment terms), while international financing remains limited;

	•	inflation has accelerated recently and threatens to continue at levels that risk economic stability;

	•	the regulatory environment continues to be uncertain;

	•	controls to exchange Pesos into foreign currencies or to transfer funds abroad continue to increase;

	•	the recovery has depended to some extent on high commodity prices, which despite having a favorable long-term trend, are volatile in the short-term and beyond the control of the Argentine government; and

	•	the trade balance surplus (and the fiscal surplus, to a lesser extent) is largely dependent on the production of grains and soybeans, such that risk to economic stability is magnified by the possibility of a new major drought affecting these crops (as was the case in 2008 and 2009).

As in the recent past, Argentina’s economy may be adversely affected if political and social pressures inhibit the implementation by the Argentine government of policies designed to maintain price stability, generate growth and enhance consumer and investor confidence. This, in turn, could lead to decreased demand for our services as well as a decrease in collection rates from customers and increased energy losses due to illegal use of our services, which could materially adversely affect our financial condition and results of operations, or cause the market value of our ADSs and Class B common shares to decline. Furthermore, the Argentine government could respond to a lack of economic growth or stability by adopting measures that affect private sector enterprises, as it has done in the past, including the tariff restrictions imposed on public utility companies such as several of our subsidiaries.

We cannot assure you that a decline in economic growth or increased economic instability, developments over which we have no control, would not have an adverse effect on our business, financial condition or results of operations or would not have a negative impact on the market value of our ADSs and Class B common shares.

The impact of inflation in Argentina on our costs could have a material adverse effect on our results of operations

Inflation has, in the past, materially undermined the Argentine economy and the Argentine government’s ability to create conditions that permit growth. According to data published by the Instituto Nacional de Estadística y Censos (National Statistics and Census Institute or INDEC), the rate of inflation reached 9.5% in 2011, 10.9% in 2010 and 7.7% in 2009. Inflation rates reported by several Argentine provinces on average refer to annual rates of inflation significantly in excess of those published by INDEC. Average inflation in the 11 provinces that publish independent inflation data was 14.2%, 23.8% and 20% for 2009, 2010 and 2011, respectively. The Argentine government has implemented programs to control inflation and monitor prices for essential goods and services, including price support arrangements agreed between the Argentine government and private sector companies in several industries and markets.

A return to a high inflation environment would undermine Argentina’s foreign competitiveness by diluting the effects of the Peso devaluation, negatively impact the level of economic activity and employment and undermine confidence in Argentina’s banking system, which could further limit the availability of domestic and international credit to businesses. In turn, a portion of the Argentine debt is adjusted by the Coeficiente de Estabilización de Referencia (Stabilization Coefficient or CER), a currency index, that is strongly related to inflation. Therefore, any significant increase in inflation would cause an increase in the Argentine external debt and consequently in Argentina’s financial obligations, which could exacerbate the stress on the Argentine economy. A high inflation environment could also temporarily undermine our results of operations if we are temporarily unable, or if we are not able at all, to adjust our tariffs accordingly and could adversely affect our ability to finance the working capital needs of our businesses on favorable terms, and adversely affect our results of operations and cause the market value of our ADSs and Class B common shares to decline.

The credibility of several Argentine economic indexes has been called into question, which may lead to a lack of confidence in the Argentine economy and may in turn limit our ability to access the credit and capital markets

In January 2007, INDEC modified its methodology used to calculate the consumer price index (CPI), which is calculated as the monthly average of a weighted basket of consumer goods and services that reflects the pattern of consumption of Argentine households. Further, at the time that INDEC adopted this change in methodology, the Argentine government also replaced certain key personnel at INDEC. The alleged governmental interference prompted complaints from the technical staff at INDEC, which, in turn, has led to the initiation of several judicial investigations involving members of the Argentine government aimed at determining whether there was a breach of classified statistical information relating to the collection of data used in the calculation of the CPI. These events have affected the credibility of the CPI index published by INDEC, as well as other indexes published by INDEC the calculation of which are based on the CPI, including poverty rates, the unemployment rate and the calculation of the GDP, among others. As a result, the inflation rate of Argentina and the other rates calculated by INDEC could be higher than as indicated in official reports. The International Monetary Fund is currently providing technical assistance to the Argentine government to improve the calculation and collection of inflation data. If these investigations result in a finding that the methodologies used to calculate the CPI or other INDEC indexes derived from the CPI were manipulated by the Argentine government, or if it is determined that it is necessary to correct the CPI and the other INDEC indexes derived from the CPI as a result of the methodology used by INDEC, there could be a significant decrease in confidence in the Argentine economy. Given the limited credit available to emerging market nations as a result of the global economic crisis, our ability to access credit in the capital markets could be limited by the uncertainty relating to the inaccuracy of the economic indexes and rates in question which could adversely affect our results of operations and financial conditions and cause the market value of our ADSs and Class B common shares to decline.

Argentina’s ability to obtain financing from international markets is limited, which may impair its ability to implement reforms and foster economic growth, and consequently, may affect our business, results of operations and prospects for growth

In 2005, Argentina restructured part of its sovereign debt that had been in default since the end of 2001. The Argentine government announced that as a result of this restructuring, it had approximately U.S. $129.2 billion in total gross public debt as of December 31, 2005. Certain bondholders that did not participate in that restructuring, mainly from the United States, Italy and Germany, have filed legal actions against Argentina to collect on the defaulted bonds. Many of these proceedings are still pending as of this date and holdout creditors may initiate new suits in the future.

On January 3, 2006, Argentina repaid in full its debt of approximately U.S. $9.8 billion with the International Monetary Fund.

In September 2008, Argentina announced its intention to cancel its external public debt to Paris Club creditor nations using reserves of the Central Bank in an amount equal to approximately U.S. $6.5 billion. However, as of the date of this annual report, the Argentine government has not yet cancelled such debt. Indeed, negotiations in this respect remain stagnant. If no agreement with the Paris Club creditor nations is reached, financing from multilateral financial institutions may be limited or not available, which could adversely affect economic growth in Argentina and Argentina’s public finances.

Certain groups of holders that did not participate in the 2005 restructuring have filed claims against Argentina and it is possible that new claims will be filed in the future. In addition, foreign shareholders of several Argentine companies have filed claims before the ICSID (International Centre for Settlement of Investment Disputes) alleging that certain government measures adopted during the country’s 2001 crisis were inconsistent with the fair and equitable treatment standards set forth in various bilateral investment treaties to which Argentina is a party. Since May 2005, the ICSID tribunals have issued several awards against Argentina. Only the cases “CMS v. Argentina”, “Azurix v. Argentina” and “Vivendi v. Argentina” are currently final and unappealable, which decisions required that the Argentine government pay U.S. $133.2 million, U.S. $165.2 million and U.S. $105 million, respectively. As of the date of this annual report, Argentina has not yet paid the amounts referred to above.

On April 30, 2010, Argentina launched a new debt exchange to holders of the securities issued in the 2005 debt exchange and to holders of the securities that were eligible to participate in the 2005 debt exchange (other than brady bonds) to exchange such debt for new securities and, in certain cases, a cash payment. As a result of the 2005 and 2010 exchange offers, Argentina restructured over 91% of the defaulted debt eligible for the 2005 and 2010 exchange offers. The creditors who did not participate in the 2005 or 2010 exchange offers may continue with legal action against Argentina for the recovery of debt, which could adversely affect Argentina’s access to the international capital markets.

Argentina’s past default and its failure to restructure completely its remaining sovereign debt and fully negotiate with the holdout creditors may limit Argentina’s ability to reenter the international capital markets. Litigation initiated by holdout creditors as well as ICSID claims have resulted and may continue to result in judgments and awards against the Argentine government which, if not paid, could prevent Argentina from obtaining credit from multilateral organizations. Judgment creditors have sought and may continue to seek to attach or enjoin assets of Argentina. In addition, various creditors have organized themselves into associations to engage in lobbying and public relations concerning Argentina’s default on its public indebtedness. Such groups have over the years unsuccessfully urged passage of federal and New York state legislation directed at Argentina’s defaulted debt and aimed at limiting Argentina’s access to the U.S. capital markets. Although neither the United States Congress nor the New York state legislature has adopted such legislation, we can make no assurance that legislation or other political actions designed to limit Argentina’s access to capital markets will not take effect.

In April 2010, a Court of New York granted an attachment over reserves of the Argentine Central Bank in the United States requested by creditors of Argentina on the theory that the Central Bank was its alter ego. In July 2011, an appeals court reversed that ruling, stating that the assets of the Central Bank were protected by law. Plaintiffs have petitioned the United States Supreme Court to review the appeals court decision and, as of the date of this annual report, the United States Supreme Court has not ruled if it will hear the case.

As a result of Argentina’s default and the events that have followed it, the Argentine government may not have the financial resources necessary to implement reforms and foster economic growth, which, in turn, could have a material adverse effect on the country’s economy and, consequently, our businesses and results of operations. Furthermore, Argentina’s inability to obtain credit in international markets could have a direct impact on our own ability to access international credit markets to finance our operations and growth, which could adversely affect our results of operations and financial condition and cause the market value of our ADSs and Class B common shares to decline.

Significant fluctuations in the value of the Peso could adversely affect the Argentine economy, which could, in turn adversely affect our results of operations

The devaluation of the Peso in 2002 (a 238% decline against the U.S. Dollar) had a far-reaching negative impact on the financial condition of many businesses and individuals. The devaluation of the Peso had a negative impact on the ability of Argentine businesses to honor their foreign currency-denominated debt, led to very high inflation initially, significantly reduced real wages, had a negative impact on businesses whose success is dependent on domestic market demand, including public utilities and the financial industry, and adversely affected the Argentine government’s ability to honor its foreign debt obligations. If the Peso devalues significantly, the negative effects on the Argentine economy could have adverse consequences to our businesses, our results of operations and the market value of our ADSs.

On the other hand, a substantial increase in the value of the Peso against the U.S. Dollar also presents risks for the Argentine economy, including a reduction in exports. Any such increase could have a negative effect on economic growth and employment, reduce the Argentine public sector’s revenues from collection in real terms and have a material adverse effect on our business our result of operations and the market value of our ADSs as a result of the weakening of the Argentine economy in general.

Measures taken by the Argentine government to address social unrest may adversely affect the Argentine economy and our business and results of operations

During the economic crisis in 2001 and 2002, Argentina experienced social and political turmoil, including civil unrest, riots, looting, nationwide protests, strikes and street demonstrations. Despite the economic recovery and relative stability since 2002, social and political tensions and high levels of poverty and unemployment continue. Future government policies to preempt, or respond to, social unrest may include expropriation, nationalization, forced renegotiation or modification of existing contracts, suspension of the enforcement of creditors’ rights and shareholders’ rights, new taxation policies, including royalty and tax increases and retroactive tax claims, and changes in laws, regulations and policies affecting foreign trade and investment. These policies or significant protests resulting therefrom could destabilize the country and adversely and materially affect the Argentine economy.

In March 2008, the Argentine Ministry of Economy and Production announced the adoption of new taxes on exports of a number of agricultural products. The taxes were to be calculated at incremental rates as the price for the exported products increased, and represented a significant increase in taxes on exports by the agricultural sector in Argentina. The adoption of these taxes met significant opposition from various political and economic groups with ties to the Argentine agricultural sector, including strikes by agricultural producers around the country, roadblocks to prevent the circulation of agricultural goods within Argentina and massive demonstrations in the City of Buenos Aires and other major Argentine cities. Although the Argentine congress did not pass these measures, we cannot assure you that the Argentine government will not reintroduce new export taxes or adopt other similar measures. In addition, further social unrest caused by such measures that could adversely affect the Argentine economy, increased damages to our networks as a result of protesters or illicit activity, which could have a material adverse effect on our financial condition, results of operations and the market value of our ADSs.

Exchange controls and restrictions on capital inflows and outflows may continue to limit the availability of international credit and could threaten the financial system and lead to renewed political and social tensions, adversely affecting the Argentine economy, and, as a result, our business

In 2001 and 2002, Argentina experienced a massive withdrawal of deposits from the Argentine financial system in a short period of time, which precipitated a liquidity crisis within the Argentine financial system and prompted the Argentine government to impose exchange controls and restrictions on the ability of depositors to withdraw their deposits and send funds abroad in an attempt to prevent capital flight and further depreciation of the Argentine Peso. Although some of these restrictions have been suspended, terminated or substantially relaxed, in June 2005 the Argentine government adopted various rules and regulations that established new restrictive controls on capital inflows into the country, including a requirement that for certain funds remitted into Argentina an amount equal to 30% of the funds must be deposited into an account with a local financial institution as a U.S. Dollar deposit for a one-year period without any accrual of interest, benefit or other use as collateral for any transaction. Since October 2011, the Argentine government has strengthened certain restrictions on the sale of foreign currency to non residents in connection with the repatriation of direct investments, and on the creation of foreign assets belonging to residents. See “Exchange Rates” and “Item 10. Exchange Controls.” The Argentine government could impose new exchange controls or restrictions on the movement of capital and take other measures that could limit our ability to access the international capital markets and impair our ability to make interest or principal payments abroad or payments. Argentina may re-impose exchange controls, transfer restrictions or other measures in the future in response to capital flight or a significant depreciation of the Peso.

In the event of a future shock, such as the failure of one or more banks or a crisis in depositor confidence, the Argentine government could impose further exchange controls or transfer restrictions and take other measures that could lead to renewed political and social tensions and undermine the Argentine government’s public finances, which could adversely affect Argentina’s economy and prospects for economic growth, which, in turn, could adversely affect our business and results of operations and the market value of our ADSs. In addition, the Argentine government or the Central Bank may reenact certain restrictions on the transfers of funds abroad, impairing our ability to make dividend payments to holders of the ADSs, which may adversely affect the market value of our ADSs. As of the date of this annual report, however, the transfer of funds abroad to pay dividends is permitted to the extent such dividend payments are made in connection with audited financial statements approved by a shareholders’ meeting.

The nationalization of Argentina’s private pension funds caused an adverse effect in the Argentine capital markets and increased the Argentine government’s interest in certain stock exchange listed companies, such that the Argentine government became a significant shareholder of such companies

In recent years a significant portion of the local demand for securities of Argentine companies came from the Argentine private pension funds. In response to the global economic crisis, in December 2008, by means of Argentine Law No. 26,425, the Argentine Congress unified the Argentine pension and retirement system into a system publicly administered by the Administración Nacional de la Seguridad Social (National Social Security Agency or ANSES), eliminating the pension and retirement system previously administered by private managers. In accordance with the new law, private pension managers transferred all of the assets administered by them under the pension and retirement system to the ANSES. With the nationalization of Argentina’s private pension funds, the local capital markets decreased in size and became substantially concentrated. In addition, the Argentine government became a significant shareholder in many of the country’s public companies. In April 2011, the Argentine government lifted certain restrictions pursuant to which ANSES was prevented from exercising more than 5% of its voting rights in any stock exchange listed company (regardless of the equity interest held by ANSES in such companies). ANSES has publicly stated that it intends to exercise its voting rights in excess of such 5% limit in order to appoint directors in different stock exchange listed companies in which it holds an interest exceeding 5%. ANSES’ interests may differ from those of other investors, and consequently, if ANSES acquires a more prevailing role in any Argentine listed companies in which it owns shares, ANSES’ actions might have an adverse effect on such companies and, to a certain extent, on domestic capital markets. As of the date of this annual report ANSES owns shares representing 20.96% of the capital stock of our subsidiary Emdersa and 25.3% of the capital stock of Edenor.

The Argentine government has stated its intention to exert a stronger influence on the operation of stock exchange listed companies. We cannot assure you that these or other similar actions taken by the Argentine government will not have an adverse effect on the Argentine economy and consequently on our financial condition and results of operations.

The Argentine economy could be adversely affected by economic developments in other global markets

Argentine financial and securities markets are influenced, to varying degrees, by economic and financial conditions in other markets. Although economic conditions can vary from country to country, investors’ perception of the events occurring in one country may substantially affect capital flows to other countries and the value of securities in other countries, including Argentina. The Argentine economy was adversely impacted by the political and economic events that occurred in several emerging economies in the 1990s, including those in Mexico in 1994, the collapse of several Asian economies between 1997 and 1998, the economic crisis in Russia in 1998 and the Brazilian devaluation of its currency in January 1999. In addition, Argentina may be affected by events in the economies of its major regional trading partners, including, for example, currency devaluations caused by the global economic crisis that continue to affect it.

Also, the Argentine economy might be affected by occurring events in developed countries that are its commercial partners or which may have an impact on the global economy. In addition, the global financial crisis that commenced in the last quarter of 2008 has affected and may continue to negatively affect the economies of several countries around the world including Argentina and certain of its trading partners. Developed economies like the United States have sustained some of the most severe effects while some emerging economies like that of China and Brazil have suffered comparatively milder effects. More recently, several European countries, such as Ireland, Greece, Portugal, Spain, the United Kingdom and Italy, have revealed significant macroeconomic imbalances. In addition, on August 5, 2011, Standard & Poor’s Financial Services LLC downgraded the debt instruments issued by the United States and on January 13, 2012, Standard & Poor’s Rating Services downgraded the instruments of nine European countries including France and Italy. Financial markets have reacted adversely curtailing the ability of certain of these countries to refinance their outstanding debt. The impact of this crisis on Argentina could include a reduction in exports and foreign direct investment, a decline in national tax revenues and an inability to access international capital markets, which could adversely affect our business, results of operations and the market value of our ADSs. The realization of any or all of these risk factors, as well as events that may arise in the main regional partners, including members of Mercosur, could have a material adverse effect on the Argentine economy and, indirectly, on our business, financial condition and results of operations and the market value of our ADSs.

The actions taken by the Argentine government to reduce imports may affect our ability to purchase significant capital goods

The Argentine government has recently adopted some initiatives designed to limit the import of goods in order to prevent further deterioration of the Argentine balance of trade. The restriction of imports may limit our ability to purchase capital goods that are necessary for our operations, which may, in turn, adversely affect our business, financial condition and results of operations.

Risks Relating to the Electricity Distribution Sector

The Argentine government has intervened in the electricity sector in the past, and is likely to continue intervening

To address the Argentine economic crisis in 2001 and 2002, the Argentine government adopted the Public Emergency Law and other regulations, which made a number of material changes to the regulatory framework applicable to the electricity sector. These changes severely affected electricity distribution companies and included the freezing of distribution margins, the revocation of adjustment and inflation indexation mechanisms for tariffs and a limitation on charging our customers the increases of certain regulatory charges. In addition, a new price-setting mechanism was introduced in the wholesale electricity market, which had a significant impact on electricity generators and has led to significant price mismatches between participants in our market. The Argentine government continues to intervene in this sector, including granting temporary margin increases, proposing a new social tariff regime for residents of poverty-stricken areas, creating specific charges to raise funds that are transferred to government-managed trust funds that finance investments in distribution infrastructure and mandating investments for the construction of new generation plants and the expansion of existing transmission and distribution networks.

Furthermore, on November 15, 2011, the Secretary of Energy issued Note No.8752/11 (“Note 8752”), which provided that any approval by the provincial governments of increases to the electricity tariffs applicable to end-users as of November 1, 2011 will trigger a proportionate decrease in the federal subsidy available to that end-user in connection with the purchase of electricity. Since the issuance of Note 8752, certain provincial governments have initiated legal proceedings to challenge the jurisdiction of the Secretary of Energy to issue Note 8752, particularly because of the potential chilling effect that this regulation may have on the ability of the provincial governments to increase electricity tariffs. These proceedings have not been resolved as of the date of this annual report.

We cannot assure you that these or other measures that may be adopted by the Argentine government will not have a material adverse effect on our business and results of operations or on the market value of our ADSs, or that the Argentine government will not adopt emergency legislation similar to the Public Emergency Law, or other similar resolutions, in the future that may further increase our regulatory obligations, including increased taxes, unfavorable alterations to our tariff structures and other regulatory obligations, compliance with which would increase our costs and have a direct negative impact on our results of operations and cause the market value of our ADSs and Class B common shares to decline.

Electricity distributors were severely affected by the emergency measures adopted during the economic crisis, many of which remain in effect

Distribution tariffs include a regulated margin that is intended to cover the costs of distribution and provide an adequate return over the distributor’s asset base. Under the Convertibility Regime, distribution tariffs were calculated in U.S. Dollars and distribution margins were adjusted periodically to reflect variations in U.S. inflation indexes. Pursuant to the Public Emergency Law, in January 2002 the Argentine government froze all distribution margins, revoked all margin adjustment provisions in distribution concessions and converted distribution tariffs into Pesos at a rate of Ps. 1.00 per U.S. $ 1.00. These measures, coupled with the effect of high inflation and the devaluation of the Peso, led to a decline in distribution revenues in real terms and an increase of distribution costs in real terms, which could no longer be recovered through adjustments to the distribution margin. This situation, in turn, led many public utility companies, including us and other important distribution companies, to suspend payments on their financial debt (which continued to be denominated in U.S. Dollars despite the pesification of revenues), effectively preventing these companies from obtaining further financing in the domestic or international credit markets and making additional investments. Although the Argentine government has recently granted temporary relief to some distribution companies, including an increase in distribution margins and a temporary cost adjustment mechanism, distribution companies are currently involved in discussions with regulators on additional, permanent measures needed to adapt the current tariff scheme to the post-crisis situation of this sector. We cannot assure you that these measures will be adopted or implemented or that, if adopted, they will be sufficient to address the structural problems created for us by the economic crisis and its aftermath. If we become unable to cover the costs of distribution or receive an adequate return on our asset on our base, our results of operations may be adversely affected.

Electricity demand may be affected by tariff increases, which could lead distribution companies, such as us, to record lower revenues

During the 2001 and 2002 economic crisis, electricity demand in Argentina decreased due to the decline in the overall level of economic activity and the deterioration in the ability of many consumers to pay their electricity bills. In the years following the 2001 and 2002 economic crisis electricity demand experienced significant growth, increasing at an estimated average of approximately 5.0% per annum from 2003 through 2011. This increase in demand reflects the relative low cost, in real terms, of electricity to consumers due to the freeze of distribution margins and the elimination of the inflation adjustment provisions in distribution concessions coupled with the devaluation of the Peso and inflation. The executive branch of the Argentine government granted temporary increases in distribution margins, and we are currently negotiating further increases and adjustments to our tariff schemes with the Argentine government. Although the recent increases in distribution margins, which increased the cost of electricity to residential customers, have not had a significant negative effect on demand, we cannot make any assurances that these increases or any future increases in the relative cost of electricity will not have a material adverse effect on electricity demand or a decline in collections from customers. Further, in November 2011, the Argentine government announced a cut in subsidies for electricity granted to certain customers that are presumably in a position to face its real cost. These measures are currently in an early stage of implementation and we cannot ascertain as of the date of this report what the effect on our revenues could be. See “Item 5. Operating and Financial Review and Prospects—Factors Affecting our Results of Operations—Recognition of Cost of Electric Power Purchases.” However, we cannot assure you that these measures or any future measures (including increases on tariffs for residential users) will not lead distribution companies, such as us, to record lower revenues and results of operations than currently anticipated, which may, in turn, have a material adverse effect on the market value of our ADSs.

If we experience continued energy shortages in the face of growing demand for electricity, our ability to deliver electricity to our customers could be adversely affected, which could result in customer claims, material penalties and decreased results of operations

In recent years, the condition of the Argentine electricity market has provided little incentive to generators to further invest in increasing their generation capacity, which would require material long-term financial commitments. As a result, Argentine electricity generators are currently operating at near full capacity and may not be able to guarantee the supply of electricity to distribution companies, such as us, which, in turn, could limit the ability of these companies, including us, to provide electricity to customers, and could lead to a decline in growth of such companies. Under Argentine law, distribution companies, such as us, are responsible to their customers for any disruption in the supply of electricity. To date, the Argentine authorities have not been called upon to decide under which conditions energy shortages may constitute force majeure. In the past, however, the Argentine authorities have taken a restrictive view of force majeure and have recognized the existence of force majeure only in limited circumstances, such as internal malfunctions at the customer’s facilities, extraordinary meteorological events (such as major storms) and third-party work in public thoroughfares. As a result, we could face customer claims and fines and penalties for service disruptions caused by energy shortages unless the relevant Argentine authorities determine that energy shortages constitute force majeure, which claims, fines and penalties could have a materially adverse effect on our financial condition and results of operations, and cause the market value of our ADSs and Class B common shares to decline.

Risks Relating to Our Business

Failure or delay to negotiate further improvements to our tariff structure, including increases in our distribution margin, and/or to have our tariff adjusted to reflect increases in our distribution costs in a timely manner, could have a material adverse effect on our capacity to perform our financial and commercial obligations. As a result, there is substantial doubt with respect to the ability of the Company to continue as a going concern.

We are currently engaged in RTI with the ENRE, as required by the agreement entered into with the Argentine government in February 2006 relating to the adjustment and renegotiation of the terms of our concession (the “Adjustment Agreement”) but the timeline for completing this process and the favorability to us of the final resolution are both uncertain.

The Adjustment Agreement currently contemplates a cost adjustment mechanism for the transition period during which the RTI is being conducted. This mechanism, known as the Cost Monitoring Mechanism (CMM), requires the ENRE to review our actual distribution costs every six months (in May and November of each year) and adjust our distribution margins to reflect variations of 5% or more in our distribution cost base. We may also request that the ENRE apply the CMM at any time that the variation in our distribution cost base is at least 10% or more. Any adjustments, however, are subject to the ENRE’s assessment of variations in our costs, and we cannot guarantee that the ENRE will approve adjustments that are sufficient to cover our actual incremental costs. In the past, even when the ENRE has approved adjustments to our tariffs, there has been a lag between when we actually experience increases in our distribution costs and when we receive increased revenues following the corresponding adjustments to our distribution margins pursuant to the CMM. Despite the adjustment we were granted under the CMM in October 2007 and July 2008, we cannot assure you that we will receive similar adjustments in the future. As of the date of this annual report we have requested eight increases under the CMM beginning in May 2008, which increases are still being reviewed by the ENRE. Under the terms of the Adjustment Agreement, these eight increases should have been approved in May 2008, November 2008, May 2009, November 2009, May 2010, November 2010, May 2011 and November 2011.

During the year ended December 31, 2011, we recorded a significant decrease in net income and operating income, and our working capital and liquidity levels were negatively affected, primarily as a result of the delay in obtaining a tariff increase and in having our tariff adjusted to reflect increases in our distribution costs, coupled with a constant increase in operating costs to maintain adequate service levels.

If we are not able to recover all of the incremental costs contemplated by the increase requests pursuant to the CMM and all such future cost increases or there is a significant lag time between when we incur the incremental costs and when we receive increased revenues, and/or if we are not successful in achieving a satisfactory re-negotiation of our tariff structure, we may be unable to comply with our financial and commercial obligations, we may suffer liquidity shortfalls and we may need to restructure our debt to ease our financial condition, any of which individually or in the aggregate, would have a material adverse effect on our business and results of operations and may cause the value of our ADSs to decline. As a result, there is substantial doubt with respect to the ability of the Company to continue as a going concern and our auditors’ report included elsewhere in this annual report contains an explanatory paragraph expressing substantial doubt as to our ability to continue as a going concern.

We have prepared our annual financial statements for the fiscal year ended December 31, 2011 included herein, assuming that we will continue as a going concern. Our independent auditors, PWC, issued a report dated April 26, 2012 on our financial statements as of and for the years ended December 31, 2011 and 2010, which contains an explanatory paragraph expressing substantial doubt as to our ability to continue as a going concern. As discussed in Notes 2 and 8.c to the financial statements, the delays in obtaining tariff increases, recognition of cost adjustments requested by the Company in accordance with the terms of the Adjustment Agreement and the continuous increase in operating expenses have affected significantly the economic and financial position of the Company and have raised substantial doubt with respect to our ability to continue as a going concern. Management's plans in response to these matters are also described in Note 2. However, our financial statements as of and for the year ended December 31, 2011 and 2010 do not include any adjustments or reclassifications that might result from the outcome of this uncertainty. See Item 18: “Financial Statements.”

The goal of the RTI is to achieve a comprehensive revision of our tariff structure, including further increases in our distribution margins and periodic adjustments based on changes in our cost base, to provide us with an adequate return on our asset base. Although we believe the RTI will result in a new tariff structure, we cannot assure you that the RTI will conclude in a timely manner or at all, or that the new tariff structure will effectively cover all of our costs or provide us with an adequate return on our asset base. Moreover, the RTI could result in the adoption of an entirely new regulatory framework for our business, with additional terms and restrictions on our operations and the imposition of mandatory investments. We also cannot predict whether a new regulatory framework will be implemented and what terms or restrictions could be imposed on our operations.

Our distribution tariffs may be subject to challenge by Argentine consumer and other groups

In November 2006, two Argentine consumer associations, Asociación Civil por la Igualdad y la Justicia (ACIJ) and Consumidores Libres Cooperativa Limitada de Provisión de Servicios de Acción Comunitaria, brought an action against us and the Argentine government before a federal administrative court seeking to block the ratification of the Adjustment Agreement on the grounds that the approval mechanism was unconstitutional. In March 2007, the federal administrative court dismissed these claims and ruled in our favor on the grounds that the adoption of Executive Decree No. 1957/06, which ratified the Adjustment Agreement, rendered this action moot. The ACIJ appealed this decision in April 2007, and the appeal was decided in our favor. However, in April 2008, the ACIJ filed another complaint challenging the procedures utilized by the Argentine Congress in approving the Adjustment Agreement, to which we timely replied. In addition, in 2008, the defensor del pueblo (Public Ombudsman) filed a claim opposing the resolutions establishing the tariff schedule, effective as of October 1, 2008, and naming us as defendant. On January 27, 2009, the ENRE notified us of a preliminary injunction, as a result of the Ombudsman’s claim, pursuant to which we were ordered to refrain from cutting the energy supply to customers challenging the October 2008 tariff increase until a decision is reached with respect to the claim. This injunction has been appealed by us and the Argentine government, the resolution of which is still pending as of the date of this annual report. In addition, in December 2009, another Argentine consumer association, Unión de Usuarios y Consumidores, brought an action against us and the Argentine government seeking to annul certain retroactive tariff increases. In November 2010, the relevant court upheld the claim. We appealed the court’s order and requested that it be stayed pending a decision on the appeal. In December 2010, the court stayed its order pending a decision on the appeal. On June 1, 2011, the Administrative Court of Appeals (Cámara Nacional de Apelaciones en lo Contencioso Administrativo Federal – Sala V) overturned the judgment of the lower administrative court. The Argentine consumer association may file an extraordinary appeal (“Recurso Extraordinario Federal”) to have the case tried by the Argentine Supreme Court. As of the date of this annual report, to our knowledge, the Argentine consumer association has not filed such extraordinary appeal. We cannot make assurances regarding how these complaints will be resolved (nor, in the action brought by Unión de Usuarios y Consumidores in December 2009, whether the plaintiff may decide to file an extraordinary appeal as described above) nor can we make assurances that other actions or requests for injunctive relief will not be brought by these or other groups seeking to reverse the adjustments we have obtained or to block any further adjustments to our distribution tariffs. If these legal challenges are successful and prevent us from implementing tariff adjustments granted by the Argentine government, we could face a decline in collections from our customers, and a decline in our results of operations, which may have a material adverse effect on our financial condition and the market value of our ADSs.

We have been, and may continue to be, subject to fines and penalties that could have a material adverse effect on our financial condition and results of operations

We operate in a highly regulated environment and have been and in the future may continue to be subject to significant fines and penalties by regulatory authorities, including for reasons outside our control, such as service disruptions attributable to problems at generation facilities or in the transmission network that result in a lack of electricity supply. After 2001, the amount of fines and penalties imposed on our company has increased significantly, which we believe is mainly due to the economic and political environment in Argentina following the 2001 and 2002 economic crisis. Although the Argentine government has agreed to forgive a significant portion of our accrued fines and penalties pursuant to the Adjustment Agreement and to allow us to repay the remaining balance over time, this forgiveness and repayment plan is subject to a number of conditions, including compliance with quality of service standards, reporting obligations and required capital investments. As of December 31, 2011, our consolidated accrued fines and penalties totaled Ps. 542.2 million (taking into account our adjustment to fines and penalties following the ratification of the Adjustment Agreement). If we fail to comply with any of these conditions, the Argentine government may seek to obtain payment of these fines and penalties by our company. In addition, we cannot assure you that we will not incur material fines in the future, which could have a material adverse effect on our financial condition, our results of operations and the market value of our ADSs.

If we are unable to control our energy losses, our results of operations could be adversely affected

Our concession does not allow us to pass through to our customers the cost of additional energy purchased to cover any energy losses that exceed the loss factor contemplated by our concession, which is, on average, 10%. As a result, if we experience energy losses in excess of those contemplated by our concession, we may record lower operating profits than we anticipate. Prior to the 2001 and 2002 economic crisis, we had been able to reduce the high level of energy losses experienced at the time of the privatization to the levels contemplated (and reimbursed) under our concession. However, during the 2001 and 2002 economic crisis and during the years ended December 31, 2009 and 2010, our level of energy losses, particularly our non-technical losses, started to grow again, in part as a result of the increase in poverty levels and, with it, the number of delinquent accounts and fraud. Although we have been able to reduce energy losses in recent periods, these losses continue to exceed the 10% average loss factor in the concession, and based on the current economic turmoil, we do not expect these losses to decrease in the near term. Our energy losses amounted to 12.6% in 2011, 12.5% in 2010, 11.9% in 2009 and 10.8% in 2008. We cannot assure you that our energy losses will not increase again in future periods, which may lead us to have lower margins and could adversely affect our financial condition, our results of operations and the market value of our ADSs.

The Argentine government could foreclose on the pledge of our Class A common shares under certain circumstances, which could have a material adverse effect on our business and financial condition

Pursuant to our concession and the provisions of the Adjustment Agreement, the Argentine government has the right to foreclose on the pledge of our Class A common shares and sell these shares to a third party buyer if:

	•	the fines and penalties we incur in any given year exceed 20% of our gross energy sales, net of taxes (which corresponds to our energy sales);

	•	we repeatedly and materially breach the terms of our concession and do not remedy these breaches upon the request of the ENRE;

	•	our controlling shareholder, EASA, creates any lien or encumbrance over our Class A common shares (other than the existing pledge in favor of the Argentine government);

	•	we or EASA obstruct the sale of Class A common shares at the end of any management period under our concession;

	•	EASA fails to obtain the ENRE’s approval in connection with the disposition of our Class A common shares;

	•	our shareholders amend our articles of incorporation or voting rights in a way that modifies the voting rights of the Class A common shares without the ENRE’s approval; or

	•	We, or any existing shareholders or former shareholders of EASA who has brought a claim against the Argentine government in the ICSID does not desist from its ICSID claims following completion of the RTI and the approval of a new tariff regime.

In 2011, the fines and penalties imposed on us by the ENRE amounted to Ps. 81.1 million, which represented 3.6% of our energy sales. See “Item 4. Information on the Company —Our Concession—Fines and Penalties.”

If the Argentine government were to foreclose on the pledge of our Class A common shares, pending the sale of those shares, the Argentine government would also have the right to exercise the voting rights associated with such shares. In addition, the foreclosure by the Argentine government on the pledge of our Class A common shares may be deemed to constitute a change of control under the terms of our Senior Notes issued in October 2007, October 2010 and April 2011, which would require us to offer to repurchase all such debt at its face value. We cannot assure you that we will have sufficient funds or access to financing to effect such repurchases. If the Argentine government forecloses on the pledge of our Class A common shares, our results of operations and financial condition could be significantly affected and the market value of our ADSs could be affected too.

Default by the Argentine government could lead to termination of our concession, and have a material adverse effect on our business and financial condition

If the Argentine government breaches its obligations in such a way that we cannot comply with our obligation under our concession or in such a way that our service is materially affected, we can request the termination of our concession, after giving the Argentine government 90 days’ prior notice. Upon termination of our concession, all our assets used to provide electricity distribution service would be transferred to a new state-owned company to be created by the Argentine government, whose shares would be sold in an international public bidding procedure. The amount obtained in such bidding would be paid to us, net of the payment of any debt owed by us to the Argentine government, plus compensation established as a percentage of the bidding price, ranging from 10% to 30% depending on the management period in which the sale occurs. Any such default could have a material adverse effect on our business and financial condition.

We employ a largely unionized labor force and could be subject to an organized labor action, including work stoppages that could have a material effect on our business

As of December 31, 2011, approximately 82% of our employees were union members. Although our relations with unions are currently stable and we have had an agreement in place with the two unions representing our employees since 1995, we cannot assure you that we will not experience work disruptions or stoppages in the future, which could have a material adverse effect on our business and revenues, especially in light of the social tensions generated in Argentina by the economic crisis. We cannot assure you that we will be able to negotiate salary agreements on the same terms as those currently in effect, or that we will not be subject to strikes or work stoppages before or during the negotiation process. If we are unable to negotiate salary agreements or if we are subject to strikes or work stoppages, our results of operations, financial condition and the market value of our ADSs could be materially adversely affected.

As of December 31, 2011, approximately 84% of Eden employees were union members.

We might incur material labor liabilities in connection with our outsourcing that could have an adverse effect on our business and results of operation

We outsource a number of activities related to our business to third party contractors in order to maintain a flexible cost base. As of December 31, 2011, we had approximately 2,796 third-party employees under contract. Although we have very strict policies regarding compliance with labor and social security obligations by our contractors, we are not in a position to ensure that contractors’ employees will not initiate legal actions to seek indemnification from us based upon a number of judicial rulings issued by labor courts in Argentina recognizing joint and several liability between the contractor and the entity to which it is supplying services under certain circumstances. We cannot make any assurances that such proceedings will not be brought against us or that the outcome of such proceedings would be favorable to us. If we were to incur material labor liabilities in connection with our outsourcing, such liability could have an adverse effect on our financial condition, our results of operations and the market value of our ADSs.

We currently are not able to effectively hedge our currency risk in full and, as a result, a devaluation of the Peso may have a material adverse effect on our results of operations and financial condition

Our revenues are collected in Pesos pursuant to tariffs that are not indexed to the U.S. Dollar, while a significant portion of our existing financial indebtedness is denominated in U.S. Dollars, which exposes us to the risk of loss from devaluation of the Peso. We currently seek to hedge this risk in part by converting a portion of our excess cash denominated in Pesos into U.S. Dollars and investing those funds outside Argentina, as permitted by applicable Argentine Central Bank regulations and entering in currency forward contracts, but we continue to have substantial exposure to the U.S. Dollar. We cannot assure you that the Argentine government will continue to allow us to access the market to acquire U.S. Dollars in the manner we have done so to date. Although we may also seek to enter into further hedging transactions to cover all or a part of our remaining exposure, we have not been able to hedge all of our exposure to the U.S. Dollar on terms we consider viable for our company. If we continue to be unable to effectively hedge all or a significant portion of our currency risk exposure, a devaluation of the Peso may significantly increase our debt service burden, which, in turn, may have a material adverse effect on our financial condition and results of operations.

In the event of an accident or event not covered by our insurance, we could face significant losses that could materially adversely affect our business and results of operations

As of December 31, 2011, our physical assets were insured for up to U.S. $734.4 million. However, we do not carry insurance coverage for losses caused by our network or business interruption, including loss of our concession. See “Item 4. Information on the Company—Our Business—Insurance.” Although we believe our insurance coverage is commensurate with standards for the distribution industry, no assurance can be given of the existence or sufficiency of risk coverage for any particular risk or loss. If an accident or other event occurs that is not covered by our current insurance policies, we may experience material losses or have to disburse significant amounts from our own funds, which may have a material adverse effect on our net profits and our overall financial condition and on the market value of our ADSs.

A substantial number of our assets are not subject to attachment or foreclosure and the enforcement of judgments obtained against us by our shareholders may be substantially limited

A substantial number of our assets are essential to the public service we provide. Under Argentine law, as interpreted by the Argentine courts, assets which are essential to the provision of a public service are not subject to attachment or foreclosure, whether as a guarantee for an ongoing legal action or to allow for the enforcement of a legal judgment. Accordingly, the enforcement of judgments obtained against us by our shareholders may be substantially limited to the extent our shareholders seek to attach those assets to obtain payment on their judgment.

If our controlling shareholder fails to meet its debt service obligations, its creditors may take measures that could have a material adverse effect on our results of operations

In July 2006, EASA completed a comprehensive restructuring of all of its outstanding financial indebtedness, which had been in default since 2002. In connection with this restructuring, EASA issued approximately U.S. $85.3 million in U.S. Dollar-denominated notes in exchange for the cancellation of approximately 99.94% of its outstanding financial debt. Since EASA’s ability to meet its debt service obligations under these notes depends largely on our ability to pay dividends or make distributions or payments to EASA, our failure to do so could result in EASA becoming subject to actions by its creditors, including the attachment of EASA’s assets and petitions for involuntary bankruptcy proceedings. If EASA’s creditors were to attach our Class A common shares held by EASA, the Argentine government would have the right under our concession to foreclose on the pledge of our Class A common shares held by the Argentine government, which would trigger a repurchase obligation under the terms of our restructured debt and our Senior Notes issued in October 2007, October 2010 and April 2011, and have a material adverse effect on our results of operations and financial condition.

Our exclusive right to distribute electric energy in our service area may be adversely affected by technological or other changes in the energy distribution industry, which would have a material adverse effect on our business

Although our concession grants us the exclusive right to distribute electric energy within our service area, this exclusivity may be revoked in whole or in part if technological developments would make it possible for the energy distribution industry to evolve from its present condition as a natural monopoly into a competitive business. In no case does the complete or partial revocation of our exclusive distribution rights entitle us to claim or to obtain reimbursement or indemnity. Although, to our knowledge, there are no current projects to introduce new technologies in the medium- or long-term which might reasonably modify the composition of the electricity distribution business, we cannot assure you that future developments will not enable competition in our industry that would adversely affect the exclusivity right granted by our concession. Any total or partial loss of our exclusive right to distribute electricity within our service area would likely lead to increased competition and result in lower revenues, which could have a material adverse effect on our financial condition, our results of operations and the market value of our ADSs.

Our acquisition of Emdersa and Aeseba and the subsequent divestiture of the subsidiaries of Emdersa are subject to perfunctory approval by the Argentine Antitrust Commission and, in some cases, by the ENRE and Edenor may fail to realize the anticipated benefits of the acquisitions and divestitures, and the integration of these companies with our distribution operations may present significant challenges.

In March 2011, we acquired Emdersa and Aeseba and several related companies, which are now our subsidiaries. Since then, we have decided to divest the subsidiaries of Emdersa. These acquisitions and divestitures are subject to perfunctory approval by the Argentine Antitrust Commission and, in some cases, by the ENRE. Although we have submitted all required documentation to the Argentine Antitrust Commission and to the ENRE, we cannot assure you that the Argentine Antitrust Commission or ENRE, as applicable, will authorize such acquisitions and, therefore, the acquisitions may be revoked or the divestitures may never be perfected if the relevant approvals are not granted.

In addition, we may face significant challenges in integrating Aeseba’s operations and streamlining procedures in a timely and efficient manner while retaining key personnel from the acquired company. The integration of the assets of Aeseba will be costly, complex and time-consuming, and will require substantial management attention. These costs could be greater than we currently anticipate, which could reduce our profitability. The integration of this business could also disrupt the operation of our current business and Aeseba’s existing business, or result in additional administrative procedures or regulatory oversight. It could also adversely affect our and Aeseba’s ability to maintain relationships with customers, suppliers, employees and others with whom we may have business dealings. If we were to incur significant integration cost overruns or if the proposed integration would materially disrupt our existing business, this could have an adverse effect on our financial condition, our results of operations and the market value of our ADSs.

Because our financial statements are prepared under Argentine GAAP, which differs from US GAAP and IFRS with respect to corporate disclosure and accounting rules, information about us may not be as detailed or comprehensive as that of companies reporting under US GAAP or IFRS, including that of companies in the United States

Our financial statements are prepared in Pesos and in accordance with Argentine GAAP. Our financial statements under Argentine GAAP may not provide you with the information you would have received if our financial statements were prepared under U.S. GAAP or under IFRS. Publicly available information about public companies in Argentina is generally less detailed and not as frequently updated as the information that is regularly published by or about listed companies in the United States or European markets. Furthermore, there is a less extensive regulation of the Argentine securities markets and of the activities of the investors in these markets as compared to the securities markets in the United States, European markets and certain other international financial markets. Argentine GAAP differs in certain significant respects from U.S. GAAP, SEC rules and regulations, and IFRS.

The Company is obligated to adopt IFRS as from the fiscal year beginning on January 1, 2012. See “Item 5. Operating and Financial Review and Prospects—Critical Accounting Policies—Adoption of IFRS.” On April 27, 2010, the Company’s Board of Directors approved a specific implementation plan pursuant to the CNV’s General Resolution No. 562/09. The first annual and quarterly financial statements prepared by the Company pursuant to IFRS will be those corresponding to the year ended December 31, 2012 and the quarterly period ended March 31, 2012, respectively. As of the date of this annual report, the Company has reached certain preliminary conclusions regarding the principal impacts of the implementation of IFRS by the Company. The effects of the adoption of IFRS and the reconciliations between the Argentine GAAP and IFRS are included in note 22 to the audited consolidated financial statements.

Risks relating to ADSs and our Class B common shares

Restrictions on the movement of capital out of Argentina may impair the ability of holders of ADRs to receive dividends and distributions on, and the proceeds of any sale of, the Class B common shares underlying the ADSs

The Argentine government may impose restrictions on the conversion of Argentine currency into foreign currencies and on the remittance to foreign investors of proceeds from their investments in Argentina. Argentine law currently permits the Argentine government to impose these kinds of restrictions temporarily in circumstances where a serious imbalance develops in Argentina’s balance of payments or where there are reasons to foresee such an imbalance. Beginning in December 2001, the Argentine government implemented an unexpected number of monetary and foreign exchange control measures that included restrictions on the free disposition of funds deposited with banks and on the transfer of funds abroad, including dividends, without prior approval by the Central Bank, some of which are still in effect. Among the restrictions that are still in effect are those relating to the payment prior to maturity of the principal amount of loans, bonds or other securities owed to non-Argentine residents, the requirement for Central Bank approval prior to acquiring foreign currency for certain types of investments and the requirement that 30% of certain types of capital inflows into Argentina be deposited in a non-interest-bearing account in an Argentine bank for a period of one year. Although the transfer of funds abroad in order to pay dividends no longer requires Central Bank approval to the extent such dividend payments are made in connection with audited financial statements approved by a shareholders’ meeting, restrictions on the movement of capital to and from Argentina such as those that previously existed could, if reinstated, impair or prevent the conversion of dividends, distributions, or the proceeds from any sale of shares, as the case may be, from Pesos into U.S. Dollars and the remittance of such U.S. Dollars abroad. We cannot assure you that the Argentine government will not take similar measures in the future. In such a case, the depositary for the ADSs may hold the Pesos it cannot otherwise convert for the account of the ADS holders who have not been paid. Nonetheless, the adoption by the Argentine government of restrictions on the movement of capital out of Argentina may affect the ability of our foreign shareholders and holders of ADSs to obtain the full value of their shares and ADSs and may adversely affect the market value of our ADSs.

Our ability to pay dividends is limited

In accordance with Argentine corporations law, we may only pay dividends in Pesos out of our retained earnings, if any, as set forth in our audited consolidated financial statements prepared in accordance with Argentine GAAP. Our ability to pay dividends, however, is further restricted in accordance with the terms of the Adjustment Agreement, pursuant to which we have agreed not to pay dividends without the ENRE’s prior approval until we complete the RTI. We cannot predict with any certainty when this process will be completed.

Our shareholders’ ability to receive cash dividends may be limited

Our shareholders’ ability to receive cash dividends may be limited by the ability of the depositary to convert cash dividends paid in Pesos into U.S. Dollars. Under the terms of our deposit agreement with the depositary for the ADSs, the depositary will convert any cash dividend or other cash distribution we pay on the common shares underlying the ADSs into U.S. Dollars, if it can do so on a reasonable basis and can transfer the U.S. Dollars to the United States. If this conversion is not possible or if any government approval is needed and cannot be obtained, the deposit agreement allows the depositary to distribute the foreign currency only to those ADS holders to whom it is possible to do so. If the exchange rate fluctuates significantly during a time when the depositary cannot convert the foreign currency, shareholders may lose some or all of the value of the dividend distribution.

Under Argentine law, shareholder rights may be fewer or less well defined than in other jurisdictions

Our corporate affairs are governed by our by-laws and by Argentine corporate law, which differ from the legal principles that would apply if we were incorporated in a jurisdiction in the United States, such as the States of Delaware or New York, or in other jurisdictions outside Argentina. In addition, the rights of holders of the ADSs or the rights of holders of our common shares under Argentine corporations law to protect their interests relative to actions by our board of directors may be fewer and less well-defined than under the laws of those other jurisdictions. Although insider trading and price manipulation are illegal under Argentine law, the Argentine securities markets are not as highly regulated or supervised as the U.S. securities markets or markets in some other jurisdictions. In addition, rules and policies against self-dealing and regarding the preservation of shareholder interests may be less well-defined and enforced in Argentina that in the United States, putting holders of our common shares and ADSs at a potential disadvantage.

Holders of ADSs may be unable to exercise voting rights with respect to the Class B common shares underlying the ADSs at our shareholders’ meetings

Shares underlying the ADSs are held by the depositary in the name of the holder of the ADS. As such, we will not treat holders of ADSs as shareholders and, therefore, holders of ADSs will not have shareholder rights. The depositary will be the holder of the common shares underlying the ADSs and holders may exercise voting rights with respect to the Class B common shares represented by the ADSs only in accordance with the deposit agreement relating to the ADSs. There are no provisions under Argentine law or under our by-laws that limit the exercise by ADS holders of their voting rights through the depositary with respect to the underlying Class B common shares. However, there are practical limitations on the ability of ADS holders to exercise their voting rights due to the additional procedural steps involved in communicating with these holders. For example, holders of our common shares will receive notice of shareholders’ meetings through publication of a notice in an official gazette in Argentina, an Argentine newspaper of general circulation and the daily bulletin of the Buenos Aires Stock Exchange, and will be able to exercise their voting rights by either attending the meeting in person or voting by proxy. ADS holders, by comparison, do not receive notice directly from us. Instead, in accordance with the deposit agreement, we provide the notice to the depositary. If we ask it to do so, the depositary will mail to holders of ADSs the notice of the meeting and a statement as to the manner in which instructions may be given by holders. To exercise their voting rights, ADS holders must then instruct the depositary as to voting the Class B common shares represented by their ADSs. Due to these procedural steps involving the depositary, the process for exercising voting rights may take longer for ADS holders than for holders of Class B common shares and Class B common shares represented by ADSs may not be voted as the holders of ADSs desire. Class B common shares represented by ADSs for which the depositary fails to receive timely voting instructions may, if requested by us, be voted at the corresponding meeting either in favor of the proposal of the board of directors or, in the absence of such a proposal, in accordance with the majority.

Our shareholders may be subject to liability for certain votes of their securities

Because we are a limited liability corporation, our shareholders are not liable for our obligations. Shareholders are generally liable only for the payment of the shares they subscribe. However, shareholders who have a conflict of interest with us and who do not abstain from voting at the respective shareholders’ meeting may be liable for damages to us, but only if the transaction would not have been approved without such shareholders’ votes. Furthermore, shareholders who willfully or negligently vote in favor of a resolution that is subsequently declared void by a court as contrary to the law or our by-laws may be held jointly and severally liable for damages to us or to other third parties, including other shareholders.

Item 18.

Financial Statements

Reference is made to pages F-1 to F-134 of this annual report.

Item 19.

Exhibits

Documents filed as exhibits to this annual report:

1.1	Estatutos sociales (corporate bylaws) of Empresa Distribuidora y Comercializadora Norte S.A. (English translation) (previously filed as Exhibit 3.1 to Edenor’s Registration Statement on Form F-1 (File No. 333-141894) on April 4, 2007 and incorporated by reference herein.)

2.1	Form of Deposit Agreement among Empresa Distribuidora y Comercializadora Norte S.A., The Bank of New York, as depositary, and the Holders from time to time of American Depositary Shares issued thereunder, including the form of American Depositary Receipts (previously filed as Exhibit 4.1 to Edenor’s Amendment No. 2 to Registration Statement on Form F-1 (File No. 333-141894) on April 20, 2007 and incorporated by reference herein.)

2.2	Indenture dated April 24, 2006, between Empresa Distribuidora y Comercializadora Norte S.A., as Issuer, and The Bank of New York, as Trustee, Co-Registrar and Paying Agent, and Banco Santander Río S.A., as Registrar, Transfer and Paying Agent in Argentina and Representative of the Trustee in Argentina (previously filed as Exhibit 2.2 to Edenor’s Annual Report on Form 20-F (File No. 001-33422) on June 26, 2008 and incorporated by reference herein).

2.3	Indenture dated October 9, 2007, between Empresa Distribuidora y Comercializadora Norte S.A., as Issuer, and The Bank of New York, as Trustee, Co-Registrar and Paying Agent, and Banco Santander Río S.A., as Registrar, Transfer and Paying Agent in Argentina and Representative of the Trustee in Argentina (previously filed as Exhibit 2.3 to Edenor’s Annual Report on Form 20-F (File No. 001-33422) on June 26, 2008 and incorporated by reference herein).

2.4	Registration Rights Agreement, dated October 9, 2007, between Empresa Distribuidora y Comercializadora Norte S.A. and Citigroup Global Markets Inc. and Deutsche Bank Securities Inc. as Representatives of the Initial Purchasers (previously filed as Exhibit 2.4 to Edenor’s Annual Report on Form 20-F (File No. 001-33422) on June 26, 2008 and incorporated by reference herein).

2.5	Indenture dated October 25, 2010, between Empresa Distribuidora y Comercializadora Norte S.A., as Issuer, and The Bank of New York, as Trustee, Co-Registrar and Paying Agent, and Banco Santander Río S.A., as Registrar, Transfer and Paying Agent in Argentina and Representative of the Trustee in Argentina.

8.1	List of Subsidiaries of Empresa Distribuidora y Comercializadora Norte S.A.

12.1	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

12.2	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

13.1	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Index to the consolidated financial statements

Audited Consolidated Financial Statements		Page

Report of Independent Registered Public Accounting Firm		F-2

Consolidated Balance Sheets as of December 31, 2011 and 2010		F-4

Consolidated Statements of Operations for the years ended December 31, 2011, 2010 and 2009		F-5

Consolidated Statements of Changes in Shareholder’s Equity for the years ended December 31, 2011, 2010 and 2009		F-6

Consolidated Statements of Cash Flows for the years ended December 31, 2011, 2010 and 2009		F-7

Notes to the Consolidated Financial Statements		F-8

F-1

INDEPENDENT AUDITORS’ REPORT

a) Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Empresa Distribuidora y Comercializadora Norte

Sociedad Anónima (Edenor S.A.)

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, of changes in shareholders’ equity and of cash flows present fairly, in all material respects, the financial position of Empresa Distribuidora y Comercializadora Norte Sociedad Anónima (Edenor S.A.) (hereinafter, Edenor S.A.) and its subsidiaries at December 31, 2011 and 2010, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2011 in conformity with accounting principles generally accepted in Argentina. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2011, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's management is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control Over Financial Reporting appearing under Item15 to the Form 20-F. Our responsibility is to express opinions on these financial statements and on the Company's internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Notes 2 and 8.c to the financial statements, the delay in obtaining tariff increases, the cost adjustments recognition (“MMC”) requested in the presentations made until now by the Company in accordance with the terms of the Adjustment Agreement (“Acta Acuerdo”) and the continuous increase in operating expenses significantly affected the economic and financial position of the Company that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Accounting principles generally accepted in Argentina vary in certain significant respects from accounting principles generally accepted in the United States of America. Information relating to the nature and effect of such differences is presented in Note 32 to the consolidated financial statements.

F-2

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As described in Management’s Annual Report on Internal Control Over Financial Reporting, appearing under Item 15, management has excluded Aeseba, Emdersa and their respective subsidiaries from its assessment of internal control over financial reporting as of December 31, 2011 because these subsidiaries were acquired by the Company in a purchase business combination during 2011. We have also excluded Aeseba, Emdersa and their respective subsidiaries from our audit of internal control over financial reporting. Aeseba, Emdersa and their respective subsidiaries are subsidiaries whose total combined assets and total combined revenues represent Ps. 447.4 million and Ps. 1,284.0 million, respectively, of the total consolidated financial statement amounts as of and for the year ended December 31, 2011.

Autonomous City of Buenos Aires, April 26, 2012.

PRICE WATERHOUSE & CO. S.R.L.

Andrés Suarez (Partner)

F-3

EMPRESA DISTRIBUIDORA Y COMERCIALIZADORA NORTE S.A. (EDENOR S.A.)

CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2011 AND 2010

(stated in thousands of pesos)

	2011			2010
CURRENT ASSETS
Cash and banks (Note 26)		23,445			8,611
Investments (Note 26 and Note 31 Exhibit D)		109,546			668,232
Trade receivables (Note 4.a)		534,732			421,193
Other receivables (Note 4.b)		244,903			43,361
Supplies		22,863			12,407
Other assets available for sale (Notes 27, 28, and 31 Exhibit C)		216,531			0
Total Current Assets		1,152,020			1,153,804

NON-CURRENT ASSETS
Trade receivables (Note 4.a)		45,725			45,531
Other receivables (Note 4.b)		70,704			14,803
Investments in other companies (Note 31 Exhibit C)		419			415
Supplies		26,862			23,249
Property, plant and equipment (Note 31 Exhibit A)		4,738,259			3,689,482
Goodwill		(289,557	)		0
Total Non-Current Assets		4,592,412			3,773,480

Total Assets		5,744,432			4,927,284

	2011		2010
CURRENT LIABILITIES
Trade accounts payable (Note 4.c)		658,328		378,505
Loans (Note 4.d)		59,025		54,108
Salaries and social security taxes (Note 4.e)		287,115		180,432
Taxes (Note 4.f)		168,993		111,080
Other liabilities (Note 4.g)		144,777		4,542
Accrued litigation (Note 31 Exhibit E)		10,344		57,832
Total Current Liabilities		1,328,582		786,499

NON-CURRENT LIABILITIES
Trade accounts payable (Note 4.c)		54,344		50,984
Loans (Note 4.d)		1,189,882		1,035,113
Salaries and social security taxes (Note 4.e)		69,527		50,633
Taxes (Note 4.f)		290,879		262,806
Other liabilities (Note 4.g)		1,373,687		984,518
Accrued litigation (Note 31 Exhibit E)		66,144		6,816
Total Non-Current Liabilities		3,044,463		2,390,870
Total Liabilities		4,373,045		3,177,369

MINORITY INTEREST		56,869		0

SHAREHOLDERS' EQUITY (as per related statement)		1,314,518		1,749,915
Total Liabilities and Shareholders’ Equity		5,744,432		4,927,284

The accompanying notes 1 through 31 and supplemental exhibits A, C, D, E, G and H are an integral part of these consolidated financial statements

F-4

EMPRESA DISTRIBUIDORA Y COMERCIALIZADORA NORTE S.A. (EDENOR S.A.)

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 2011, 2010 AND 2009

(stated in thousands of pesos)

	2011			2010			2009
Net sales (Note 4.h)		3,565,048			2,173,644			2,077,860
Electric power purchases		(1,593,937	)		(1,069,747	)		(1,003,362	)

Gross margin		1,971,111			1,103,897			1,074,498

Transmission and distribution expenses (Note 31 Exhibit H)		(1,188,725	)		(636,289	)		(548,583	)
Selling expenses (Note 31 Exhibit H)		(429,930	)		(194,236	)		(158,956	)
Administrative expenses (Note 31 Exhibit H)		(323,438	)		(178,897	)		(144,034	)

Subtotal		29,018			94,475			222,925

Other (Expense) Income, net (Note 4.i)		(25,256	)		(9,810	)		23,290

Gain from permanent investments (Note 3.f)		4			7			11
Amortization of goodwill (Note 31 Exhibit C)		12,340			0			0
Loss from valuation of other assets available for sale at net realizable value (Note 28 and Note 31Exhibit C)		(75,029	)		0			0

Financial income (expense) and holding gains (losses)
Generated by assets
Exchange difference		17,957			7,412			21,402
Interest		24,417			28,372			16,204
Holding loss (Notes 3.j and 11)		(1,169	)		(14,687	)		37,578
Tax on financial transactions		(30,067	)		(16,048	)		(13,352	)
Others		(2,421	)		0			0
Generated by liabilities
Financial expenses		(25,650	)		(12,484	)		(11,713	)
Exchange difference		(108,101	)		(40,278	)		(99,096	)
Interest		(189,728	)		(91,335	)		(87,739	)
Tax on financial transactions		(24,724	)		(21,120	)		(19,181	)
Loss from debt restructuring		(2,722	)		0			0
Other		(2,218	)		0			0

Adjustment to present value of the retroactive tariff increase arising from the application of the new electricity rate schedule and other trade receivables (Note 8.c)		1,170			11,581			3,413
Adjustment to present value of notes (Note 3.j)		0			(4,198	)		(5,243	)
Gain (Loss) from the purchase of notes		6,546			(7,054	)		81,455

Gain from investments in related companies		924			0			0

(Loss) Gain before taxes		(394,709	)		(75,167	)		169,954
Minority interest		(18,240	)		0			0
Income tax (Notes 3.m and 5)		(22,448	)		26,114			(52,331	)

Net (loss) gain for the year		(435,397	)		(49,053	)		117,623

(Loss) Gain per common share		(0.485	)		(0.055	)		0.131

The accompanying notes 1 through 31 and supplemental exhibits A, C, D, E, G and H are an integral part of these consolidated financial statements

F-5

EMPRESA DISTRIBUIDORA Y COMERCIALIZADORA NORTE S.A. (EDENOR S.A.)

STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2011, 2010 AND 2009

(stated in thousands of pesos)

	Shareholders' contributions												Retained earnings
							Nominal Value		Adjustment to Capital				Appropriated Retained
	Nominal		Adjustment		Additional		Treasury		Treasury				Earnings
	Value		to		Paid-in		Stock		Stock				Legal		Accumulated
	Note 7		Capital		Capital		Note 7		Note 7		Total		Reserve		Deficit			Total

Balance as of December 31, 2008		897,043		986,142		18,317		9,412		10,347		1,921,261		53,320		116,985			2,091,566

Absorption resolved by the General Annual Meeting held on March 31, 2009		—		—		—		—		—		—		6,156		(6,156	)		—

Net income for the year		—		—		—		—		—		—		—		90,643			90,643

Balance as of December 31, 2009		897,043		986,142		18,317		9,412		10,347		1,921,261		59,476		201,472			2,182,209

Absorption resolved by the General Annual Meeting held on April 7, 2010		—		—		—		—		—		—		4,532		(4,532	)		—
Deferred tax liability recognition adjustment		—		—		—		—		—		—		—		(383,241	)		(383,241	)

Net loss for the year		—		—		—		—		—		—		—		(49,053	)		(49,053	)

Balance as of December 31, 2010		897,043		986,142		18,317		9,412		10,347		1,921,261		64,008		(235,354	)		1,749,915

Net loss for the year		—		—		—		—		—		—		—		(435,397	)		(435,397	)

Balance as of December 31, 2011		897,043		986,142		18,317		9,412		10,347		1,921,261		64,008		(670,751	)		1,314,518

The accompanying notes 1 through 31 and supplemental exhibits A, C, D, E, G and H are an integral part of these consolidated financial statements

F-6

EMPRESA DISTRIBUIDORA Y COMERCIALIZADORA NORTE S.A. (EDENOR S.A.)

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2011, 2010 AND 2009

(stated in thousands of pesos)

	2011			2010			2009
Changes in cash and cash equivalents
Cash and cash equivalents at beginning of year (Note 26)		676,843			228,372			126,399
Cash and cash equivalents at end of year (Note 26)		132,991			676,843			228,372
Net (decrease) increase in cash and cash equivalents		(543,852	)		448,471			101,973

Cash flows from operating activities
Net (loss) gain for the year		(435,397	)		(49,053	)		90,643

Adjustments to reconcile net loss to net cash flows provided by operating activities
Depreciation of property, plant and equipment (Note 31 Exhibit A)		252,233			178,380			175,419
Residual value retirements of property, plant and equipment (Note 4.i and Note 31 Exhibit A)		22,042			1,125			2,763
Gain from the sale of real property (Note 4.i)		0			(5,266	)		0
Gain from investments in subsidiary and related companies		(928	)		(7	)		(11	)
Amortization of goodwill		(12,340	)		0			0
Gain from investments		(44,810	)		(55,650	)		26,379
Adjustment to present value of notes (Note 3.j)		0			4,198			5,243
Gain (Loss) from the purchase of notes		(6,546	)		7,054			(81,455	)
Loss from financial debt restructuring		2,722			0			0
Loss from valuation of other assets available for sale at net realizable value		75,029			0			0
Exchange difference and interest on loans		306,801			49,512			178,586
Income tax (Notes 3.m and 5)		22,448			(26,114	)		79,311
Recovery of the accrual for tax contingencies		0			0			(35,553	)
Allowance for doubtful accounts (Note 31 Exhibit E)		37,923			16,313			13,547
Recovery of allowance for doubtful accounts (Note 31 Exhibit E)		0			0			(26,956	)
Allowance for other doubtful accounts (Note 31 Exhibit E)		1,495			4,891			3,335
Minority interest loss		18,240			0			0
Adjustment to present value of the retroactive tariff increase arising from the application of the new electricity rate schedule and other trade receivables (Note 8.c)		(1,170	)		(11,581	)		(3,413	)
Changes in assets and liabilities:
Net (increase) decrease in trade receivables		(157,199	)		245			48,070
Net decrease (increase) in other receivables		(258,938	)		(275	)		5,342
Increase in supplies		(15,151	)		(2,218	)		(3,889	)
Increase in other assets available for sale		(291,560	)		0			0
Increase in trade accounts payable		283,183			34,853			15,221
Increase in salaries and social security taxes		125,577			69,015			27,173
Net decrease in taxes		63,538			(45,842	)		(56,915	)
Increase in other liabilities		167,797			74,495			39,298
Increase for funds deriving from the Program for the rational use of electric power (PUREE)		399,557			295,778			199,820
Net increase (decrease) in accrued litigation		11,840			(8,249	)		10,616

Financial interest paid (net of interest capitalized) (Note 3.g)		(106,158	)		(64,908	)		(76,827	)
Financial and commercial interest collected		51,523			60,232			32,230

Net cash flows provided by operating activities		511,751			526,928			667,977

Cash flows from investing activities
Additions of property, plant and equipment (Note 31 Exhibit A)		(653,360	)		(388,770	)		(404,165	)
Acquisition of permanent investments (Notes 27 and 28)		(567,600	)		0			0
Incorporation of cash from acquisition of permanent investments (Notes 27 and 28)		119,043			0			0
Collection of other investments sold		126,701			0			0
Collection of property, plant and equipment sold					7,435			0
Net cash flows used in investing activities		(975,216	)		(381,335	)		(404,165	)

Cash flows from financing activities
Net (decrease) increase in loans		(81,066	)		302,878			(175,453	)
Decrease in current and non current investments		0			0			13,614
Increase in minority interest		38,629			0			0
Payment of dividends		(37,950	)		0			0
Net cash flows provided by financing activities		(80,387	)		302,878			(161,839	)

Net (decrease) increase in cash and cash equivalents		(543,852	)		448,471			101,973

The accompanying notes 1 through 31 and supplemental exhibits A, C, D, E, G and H are an integral part of these consolidated financial statements

F-7

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2011 and 2010

(Amounts stated in thousands of Argentine pesos)

1. ORGANIZATION AND START UP OF THE COMPANY

Empresa Distribuidora Norte S.A. (EDENOR or the Company) was organized on July 21, 1992 by Decree No. 714/92 in connection with the privatization and concession process of the distribution and sale of electric power carried out by Servicios Eléctricos del Gran Buenos Aires S.A. (Segba S.A.).

By means of an International Public Bidding, the Federal Government awarded 51% of the Company’s capital stock, represented by the Class “A” shares, to the bid made by Electricidad Argentina S.A. (EASA). The award as well as the transfer contract were approved on August 24, 1992 by Decree No. 1,507/92 of the Federal Government.

On September 1, 1992, EASA took over the operations of EDENOR.

The corporate purpose of EDENOR is to engage in the distribution and sale of electricity within the concession area. Furthermore, among other activities, the Company may subscribe or acquire shares of other electricity distribution companies, subject to the approval of the regulatory agency, lease the network to provide electricity transmission or other voice, data and image transmission services, and render advisory, training, maintenance, consulting, and management services and know-how related to the distribution of electricity both in Argentina and abroad. These activities may be conducted directly by EDENOR or through subsidiaries or related companies. In addition, the Company may act as trustee of trusts created under Argentine laws, including extending secured credit facilities to service vendors and suppliers acting in the distribution and sale of electricity, who have been granted guarantees by reciprocal guarantee companies owned by the Company.

2. BASIS OF PRESENTATION OF THE CONSOLIDATED FINANCIAL STATEMENTS

Consolidated financial statements presentation

These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the City of Buenos Aires, Argentina (hereinafter “Argentine GAAP”) and the criteria established by the National Securities Commission (CNV), taking into account that which is mentioned in the following paragraphs.

The amounts of these consolidated financial statements are stated in thousands of Argentine pesos.

As from January 1, 2003 and as required by General Resolution No. 434/03 of the CNV, the Company reports the results of its operations, determines the values of its assets and liabilities and determines its profit and loss in conformity with the provisions of Technical Resolutions (TR) Nos. 8, 9 and 16 through 18 (consolidated text June 2003). As from January 1, 2004, the Company has applied the provisions of TR No. 21 of the Argentine Federation of Professional Councils in Economic Sciences (FACPCE) as adopted by the Professional Council in Economic Sciences of the Autonomous City of Buenos Aires (CPCECABA), with specific few exceptions and clarifications introduced by General Resolution No. 459/04 of the CNV.

F-8

The CNV, through its General Resolutions Nos. 485/05 and 487/06, decided to implement certain changes in the Argentine GAAP effective for fiscal years or interim periods beginning as from January 1, 2006, by requiring the application of TR Nos. 6, 8, 9, 11, 14, 16, 17, 18, 21, 22 and 23 and Interpretations 1, 2, 3, and 4, of the FACPCE with the amendments introduced by such Federation through April 1, 2005 (Resolution No. 312/05) and adopted by the CPCECABA (Resolution CD No. 93/05) with certain amendments and clarifications.

Among the aforementioned changes the following can be noted: i) the comparison between the values of certain assets and their recoverable values, using discounted cash flows; ii) the consideration of the difference between the accounting and tax values resulting from the adjustment for inflation included in non-monetary assets as a temporary difference, allowing the Company to either recognize a deferred tax liability or to disclose the effect of such accounting change in a note to the consolidated financial statements and (iii) the capitalization of interest cost on certain assets (only those assets that require an extended period of time to be produced or acquired would qualify) during the term of their construction and until they are in condition to be used.

With regard to the impact of the application of the change mentioned in the preceding paragraph under (i) on the Company’s property, plant and equipment, said change does not have a significant impact on the Company’s financial position or the results of operations for the year ended December 31, 2011, given that the fair value (defined as the discounted value of net cash flows arising from both the use of the assets and their final disposal) exceeds their recorded value, giving consideration to that which has been described in Note 3.g and section “The Company’s economic and financial situation” of the present note.

With regard to item (ii), until September 30, 2010, and as contemplated by General Resolution No. 487/06 of the CNV, the Company had elected to maintain such difference as a permanent difference, disclosing in a note the effect of recognizing such difference as temporary (Note 3.m).

On July 1, 2010, the CNV approved General Resolution No. 576/2010, pursuant to which those issuers that had elected to report in a note to the consolidated financial statements the deferred tax liability resulting from the application of the adjustment for inflation are required, with a view to IFRS implementation, to recognize such liability with a contra-account in unappropriated retained earnings. This recognition could be made in any interim period end or fiscal year end until the closing date of the fiscal year immediately preceding that in which the IFRS were applied for the first time. Furthermore, as an exception, the shareholders’ meetings that considered the financial statements for the fiscal year in which such deferred tax liability was recognized, could charge the amount of the aforementioned debit to unappropriated retained earnings, in accounts comprising capital stock not represented by shares, or in retained earnings accounts.

The Company has elected to recognize this deferred tax liability, which amounted to 358,263 with effect at December 31, 2011 in Accumulated Deficit (Notes 3.m, 3.w and 5).

Furthermore, on March 20 and June 12, 2009, the FACPCE approved TR Nos. 26 and 27 “Adoption of the International Financial Reporting Standards (IFRS) of the International Accounting Standards Board (IASB)” and “Changes to TR Nos. 6, 8, 9, 11, 14, 16, 17, 18, 21, 22, 23 and 24” respectively, which will be in effect for fiscal years beginning as from January 1, 2011. Additionally, the aforementioned TR have been approved by the Board of the Professional Council in Economic Sciences of the Autonomous City of Buenos Aires by Resolution No. 52/2009.

Moreover, on December 29, 2009, the CNV issued Resolution No. 562, according to which those entities that make a public offering of their capital stock or corporate notes pursuant to Law No. 17,811, or have requested authorization for their being included in such public offering system would be required to comply with the provisions of TR No. 26. The application of such standards will be mandatory for the Company as from the fiscal year beginning January 1, 2012.

F-9

On April 27, 2010, the Company’s Board of Directors approved the specific implementation plan required by General Resolution No. 562 of the National Securities Commission. Such approval was informed as a relevant fact on April 28, 2010.

Additionally, on July 1, 2010, the CNV issued Resolution No. 576 which provides solutions to, corrections and further explanation of those aspects concerning Resolution No. 562 about which the issuers of financial statements had raised objections or asked for clarification.

The company’s economic and financial situation

In the year ended December 31, 2011, the Company recorded a significant fall in its operating and net results, with its liquidity level and working capital having been affected as well. This situation is due mainly to both the delay in obtaining rate increases and cost adjustments recognition (“MMC”), requested in the presentations made until now by the Company in accordance with the terms of the Adjustment Agreement described in Notes 8 and 14, and the continuous increase of its operating costs that allow the Company to maintain the level of the service.

It is worth mentioning that in compliance with the terms of the Adjustment Agreement, the Company has maintained the quality of the distribution service, satisfying the constant year-on-year increase in the demand for electricity that has accompanied the economic growth of the last years. Due to both the increase recorded in the costs associated to the provision of the service and the need for additional investments to meet the increased demand, the Company has adopted a series of measures aimed at mitigating the negative effects of this situation on its financial structure, such as reducing certain specified costs, selling investments, as detailed in Note 27, reducing top management personnel’s fees, seeking new financing options, refinancing the financial debt with extended maturity terms and/or deferring the timing for certain of our estimated capital expenditures; provided that these measures do not affect the sources of employment, the execution of the investments plan or the carrying out of the essential operation and maintenance works that are necessary to maintain the provision of the public service.

In this framework, the Company has started the corresponding presentations process before control and regulatory authorities in order to jointly instrument the necessary mechanisms to contribute to an efficient provision of the distribution service, the maintenance of the level of investments and the compliance with the increased demand.

Should the conditions existing as of the date of these consolidated financial statements continue, the Board of Directors believes that the Company’s situation will continue to deteriorate. The cash flows and operating results for the next year, and financial ratios, will be negatively impacted.

F-10

The outcome of our tariff renegotiation is uncertain both as to its timing and final form. If during the next year: i) the new tariff schedules are not issued by ENRE; ii) we would not be granted of other mechanism for compensating our cost increases, and/or iii) would not get from the National Government other mechanism that provides us with financing for our cost increases, we are likely to have insufficient liquidity and will consequently further, be required to implement various measures as detailed above, to preserve cash and enhance our liquidity. Nevertheless, we cannot assure you that any additional financing could be obtained on acceptable terms. . As such, there is significant risk that should any of these measures, individually or in the aggregate, not be achieved, it would have a material adverse impact on the Company and the Company may need to seek other liquidity resources .The Company may need to enter in a renegotiation process with our creditors in order to obtain changes in the terms of our obligations to ease our financial condition”.

Given the fact that the realization of the projected measures to revert the negative trend manifested in the current year depends, among other factors, on the occurrence of certain events that are not under the Company’s control, such as the requested electricity rate increases, the Board of Directors has raised substantial doubt about the ability of the Company to continue as a going concern in the term of the next fiscal year. However, the Company's Consolidated Financial Statements do not include any adjustments or reclassifications that might result from the outcome of this uncertainty.

Consideration of the effects of inflation

The consolidated financial statements fully reflect the effects of the changes in the purchasing power of the currency through August 31, 1995. As from such date, and in accordance with Argentine GAAP and the requirements of control authorities, the restatement of the financial statements to reflect the effects of inflation was discontinued until December 31, 2001. As from January 1, 2002, and in accordance with Argentine GAAP, the Company resumed the application of the method of adjustment for inflation considering that the accounting basis restated as a result of the change in the purchasing power of the currency through August 31, 1995, as well as those with original date between such date and December 31, 2001, were restated in the currency value as of the latter date. The financial statements have been restated to reflect the effects of inflation based on the variations of the Domestic Wholesale Price Index.

On March 25, 2003, the Federal Government issued Decree No. 664 establishing that financial statements for fiscal years ending as from such date had to be prepared in nominal currency. Consequently, and in accordance with Resolution No. 441 of the CNV, the Company discontinued the restatement of its financial statements as from March 1, 2003. This criterion does not agree with Argentine GAAP, which establish that financial statements were to be restated through September 30, 2003.

Consolidation basis

The consolidated financial statements of Empresa Distribuidora y Comercializadora Norte S.A. (hereinafter the “Company”) include the investments (Notes 27 and 28) in Empresa Distribuidora Eléctrica Regional S.A. (“EMDERSA”), Aeseba S.A. (“AESEBA”) and Empresa Distribuidora Eléctrica Regional Holding S.A. (“EMDERSA HOLDING”).

The investment in AESEBA has been included in the Company’s consolidated financial statements on a line-by-line basis in accordance with the general consolidation method established by Technical Resolution No. 21 of the Argentine Federation of Professional Councils in Economic Sciences (“FACPCE”).

In the framework of that which has been described in Note 2 - The Company’s economic and financial situation, the Company’s Management has decided to divest from the companies comprising EMDERSA and EMDERSA HOLDING, and has begun to take the necessary steps for the sale thereof. Therefore, these investments have been classified as other assets available for sale, discontinuing their consolidation as of December 31, 2011.

Accordingly, the investments in EMDERSA and EMDERSA HOLDING have been included in the consolidated balance sheet as Other assets available for sale under Current Assets. The corresponding amounts charged to the results of operations have been included, on a line-by-line basis, in the Company’s Consolidated Statement of Operations. The assets, liabilities, results of operations and cash flows relating to these companies have been detailed in Note 25.

F-11

The data showing the Company’s consolidated controlling interest as of December 31, 2011 are as follow:

Directly controlled companies	Percentage interest held in capital stock and possible votes	Controlled / Indirectly and jointly controlled companies	Percentage interest held in capital stock and possible votes
	12.31.11		12.31.11
AESEBA	99.99	Empresa Distribuidora de Energía Norte S.A. (EDEN S.A.)	90.00

3. VALUATION CRITERIA

The main valuation criteria used in the preparation of these consolidated financial statements are as follow:

Cash and banks:

In local currency: at nominal value.

In foreign currency: at the exchange rates in effect as of the end of each year. The corresponding detail is disclosed in Note 31 Exhibit G.

Current investments:

Time deposits, which include the portion of interest income accrued through the end of each year.

Money market funds, which have been valued at the price of the unit of ownership as of the end of each year.

Government bonds, corporate notes and shares, which have been valued at the prevailing market price as of the end of each year.

Trade receivables:

Services rendered and billed but not collected, and services rendered but unbilled as of the end of each year, at nominal value, except for those indicated in the following paragraphs;

Services rendered but unbilled as of December 31, 2010, arising from the retroactive increase deriving from the application of the electricity rate schedule resulting from the Temporary Tariff Regime (RTT) (Note 8.c) 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 reflected market assessments of the time value of money and risks specific to the receivable at the time of their initial measurement.

The amounts thus determined:

	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 9.

F-12

Other receivables and liabilities (excluding loans):

In local currency: at nominal value.

In foreign currency: at the exchange rates in effect as of the end of each year (Note 31 Exhibit G).

Other receivables and liabilities have been valued as indicated above including, if any, interest income or expense accrued as of the end of each year. The values thus obtained do not differ significantly from those that would have been obtained if the Argentine GAAP had been applied, inasmuch as they establish that other receivables and liabilities must be valued on the basis of the best estimated amount to be collected and paid, respectively, discounted at a rate that reflects the time value of money and the risks specific to the transaction estimated at the time of their being recorded in assets and liabilities, respectively.

Liabilities, excluding loans, have been valued at nominal value including, if any, interest expense accrued as of the closing date of each year. The values thus obtained do not differ significantly from those that would have been obtained if the Argentine GAAP had been applied, inasmuch as they establish that they must be valued at their estimated cash price at the time of the transaction, plus interest and implicit financing components accrued on the basis of the internal rate of return determined at such opportunity.

The balances corresponding to ENRE Penalties and Discounts have been valued at nominal value, plus interest accrued on the portion disclosed as current (Notes 4.g and 8.a). ENRE Penalties and Discounts included in the Adjustment Agreement have been adjusted as stipulated in the aforementioned agreement (Note 8.c).

The balances corresponding to the Program for the Rational Use of Electric Power (PUREE) have been valued at nominal value (Notes 4.g and 14).

Deferred tax assets and liabilities have been valued at nominal value (Notes 3.m and 5).

Supplies:

Supplies were valued at acquisition cost restated to reflect the effects of inflation as indicated in Note 2. The consumption of supplies has been valued based on the average cost method.

The Company has classified supplies into current and non-current depending on whether they will be used for maintenance or capital expenditures.

The carrying value of supplies, taken as a whole, does not exceed their recoverable value as of the end of each year.

f)	Non-current investments and other assets available for sale:

a) 50% interest held in the related company SACME S.A. (a company organized by means of equal contributions by distribution companies EDENOR S.A. and EDESUR S.A. in accordance with the Bid Package). SACME S.A. is in charge of monitoring the electric power supplied to the aforementioned distributors. As of December 31, 2011 and 2010, the investment in SACME has been recorded at its equity value in accordance with the provisions of Technical Resolution No. 21 of the FACPCE (Note 31 Exhibit C).

In order to determine the equity value, the audited financial statements of SACME S.A. as of December 31, 2011 and 2010 have been used. The accounting principles used by SACME are similar to those applied by EDENOR for the preparation of its financial statements.

b) Negative goodwill represents the excess market value of the net identifiable acquired assets of AESEBA over the acquisition cost effectively paid. Negative goodwill is systematically amortized throughout a period equal to the remaining weighted average useful life of the Issuer Company’s identifiable assets that are subject to depreciation.

F-13

c) The investments in EMDERSA and EMDERSA HOLDING have been disclosed as Other current assets available for sale and have been valued at their estimated realizable value, which is lower than their equity value (Note 28).

In order to determine the estimated realizable value, the Company used the values of the offers received for EDELAR and EGSSA (Note 28) and the acquisition values for the other companies.

g)	Property, plant and equipment:

Property, plant and equipment transferred by SEGBA on September 1, 1992 were valued as of the privatization date as described below, and restated to reflect the effects of inflation as indicated in Note 2. The total value of the assets transferred from SEGBA was allocated to individual assets accounts on the basis of engineering studies conducted by the Company.

The total value of property, plant and equipment has been determined based on the USD 427 million price effectively paid by EASA for the acquisition of 51% of the Company’s capital stock at acquisition date. Such price was used to value the entire capital stock of EDENOR at 832 million pesos, which, when added to the fair value of the debts assumed by the Company under the SEGBA Privatization Bid Package for 139.2 million pesos less the fair value of certain assets received from SEGBA for 103.2 million, valued property plant and equipment at 868 million pesos.

SEGBA neither prepared separate financial statements nor maintained financial information or records with respect to its distribution operations or the operations in which the assets transferred to EDENOR were used. Accordingly, it was not possible to determine the historical cost of transferred assets.

Additions subsequent to such date have been valued at acquisition cost restated to reflect the effects of inflation as indicated in Note 2, net of the related accumulated depreciation. Depreciation has been calculated by applying the straight-line method over the remaining useful life of the assets which was determined on the basis of the above-mentioned engineering studies. Furthermore, in order to improve the disclosure of the account, the Company has made certain changes in the classification of property, plant and equipment based on each technical process.

In accordance with the provisions of TR No. 17, financial costs in relation to any given asset may be capitalized when such asset is in the process of production, construction, assembly or completion, and such processes, due to their nature, take long periods of time; those processes are not interrupted; the period of production, construction, assembly or completion does not exceed the technically required period; the necessary activities to put the asset in condition to be used or sold are not substantially complete; and the asset is not in condition so as to be used in the production or start up of other assets, depending on the purpose pursued with its production, construction, assembly or completion. The Company capitalized financial costs on property, plant and equipment from 1997 to 2001, from 2006 through 2010 and during the year ended December 31, 2011. Financial costs capitalized for the years ended December 31, 2011 and 2010 amounted to 16,133 and 19,522, respectively.

During the years ended December 31, 2011 and 2010, direct costs capitalized amounted to 79,894 and 57,443, respectively.

The Company analyzes the recoverability of its non-current assets on a periodical basis or when events or changes in circumstances indicate that the recoverable value of assets, which is measured as the economic use value as of the end of the year, may be impaired.

F-14

The economic use value is determined based on projected and discounted cash flows, using discount rates that reflect the time value of money and the specific risks of the assets considered.

Cash flows are prepared on the basis of estimates concerning the future performance of certain variables that are sensitive to the determination of the recoverable value, among which the following can be noted: (i) nature, opportunity and modality of electricity rate increases and cost adjustment recognition in accordance with the agreements described in Notes 8 and 14; (ii) demand for electricity projections; (iii) evolution of the costs to be incurred, and; (iv) macroeconomic variables, such as growth rates, inflation rates and foreign currency exchange rates.

In spite of the current economic and financial situation, which is described in Note 2, the Company has made its projections under the assumption that the electricity rates will be improved according to the circumstances. However, the Company may not ensure that the future performance of the variables used to make its projections will be in line with what it has estimated. Therefore, significant differences may arise in relation to the estimates used and assessments made as of the date of these consolidated financial statements.

In order to contemplate the estimation risk contained in the projection of the aforementioned variables, the Company has considered different probability-weighted scenarios.

Based on the previously mentioned conclusions, the valuation of property, plant and equipment, taken as a whole, does not exceed their recoverable value as of the end of each year.

Finally, and in accordance with the concession agreement, the Company may not pledge the assets used in the provision of the public service nor grant any other security interest thereon in favor of third parties, without prejudice to the Company’s right to freely dispose of those assets which in the future may become inadequate or unnecessary for such purpose. This prohibition does not apply in the case of security interests granted over an asset at the time of its acquisition and/or construction to secure payment of the purchase price and/or installation.

Allowances:

a) Allowance 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 each year and collections subsequent thereto.

Furthermore, and considering that the Framework Agreement expired on December 31, 2010 (Note 9), the Company recorded an allowance for the total amount of the receivables billed for these concept as from January 1, 2011.

Additionally, for purposes of calculating the amount of the allowance, the Company has considered a detailed analysis of accounts receivable in litigation.

b) Allowance for doubtful recoverability of tax loss carryforward: it has been recorded to adjust the valuation of the deferred tax asset resulting from the tax loss carryforward estimated as of the end of the year, up to its estimated recoverable value, in accordance with that mentioned in Notes 2 section “The Company’s economic and financial situation” and 3.m.

The evolution and balances of allowances have been disclosed in Note 31 Exhibit E.

F-15

Accrued litigation:

Amounts have been accrued for several contingencies.

1) The Company is a party to certain lawsuits and administrative proceedings in several courts and government agencies, arising from the ordinary course of business.

2) The Company is also a party to civil and labor lawsuits in the ordinary course of business.

As of the end of each 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 will not have a material adverse effect on the Company’s result of operations or its financial position.

The evolution and balances of the accrued litigation account have been disclosed in Note 31 Exhibit E.

Loans:

As of the end of each year, the notes issued in United States dollars (Note 10) have been valued on the basis of the best estimate of the amount to be paid, discounted at a rate that reasonably reflects market assessments of the time value of money and specific debt risks, net of issuance expenses.

The adjustment to present value of future cash flows of the notes, using the market interest rate in effect at the time of the initial measurement, generated a loss of 4,198 as of December 31, 2010.

The rest of the financial debts have been valued at nominal value plus interest expense accrued as of the end of each year. The values thus obtained do not differ significantly from those that would have been obtained if the Argentine GAAP had been applied, inasmuch as they establish that they must be valued in accordance with the amount of money delivered and received, respectively, net of transaction costs, plus financial results accrued on the basis of the internal rate of return estimated at the time of their initial recognition.

“Derivative financial instruments” (Note 11) have been valued in accordance with the provisions of section 2 of Technical Resolution No. 18 of the Argentine Federation of Professional Councils in Economic Sciences (FACPCE), which require that all derivative financial instruments be recognized as assets and/or liabilities at their fair value, regardless of whether they are designated as hedging instruments or not.

Furthermore, the changes in the accounting basis of financial instruments -Corporate Notes- have been recognized by the Company in the Financial income (expense) and holding gains (losses) generated by liabilities account of the Statement of Operations as of December 31, 2011 and 2010 under Exchange difference (Note 11.a), with a contra-account in Current Assets; Other receivables, under Derivative financial instruments (Note 4. b) and in Current Liabilities; Loans, under Derivative financial instruments (Note 4. d).

The changes in the accounting basis of financial instruments -Forward and futures contracts- have been recognized by the Company in the Financial income (expense) and holding gains (losses) generated by assets account of the Statement of Operations as of December 31, 2011, 2010 and 2009 under Holding loss (Note 11.b). As of December 31, 2011 and 2010, the aforementioned transactions have been fully settled.

F-16

Shareholders' equity accounts:

These accounts have been restated to reflect the effects of inflation as indicated in Note 2, except for the “Shareholders’ Contributions - Nominal value” and “Additional Paid-in Capital” accounts which have been maintained at their nominal value.

The excess of the adjusted value of Capital Stock over its nominal value has been included in the “Shareholders’ Contributions – Adjustment to Capital” account.

The Treasury Stock account represents the nominal value of the Company’s own shares acquired by the Company (Note 7).

Statement of operations accounts:

The accounts that accumulate monetary transactions have been disclosed at their nominal values.

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 as of December 31, 2010 and 2009 is stated at nominal value.

The adjustment to present value of trade receivables related to the application of the retroactive tariff increase agreed upon in the Adjustment Agreement and other trade receivables as of December 31, 2011, 2010 and 2009 is stated at nominal value.

Income tax and tax on minimum presumed income:

The Argentine GAAP require the application of the deferred tax method to account for income tax. This method consists of recognizing deferred tax assets and liabilities when temporary differences arise from the valuation of assets and liabilities for accounting and tax purposes. Taking into account the legal regulations in effect as of the date of issuance of these financial statements, deferred tax assets and liabilities have been determined by applying to temporary differences identified and tax losses, the tax rate that is expected to apply at the time of their reversal or use.

With regard to the consideration of the difference between the accounting and tax values resulting from the adjustment for inflation included in non-monetary assets, as a temporary difference, the Company has decided that the deferred tax liability generated by this concept be recognized in the accounting on December 31, 2011 retroactively to January 1, 2011, as contemplated by General Resolution No. 576/10 of the National Securities Commission. The recorded amount of the deferred tax liability for this concept, with a contra-account in accumulated deficit, totals 358,263 (Note 5).

Furthermore, as of December 31, 2011, due to the situation described in Note 2, the Company has recorded an allowance for the amount of the deferred tax asset resulting from the estimated tax loss carryforward at year-end, due to the fact that the generation of future taxable income for offsetting purposes within the period contemplated by the tax legislation in effect is uncertain. Moreover, the amount of the deferred tax asset not included in the allowance is considered recoverable as there exist taxable temporary differences (deferred tax liability) whose reversal is estimated to occur in the same periods in which the deductible temporary differences comprising it are expected to reverse (Note 5).

Additionally, the Company determines the tax on minimum presumed income by applying the current rate of 1% on the Company’s taxable assets as of year-end. The tax on minimum presumed income and the income tax complement each other. The Company’s tax obligation for each year will be equal to the higher of these taxes. However, should the tax on minimum presumed income exceed income tax in any given fiscal year, such excess may be computed as a payment on account of any excess of income tax over the tax on minimum presumed income that may arise in any of the ten subsequent fiscal years.

F-17

The Company has recognized the minimum presumed income tax accrued in the year and paid in the previous years as a receivable, as it estimates that in future fiscal years it may be computed as a payment on account of the Income tax (Note 5).

n) Operating leases:

As lessee, EDENOR has lease contracts (buildings) which classify as operating leases.

The features that these lease contracts have in common are that lease payments (installments) are established as fixed amounts; there are neither purchase option clauses nor renewal term clauses (except for the lease contract of the Energy Handling and Transformation Center that has an automatic renewal clause for the term thereof); and there are prohibitions such as: transferring or sub-leasing the building, changing its use and/or making any kind of modifications thereto. All operating lease contracts have cancelable terms and lease periods of two to thirteen years.

Buildings are for commercial offices, two warehouses, the headquarters building (comprised of administration, commercial and technical offices), the Energy Handling and Transformation Center (two buildings and a plot of land located within the perimeter of Central Nuevo Puerto and Puerto Nuevo) and Las Heras substation.

As of December 31, 2011, 2010 and 2009, future minimum lease payments with respect to operating leases are as follow:

	2011		2010		2009
2010		0		0		8,400
2011		0		6,748		2,645
2012		12,101		8,659		336
2013		9,483		8,470		209
2014		9,087		8,406		147
2015		3,127		2,900		147
2016		147		147		0
2017		147		0		0
Total future minimum lease payments		34,092		35,330		11,884

Total rental expenses for all operating leases for the years ended December 31, 2011, 2010 and 2009 are as follow:

		2011				2010				2009
Total lease expenses			11,751				13,130				8,478

As lessor, Edenor has entered into operating lease contracts with certain cable television companies granting them the right to use the poles of the Company’s network. Most of these lease contracts include automatic renewal clauses.

F-18

As of December 31, 2011, 2010 and 2009, future minimum lease collections with respect to operating leases are as follow:

	2011		2010		2009
2010		0		0		12,831
2011		0		20,898		12,294
2012		26,836		1,924		2,167
2013		24,383		89		75
2014		22		20		18
Total future minimum lease collections		51,241		22,931		27,385

Total rental income for all operating leases for the years ended December 31, 2011, 2010 and 2009, is as follows:

		2011				2010				2009
Total lease income (Note 4.h)			22,511				18,114				13,582

Labor cost liabilities and early retirements payable:

Presented below is a detail of the estimated costs and liabilities related to the following:

—	supplementary benefits of leaves of absence derived from accumulated vacation,
—	other personnel benefits (pension plan), as stipulated in collective bargaining agreements in effect, to be granted to employees who retire under the differential retirement system of Decree No. 937/74, upon reaching 55 years of age and 30 years of service, which consist of 10 salaries. As of December 31, 2011 and 2010, the accrual for these benefits amounted to 38,283 and 31,356, respectively (Note 4.e), and
—	seniority-based bonus, as stipulated in collective bargaining agreements in effect, which consists of the payment of one salary to male/female employees upon reaching 20, 30, 35 and 40, and 17, 27, 32 and 37 years of employment, respectively. As of December 31, 2011 and 2010, the accrual for such bonuses amounted to 18,065 and 12,432, respectively (Note 4.e).

Liabilities related to the above-mentioned seniority-based bonus and other personnel benefits (pension plan) to be granted to employees, have been determined taking into account all rights accrued by the beneficiaries of both plans as of December 31, 2011 and 2010, respectively, on the basis of actuarial studies conducted by an independent actuary as of December 31, 2011 and 2010. The actuarial method used by the Company is the Projected Unit Credit Method. Such liabilities have been disclosed in the current and non-current Salaries and social security taxes account, respectively (Note 4.e).

Early retirements payable corresponds to individual optional agreements. After employees reach a specific age, the Company may offer them this option. The related accrued liability represents future payment obligations which as of December 31, 2011 and 2010 amount to 5,219 and 6,165 (current) and 5,520 and 6,845 (non-current), respectively (Note 4.e).

The detail of the estimated amounts charged to the results of operations due to variations in the Company’s payment commitments under the personnel benefits plan of Edenor as of December 31, 2011, 2010 and 2009 is as follows:

	2011		2010		2009
Cost		2,229		1,828		1,608
Interest		8,163		7,825		4,843
Amortization of recognized net actuarial loss		1,710		814		1,314
		12,102		10,467		7,765

F-19

The detail of the variations in the Company’s payment commitments under the personnel benefits plan of Edenor as of December 31, 2011, 2010 and 2009 is as follows:

	2011			2010			2009
Payment commitments under the personnel benefits plan at the beginning of the year		41,492			31,195			26,623
Cost		2,229			1,828			1,608
Interest		8,163			7,825			4,843
Actuarial loss		11,957			4,572			(886	)
Benefits paid to participating employees		(5,175	)		(3,928	)		(993	)
Payment commitments under the personnel benefits plan as of the end of the year		58,666			41,492			31,195

Payment commitments under the personnel benefits plan at year-end		58,666			41,492			31,195
Unrecognized net actuarial loss		(20,383	)		(10,136	)		(6,375	)
Total personnel benefits plan (Note 4.e)		38,283			31,356			24,820

Actuarial assumptions used were the following:

	2011	2010	2009
Discount rate	30%	24%	25%
Salary increase	23%	15%	15%
Inflation	22%	18%	11.5%

As of December 31, 2011, 2010 and 2009, the Company does not have any assets related to the personnel benefits plan (pension plan).

Customer deposits and contributions (Note 4. c):

Customer deposits:

Under the Concession Agreement, the Company is allowed to receive customer deposits in the following cases:

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.

The Company has decided not to request customer deposits from residential tariff customers.

Customer deposits may be either paid in cash or through the customer’s bill and accrue monthly interest at a specific rate of Banco de la Nación Argentina called “reference” rate.

When a customer requests that the supply service be disconnected, the customer’s deposit is credited (principal amount plus any interest accrued up to the date of reimbursement). Any balance outstanding at the time of requesting the disconnection of the supply service is deducted from the amount so credited. Similar procedures are followed when the supply service is disconnected due to a lack of customer payment. Consequently, the Company recovers, either fully or partially, any amount owed for electric power consumption.

When the conditions for which the Company is allowed to receive customer deposits no longer exist, the principal amount plus any interest accrued thereon are credited to the customer’s account.

F-20

Customer contributions:

The Company receives advances from certain customers for services to be provided based on individual agreements. Such advances are stated at nominal value plus interest accrued as of the end of each year.

Advances received from certain customers of EDEN S.A. for services to be provided based on individual agreements are accounted for net sales.

Revenue recognition:

Revenues from operations are recognized on an accrual basis and derive mainly from electricity distribution. Such revenues include electricity supplied, whether billed or unbilled, at the end of each year and have been valued on the basis of applicable tariffs.

The Company also recognizes revenues from other concepts included in distribution services, such as new connections, rights of use on poles, transportation of electricity to other distribution companies, etc.

All revenues are recognized when the Company’s revenue earning process has been completed, the amount of revenues may be reasonably measured and the economic benefits associated with the transaction flow to the Company.

MMC (Cost Monitoring Mechanism) amounts are recognized in the accounting when approved by the ENRE. Accordingly, revenues from MMC adjustments applicable until May 2008 have already been recognized in the accounting (Notes 4.a and 14).

Estimates:

The preparation of the consolidated financial statements in accordance with Argentine GAAP requires the Company’s Board of Directors and Management to make estimates that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reported year. The Company’s Management makes estimates to calculate, for example, depreciation and amortization, the recoverable value of assets and contingencies. Future actual results and amounts may differ from the estimates used and assessments made as of the date of the consolidated financial statements.

Additionally, the Company has recorded an allowance for a portion of the deferred tax asset corresponding to tax losses carryforward due to the fact that it estimates that it will not be recovered within the period contemplated by the tax legislation in effect (Note 3.m).

Furthermore, these consolidated financial statements have been prepared in accordance with the accounting principles applicable to a going concern, assuming that the Company will continue to operate normally. Therefore, they do not include the effects of any adjustments or reclassifications, if there were any, that might be necessary to make if the situation described in Note 2 is not resolved.

F-21

Losses - Earnings per common share:

It has been computed on the basis of the number of shares outstanding as of December 31, 2011, 2010 and 2009 which amounts to 897,042,600 (net of the treasury shares as of December 31, 2011, 2010 and 2009 for 9,412,500). There is no earning (loss) per share dilution, as the Company has issued neither preferred shares nor corporate notes convertible into common shares.

Segment information:

In accordance with the provisions of TR No. 18, the Company is required to disclose segment information provided certain requirements are met. This Resolution establishes the criterion to be followed for reporting information on operating segments in annual financial statements, and requires the reporting of selective information on operating segments in interim financial reports. Operating segments are those components of the Company’s activity about which different financial information may be obtained, whether for the allocation of resources or the determination of an asset’s performance. TR No. 18 also establishes the criterion to be applied by the Company to disclose its services, geographical areas and major customers.

The Company carries on its business activity in the electricity sector, acting in the distribution and generation of electricity through different legal entities in which it holds an interest.

Furthermore, the Company’s Management performs the analysis, follow-up and control of its business activities based on the following segments: EMDERSA, AESEBA and EDENOR (Note 25).

Risk management:

The Company operates mainly in Argentina. Its business may be affected by inflation, currency devaluation, regulations, interest rates, price controls, changes in governmental economic policies, taxes and other political and economic-related issues affecting the country. The majority of the Company’s assets are either non-monetary or denominated in Argentine pesos, whereas the majority of its liabilities are denominated in U.S. dollars. As of December 31, 2011 and 2010, a minimum portion of the Company’s debts accrued interest at floating rates; consequently the Company’s exposure to interest rate risk is limited (Notes 10 and 11.a and b).

As of December 31, 2011 and 2010, the Company had entered into forward and futures contracts with the aim of mitigating the risk generated by the fluctuations in the US dollar rate of exchange (Notes 4.d and 11.b).

Additionally, as of December 31, 2011 and 2010, the Company has carried out transactions with derivative financial instruments with the aim of hedging the exchange rate of the amounts in foreign currency that it will have to pay in the next interest payment dates of its financial debt, Class 9 Fixed Rate Par Notes (Notes 3.j, 4.b, 4.d and 11.a).

Concentration risks:

b) Related to customers

The Company’s accounts receivable derive primarily from the sale of electric power.

No single customer accounted for more than 10% of sales for the years ended December 31, 2011 and 2010. The collectibility of trade receivables balances related to the Framework Agreement, which amount to 54,272 and 33,047 as of December 31, 2011 and 2010, respectively, as disclosed in Notes 4.a and 9, is subject to compliance with the terms of such agreement.

F-22

d) Related to employees who are union members

The Bid Package sets forth the responsibilities of both SEGBA and the Company in relation to the personnel transferred by SEGBA through Resolution No. 26/92 of the Energy Secretariat. According to the Bid Package, SEGBA will be fully liable for any labor and social security obligations accrued or originated in events occurred before the take-over date, as well as for any other obligations deriving from lawsuits in process at such date.

During 2005, two new collective bargaining agreements were signed with the Sindicato de Luz y Fuerza de la Capital Federal (Electric Light and Power Labor Union of the City of Buenos Aires) and the Asociación de Personal Superior de Empresas de Energía (Association of Supervision Personnel of Energy Companies), which expired on December 31, 2007 and October 31, 2007, respectively. These agreements were approved by the Ministry of Labor and Social Security on November 17, 2006 and October 5, 2006, respectively.

As of December 31, 2011 and 2010, approximately 80% of the Company’s employees were union members. Although the relationship with unions is currently stable, the Company may not ensure that there will be no work disruptions or strikes in the future, which could have a material adverse effect on the Company’s business and revenue. Furthermore, collective bargaining agreements signed with unions expired at the end of the 2007 fiscal year. There is no guarantee that the Company will be able to negotiate new collective bargaining agreements under the same terms as those currently in place or that there will be no strikes before or during the negotiation process.

As of the date of issuance of these consolidated financial statements, meetings aimed at negotiating the renewal terms of both collective bargaining agreements are being held with the above-mentioned unions.

Foreign currency translation/ transactions:

The Company accounts for foreign currency denominated assets and liabilities and related transactions as follows:

The accounting measurements of purchases, sales, payments, collections, other transactions and outstanding balances denominated in foreign currency are translated into pesos using the exchange rates described below. Thus, the resulting amount in pesos represents the amount collected or to be collected, paid or to be paid.

For translation purposes, the following exchange rates are used:

a)	the exchange rate in effect at the date of the transaction, for payments, collections and other transactions denominated in foreign currency; and

b)	the exchange rate in effect at the date of the consolidated financial statements, for assets and liabilities denominated in foreign currency.

For transactions and balances denominated in foreign currency, the bid price is used for assets, and the offer price is used for liabilities.

The effect of such transactions has been included in the Statement of Operations as “Exchange difference” under “Financial income (expense) and holding gains (losses)”.

F-23

Financial statements comparison:

Certain amounts disclosed in the financial statements as of December 31, 2010 have been reclassified for comparative purposes, following the disclosure criteria used for the consolidated financial statements as of December 31, 2011.

Additionally, the Company recognized the deferred tax liability generated by the differences between the accounting and tax values resulting from the adjustment for inflation included in non-monetary assets retroactively to January 1, 2011 (Notes 3.m and 5). The effects of this change on the results of operations for the year ended December 31, 2010 are detailed below:

	2010			2009
Net (loss) income for the year before adjustment		(74,031	)		90,643
Deferred tax liability recognition adjustment		24,978			26,980
Net (loss) income for the year		(49,053	)		117,623

4. BREAKDOWN OF MAIN CONSOLIDATED ACCOUNTS

Consolidated Balance Sheets as of December 31, 2011 and 2010

a) Trade receivables

The breakdown of trade receivables as of December 31, 2011 and 2010 is as follows:

	2011			2010
Current:
Receivables from sales of electricity:
Sales of electricity - Billed		344,116			216,749
Total billed		344,116			216,749

Sales of electricity - Unbilled		196,598			149,046
Retroactive tariff increase arising from the application of the new electricity rate schedule		0			21,442
Adjustment to present value of the retroactive tariff increase arising from the application of the new electricity rate schedule		0			(1,170	)
Framework Agreement		54,272			33,047
National Fund of Electricity		3,353			3,437
Bonds for the cancellation of debts of the Province of Bs. As.		0			8,743
Specific fee payable for the expansion of the network, transportation and others		6,512			4,477
Total unbilled		260,735			219,022

In litigation		16,109			14,681
Less:
Allowance for doubtful accounts (Note 31 Exhibit E)		(86,228	)		(29,259	)
Total Current		534,732			421,193

Non-Current:
Receivables from sales of electricity:
Cost Monitoring Mechanism and other receivables		45,725			45,531
Total Non-Current		45,725			45,531

F-24

b) Other receivables

The breakdown of other receivables as of December 31, 2011 and 2010 is as follows:

	2011			2010
Current:
Prepaid expenses		2,986			4,625
Advances to suppliers		39,163			4,014
Advances to personnel		4,627			6,276
Related parties		175,125			4,169
Receivables from activities other than the main activity		20,405			23,321
Allowance for other doubtful accounts (Note 31 Exhibit E)		(12,253	)		(12,799	)
Tax on financial transactions		829			3,693
Note receivable from EDESUR S.A.		2,846			0
Derivative financial instruments		1,316			0
Other		9,859			10,062
Total Current		244,903			43,361


Non-Current:
Prepaid expenses	1,140	1,199
Tax on minimum presumed income	52,013	12,283
Tax credits	885	0
Receivables from EDEN S.A. Class “C” shareholders	15,417	0
Other	1,249	1,321
Total Non-Current	70,704	14,803

c) Trade accounts payable

The breakdown of trade accounts payable as of December 31, 2011 and 2010 is as follows:

	2011		2010
Current:
Payables for purchase of electricity and other purchases		427,723		221,626
Accrual for unbilled electric power purchases		115,125		111,860
Customer contributions		79,292		33,965
Other		36,188		11,054
Total Current		658,328		378,505

Non-Current:
Customer deposits		53,477		49,129
Other		867		1,855
Total Non-Current		54,344		50,984

F-25

d) Loans

The breakdown of loans as of December 31, 2011 and 2010 is as follows:

	2011		2010
Current:
Financial loans		6,785		0
Interest		28,978		21,237
Corporate Notes		23,262		25,790
Derivative financial instruments		0		7,253
Adjustment to present value of Corporate Notes		0		(172	)
Total Current		59,025		54,108

Non-Current:
Financial loans		6,891		0
Corporate Notes		1,182,991		1,052,686
Adjustment to present value of Corporate Notes		0		(17,573	)
Total Non-Current		1,189,882		1,035,113

e) Salaries and social security taxes

The breakdown of salaries and social security taxes as of December 31, 2011 and 2010 is as follows:

	2011		2010
Current:
Salaries payable and accruals		260,007		160,616
Social Security (ANSES)		10,536		13,651
Early retirements payable		5,246		6,165
Pension plans payable		11,326		0
Total Current		287,115		180,432

Non-Current:
Early retirements payable		5,526		6,845
Seniority-based bonus		18,065		12,432
Personnel benefits plans		45,936		31,356
Total Non-Current		69,527		50,633

f) Taxes

The breakdown of taxes as of December 31, 2011 and 2010 is as follows:

	2011		2010
Current:
Provincial, municipal and federal contributions and taxes, VAT and turnover tax payable		58,326		62,925
Income tax and tax on minimum presumed income (net of advances and payments on account) (Note 5)		40,266		0
Withholdings		20,455		9,798
Municipal taxes		36,855		27,159
Tax regularization plan Law No. 26476		1,466		1,364
Other		11,625		9,834
Total Current		168,993		111,080

Non-Current:
Net deferred tax liabilities (Note 5)	279,767	253,817
Tax regularization plan Law No. 26476	7,161	8,989
Other	3,951	0
Total Non-Current	290,879	262,806

F-26

g) Other liabilities

The breakdown of other liabilities as of December 31, 2011 and 2010 is as follows:

	2011		2010
Current:
Program for the rational use of electric power (PUREE)		61,566		0
Dividends payable		1,211		0
Penalties and discounts		35,636		0
Advance payments received for EDELAR’s sale agreement		6,455		0
Related parties (1)		14,288		0
Advances for works to be performed		17,459		0
Other		8,162		4,542
Total Current		144,777		4,542

Non-Current:
Program for the rational use of electric power (PUREE)		867,089		529,097
Penalties and discounts		506,598		455,421
Total Non-Current		1,373,687		984,518

(1) Related to advance payment received for EGSSA’s sale agreement and dividends payable to Pampa Inversiones S.A.

Consolidated Statements of Income as of December 31, 2011 and 2010

h) Net sales

The breakdown of net sales for the years ended December 31, 2011, 2010 and 2009 is as follows:

	2011		2010		2009

Sales of electricity (1)		3,443,714		2,125,390		2,035,845
Late payment charges		31,269		22,197		20,686
Right of use on poles		79,128		18,114		13,582
Connection charges		8,581		5,550		5,700
Reconnection charges		2,356		2,393		2,047
Total		3,565,048		2,173,644		2,077,860

(1) Net of ENRE discounts and penalties for 81,058, 80,006 and 58,500 for the years ended December 31, 2011, 2010 and 2009, respectively (Note 8.a).

F-27

i) Other (Expense) Income, net

The breakdown of other (expense) income, net for the years ended December 31, 2011, 2010 and 2009 is as follows:

	2011			2010			2009

Non-operating income (expense)		7,789			985			4,529
Commissions on municipal taxes collection		5,387			4,905			3,844
Net expense from technical services		(5,148	)		(4,114	)		(785	)
Voluntary Retirements - Bonuses		(10,897	)		(10,103	)		(5,381	)
Severance paid		(9,152	)		(4,658	)		(4,419	)
Accrued litigation (Note 31 Exhibit E)		(17,169	)		(1,213	)		(15,500	)
Residual value retirements of property, plant and equipment (Note 31 Exhibit A)		(4,913	)		(1,125	)		(2,763	)
Income from the sale of real property		0			5,266			0
Recovery og allowonce for doubtfull accounts (1)		0			0			21,236
Net recovery of accrued litigation (1)		0			0			23,431
Other related party income (expense), net		377			210			0
Other		8,470			37			(902	)
Total		(25,256	)		(9,810	)		23,290

(1) Related to the Framework Agreement Province of Buenos Aires (Note 9, Note 31 Exhibits E and H).

(2) Related to the Company’s adherence to the taxregularization plan.

5. INCOME TAX AND DEFERRED TAX

Consolidated deferred tax assets and liabilities as of December 31, 2011, 2010 and 2009 are as follow:

	2011			2010			2009
(Loss) Income for the year before taxes		(394,709	)		(75,167	)		169,954
Applicable tax rate		35	%		35	%		35	%
(Gain) Loss for the year at the applicable tax rate		(138,148	)		(26,308	)		59,484
Permanent differences at the applicable tax rate:
Permanent differences		11,585			194			(7,153	)
Total income tax charge for the year before allowance for impairment of net deferred assets		(126,563	)		(26,114	)		52,331
Increase in the allowance for impairment of net deferred assets (Note 31 Exhibit E)		149,011			0			0
Total income tax charge for the year		22,448			(26,114	)		52,331

Variation between deferred assets (liabilities) charged to the results of operations		16,376			42,349			41,603
Difference between accrual and tax return		1,442			0			1,636
Income tax for the year (Note 4.f)		40,266			16,235			95,570

Allowance for the impairment of net deferred assets	2011		2010
At beginning of year		0		0
Increase in the allowance for the impairment of net deferred assets (Note 31 Exhibit E)		149,011		0
Balance at end of year (Note 31 Exhibit E)		149,011		0

F-28

The amounts of deferred tax assets and liabilities considered as of December 31, 2011, 2010 and 2009 are as follow:

	2011		2010		2009
Non-current deferred tax assets
Tax loss carryforward		169,477		11,586		4,293
Trade receivables and other receivables		32,011		0		0
Accruals and other debts		166,169		175,143		127,033
Intangible assets		40,650		0		0
Other		6,390		442		14,058
Non-current deferred tax assets		414,697		187,171		145,384

	2011			2010			2009
Non-current deferred tax liabilities
Property, plant and equipment and other		(518,461	)		(440,988	)		(441,550	)
Non-current deferred tax liabilities		(518,461	)		(440,988	)		(441,550	)

Net deferred tax liabilities before allowance for impairment of net deferred assets		(103,764	)		(253,817	)		(296,166	)

	2011			2010			2009
Allowance for impairment of net deferred assets		(176,003	)		0			0
Net deferred tax liabilities (Note 4.f)		(279,767	)		(253,817	)		(296,166	)

Tax losses carryforward in effect as of December 31, 2011 are as follow:

Tax loss carryforward	Amount		Rate 35%		Year of expiration
Generated in fiscal year 2007		53,324		18,663		2012
Generated in fiscal year 2008		70		24		2013
Generated in fiscal year 2009		46		16		2014
Generated in fiscal year 2010		37,313		13,060		2015
Generated in fiscal year 2011		393,468		137,714		2016
Total tax loss carryforward as of December 31, 2011		484,221		169,477

Additionally, as of December 31, 2011, the minimum presumed income tax receivable of 52,013 has been disclosed in other non-current receivables (Note 4.b), in accordance with that mentioned in Note 3.m.

The breakdown of the aforementioned receivable is as follows:

Minimum presumed income tax receivable	Amount		Year of expiration
Generated in fiscal year 2010		17,330		2020
Generated in fiscal year 2011		34,683		2021
		52,013

6. CONSOLIDATED SEGMENT INFORMATION

The Company carries on its business activities in the electricity sector, acting in the distribution and generation of electricity through different legal entities in which it holds an interest. Furthermore, the Company’s Management performs the analysis, follow-up and control of the Company’s business activities based on the following segments:

EMDERSA, comprised of EDESA, EDELAR, EDESAL, EGSSA, EMDERSA and EMDERSA HOLDING.

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AESEBA, comprised of AESEBA and EDEN.

EDENOR, comprised of Edenor S.A.

The information on each operating segment identified by the Company for the year ended December 31, 2011 is as follow:

Consolidated results as of December 31, 2011	Emdersa			Aeseba			Edenor			Eliminations			Consolidated
Net sales		764,277			519,905			2,280,866			—			3,565,048
Cost of sales		(264,511	)		(198,536	)		(1,130,890	)		—			(1,593,937	)
Gross margin		499,766			321,369			1,149,976			—			1,971,111
Administrative expenses		(99,122	)		(29,111	)		(195,205	)		—			(323,438	)
Transmission and distribution expenses		(168,653	)		(131,288	)		(888,784	)					(1,188,725	)
Selling expenses		(97,313	)		(49,916	)		(282,701	)		—			(429,930	)
Operating income (loss)		134,678			111,054			(216,714	)		—			29,018
Gain from permanent investments		—			—			80,805			(80,801	)		4
Amortization of goodwill		572			3,281			13,332			(4,845	)		12,340
Loss from valuationof assets available for sale at net realizable value		—			—			(75,029	)					(75,029	)
Subtotal		135,250			114,335			(197,606	)		(85,646	)		(33,667	)
Financial income (expense) and holding gains (losses)
Generated by assets		(12,330	)		(495	)		53,928			(32,386	)		8,717
Generated by liabilities		(61,150	)		(21,082	)		(303,293	)		32,382			(353,143	)
Gain from investments in related companies		924			—			—			—			924
Other (expense) income, net		(2,546	)		3,084			(25,794	)		—			(25,256	)
Adjustment to present value of the retroactive tariff increase arising from the application of the new electricity rate schedule and other trade receivables		—			—			1,170			—			1,170
Gain from the purchase of notes		—			—			6,546			—			6,546
Income (loss) before income tax and minority interest		60,148			95,842			(465,049	)		(85,650	)		(394,709	)
Income tax		(17,455	)		(34,645	)		29,652			—			(22,448	)
Minority interest		(6,851	)		(6,269	)		—			(5,120	)		(18,240	)
Income (loss) for the year		35,842			54,928			(435,397	)		(90,770	)		(435,397	)

Consolidated balance sheet information as of December 31, 2011
Total assets		1,295,993			900,902			5,366,949			(1,819,411	)		5,744,432
Total liabilities		535,825			424,966			4,052,431			(640,177	)		4,373,045
Shareholders’ equity and minority interest		760,167			475,936			1,314,518			(1,179,235	)		1,371,387

Additional consolidated information as of December 31, 2011
Additions of property, plant and equipment		162,970			59,753			430,637			—			653,360

As of December 31, 2011, the Company decided to divest in EMDERSA, as such it has discontinued such operating segment (Note 25).

7. CAPITAL STOCK

As of December 31, 2011, 2010 and 2009, the Company’s capital stock amounts to 906,455,100 shares, represented by 462,292,111 common, book-entry Class A shares with a par value of one peso each and the right to one vote per share; 442,210,385 common, book-entry Class B shares with a par value of one peso each and the right to one vote per share; and 1,952,604 common, book-entry Class C shares with a par value of one peso each and the right to one vote per share. Each and every share maintains the same voting rights, i.e. one vote per share. There are no preferred shares of any kind, dividends and/or preferences in the event of liquidation, privileged participation rights, prices and dates, or unusual voting rights. Moreover, there are no significant terms of contracts allowing for either the issuance of additional shares or any commitment of a similar nature.

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As of December 31, 2011 and 2010, the Company’s capital stock, represented by 906,455,100 shares is comprised of the following:

	2011		2010		Class	% held
Holder	Number of shares
EASA (1)		462,292,111		462,292,111	“A”		51.00
Market in general (2)		442,210,366		442,210,366	“B”		48.78
Banco Nación (3)		1,952,604		1,952,604	“C”		0.22
New Equity Ventures LLC		19		19	“B”		0

(1) The shares are pledged in favor of the Argentine Government as evidenced by the certificate issued by Caja de Valores.

(2) Includes 9,412,500 treasury shares as of December 31, 2011 and 2010.

(3) Trustee of the Employee Stock Ownership Program.

On March 3, 2011, the Company held the General Annual Meeting which resolved by majority of votes to extend for 3 years the term for holding the treasury shares acquired within the framework of section 68 of Law No. 17,811 (text consolidated by Decree No. 677/01).

8. REGULATORY FRAMEWORK

General

The Company is subject to the regulatory framework provided under Law No. 24,065 and the regulations issued by the National Regulatory Authority for the Distribution of Electricity (ENRE).

The ENRE is empowered to approve and control tariffs, and control the quality levels of the service and the technical product, the commercial service and the compliance with public safety regulations, as established in the Concession Agreement. Failure to comply with the provisions of such Agreement and the rules and regulations governing the Company's business will make the Company liable to penalties that may include the forfeiture of the concession.

The Distribution Company’s obligations are, among others, to make the necessary investments and carry out the necessary maintenance works in order to ensure that the quality levels established for the provision of the service in the concession area will be complied with and that electricity supply and availability will be sufficient to meet the demand in due time, securing the sources of supply.

If the Company repeatedly fails to comply with the obligations assumed in the Concession Agreement, the grantor of the concession will be entitled to foreclose on the pledged Class A shares and sell them in a Public Bid. This, however, will not affect the continuity of the Holder of the concession. As of the date of issuance of these consolidated financial statements, there have been no events of non-compliance by the Company that could be regarded as included within the scope of this situation.

Furthermore, the Concession Agreement may be rescinded in the event of the Distribution Company undergoing bankruptcy proceedings. Additionally, if the Grantor of the Concession fails to discharge his obligations in such a manner that the Distribution Company is prevented from providing the Service or the Service is severely affected on a permanent basis, the Distribution Company may request, after demanding the regularization of such situation in a term of 90 days, that the agreement be rescinded.

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As of December 31, 2011 and 2010, the Company has accrued the penalties for resolutions not yet issued by the ENRE corresponding to the control years elapsed as of those dates. Additionally, the Company has applied the adjustment contemplated in the temporary tariff structure (caption b item vii) as well as the adjustments established by the electricity rate schedules applied during the fiscal year 2008, Resolutions Nos. 324/2008 and 628/2008.

On February 9, 2011, the Company was notified of the issuance of Resolution No. 32/2011 of the ENRE, whereby the Regulatory Authority fined the Company in the amount of 1,125 for the power cuts that had occurred between December 20 and December 31, 2010.

Furthermore, the Company was ordered to compensate those customers who had been affected by the power cuts in accordance with the following: 180 pesos to each small-demand residential customer who suffered power cuts that lasted from more than 12 continuous hours to 24 hours, 350 pesos to those who suffered power cuts that lasted from more than 24 continuous hours to 48 hours, and 450 pesos to those who suffered power cuts that lasted more than 48 continuous hours.

Said penalties amount to approximately 25,303, which, based on that mentioned in Note 16.e, have been recorded in Current liabilities under Other liabilities (Note 4.g).

As of December 31, 2011 and 2010, non-current liabilities for ENRE Penalties and Discounts amount to 506,598 and 455,421, respectively, and have been included in the Other non-current liabilities account (Notes 4.g and 14).

ENRE Penalties and Discounts included in the Adjustment Agreement are adjusted in accordance with the terms of said agreement (Note 8.c caption vii), whereas penalties imposed after the signing of the Adjustment Agreement are adjusted in accordance with the provisions of the resolutions pursuant to which such penalties were determined.

In addition, as of December 31, 2011, the Company’s Management has considered that the ENRE has mostly complied with the obligation to suspend lawsuits aimed at collecting penalties, without prejudice to maintaining an open discussion with the entity concerning the effective date of the Adjustment Agreement and, consequently, concerning the penalties included in the renegotiation and those subject to the criteria of the Transition Period.

b) Concession

The term of the concession is 95 years and may be extended for an additional maximum period of 10 years. The term of the concession is divided into management periods: a first period of 15 years and subsequent periods of 10 years each. At the end of each management period, the Class “A” shares representing 51% of the capital stock of EDENOR S.A., currently held by EASA, must be offered for sale through a public bidding. If EASA makes the highest bid, it will continue to hold the Class “A” shares, and no further disbursements will be necessary. On the contrary, if EASA is not the highest bidder, then the bidder who makes the highest bid shall pay EASA the amount of the bid in accordance with the conditions of the public bidding. The proceeds from the sale of the Class “A” shares will be delivered to EASA after deducting any amounts receivable to which the Grantor of the concession may be entitled.

On July 7, 2007 the Official Gazette published Resolution No. 467/07 of the ENRE pursuant to which the first management period is extended for 5 years to commence as from the date on which the Review of the Company Tariff Structure (RTI) goes into effect. Its original maturity would have taken place on August 31, 2007.

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In accordance with the provisions of Resolution No. 467/2007 of the ENRE, the commencement of the process for the sale of the shares shall take place when the five-year tariff period beginning after the ending of the RTI comes to an end. Additionally, the controlling shareholder -Electricidad Argentina S.A. - is authorized to present as bidder in the referred to process and if its offer is selected as the winning bid, the controlling company will not have to make any disbursement whatsoever to keep the control of Edenor.

The Company has the exclusive right to render electric power distribution and sales services within the concession area to all users who are not authorized to obtain their power supply from the Wholesale Electricity Market (MEM), thus being obliged to supply all the electric power that may be required in due time and in accordance with the established quality levels. In addition, the Company shall allow free access to its facilities to any MEM agents whenever required, under the terms of the Concession. No specific fee must be paid by the Company under the Concession Agreement during the term of the concession.

On January 6, 2002, the Federal Executive Power passed Law No. 25,561 whereby adjustment clauses in US dollars, as well as any other indexation mechanisms stipulated in the contracts entered into by the Federal Government, including those related to public utilities, were declared null and void as from such date. The resulting prices and rates were converted into Argentine pesos at a rate of 1 peso per US dollar. Furthermore, Law No. 25,561 authorized the Federal Executive Power to renegotiate public utility contracts taking certain requirements into account.

It is worth mentioning that both the declaration of economic emergency and the period to renegotiate public utility contracts were extended through December 31, 2013 by Law No. 26,729.

c) Adjustment Agreement entered into by and between Edenor and the Federal Government:

On September 21, 2005, the Company signed an Adjustment Agreement within the framework of the process of renegotiation of the Concession Agreement set forth in Law No. 25,561 and supplementary regulations; ratified on February 13, 2006.

The Adjustment Agreement established the following:

i)	the implementation of a Temporary Tariff Structure (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 rate of more than 15%, and an additional 5% average increase in the distribution added value, allocated to certain specified capital expenditures;
ii)	the requirement that during the term of said temporary tariff structure, 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 Review of the Company Tariff Structure (RTI) which will result in a new tariff structure 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 Regulatory Authority for the Distribution of Electricity 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 through the date on which they are effectively paid, using, for such purpose, the average increase recorded in the Company’s distribution costs as a result of the increases and adjustments granted as of each date;
viii)	the waiver of the penalties imposed by the ENRE that are payable to the National 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 term of the penalties imposed by the ENRE, which are described in item vii above, is 180 days after the approval of the Review of the Company Tariff Structure (RTI) 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.

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Said agreement was ratified by the Federal Executive Power through Decree No. 1957/06, signed by the President of Argentina on December 28, 2006 and published in the Official Gazette on January 8, 2007. This agreement stipulates the terms and conditions that, upon compliance with the other procedures required by the regulations, will be the fundamental basis of the Comprehensive Renegotiation of the Concession Agreement of the public service of electric power distribution and sale within the federal jurisdiction, between the Federal Executive Power and the Company.

Additionally, on February 5, 2007 the Official Gazette published Resolution No. 51/2007 of the ENRE which approves the electricity rate schedule resulting from the RTI applicable to consumption recorded as from February 1, 2007. This document provides for the following:

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;
c)	Implementation of the Cost Monitoring Mechanism (MMC) contemplated in Appendix I of the Adjustment Agreement, which for the six-month period commenced November 1, 2005 and ended April 30, 2006, showed a percentage of 8.032%. This percentage has been applied to non-residential consumption recorded from May 1, 2006 through January 31, 2007 (Note 14);
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 a) and b) above) and from May 1, 2006 through January 31, 2007 (item c) 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 Electricity 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.a);
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.

Revenues from the retroactive tariff increase deriving from the implementation of the new electricity rate schedule applicable to non-residential consumption for the period of November 2005 through January 31, 2007 have been fully recognized in the financial statements for the year ended December 31, 2007. Such amount, which totaled 218,591, has been invoiced in 55 equal and consecutive monthly installments, as described in item d) of this note.

Resolution No. 434/2007 established, among other things, that the obligations and commitments set forth in section 22 of the Adjustment Agreement be extended until the date on which the electricity rate schedule resulting from the RTI goes into effect, allowing the Company and its shareholders to resume the claims suspended as a consequence of the Adjustment Agreement if the new electricity rate schedule does not go into effect.

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Regulatory framework applicable to subsidiaries

The relevant information on the regulatory framework applicable to the subsidiary companies is summarized below.

The regulatory framework of the electricity market currently in effect is provided for by Law No. 24065, which created the National Regulatory Authority for the Distribution of Electricity (Ente Nacional Regulador de la Electricidad), hereinafter “ENRE”, as the regulatory and control authority. EMDERSA, through the Operating Companies, is also subject to compliance with the provincial laws and regulations issued by the provincial control authorities.

The corresponding provincial regulatory authorities are: (i) the Provincial Electric Power Regulatory Commission (Comisión Reguladora Provincial de Energía Eléctrica), hereinafter “CRPEE”, in the province of San Luis; (ii) the Privatizations Control Authority (Ente Único de Control de Privatizaciones), hereinafter “EUCOP”, in the province of La Rioja, (iii) the Public Services Regulatory Agency (Ente Regulador de los Servicios Públicos), hereinafter “ENRESP”, in the province of Salta, and (iv) the Electric Power Control Authority (Organismo de Control de la Energía Eléctrica), hereinafter “OCEBA”, in the province of Buenos Aires.

The regulatory authorities are responsible for the approval and control of electricity rates and for verifying that the electric power public service be provided in accordance with the quality levels agreed upon in the corresponding concession agreements.

Concession agreements

In accordance with the concession agreements, the Distribution Companies are required, among other things, (i) to provide the electric power service in conformity with the quality levels established in the concession agreement, and (ii) to make the necessary investments to properly maintain the provision of the service. Failure to comply with these requirements may make the Distribution Companies liable to penalties.

The concession agreements provide for the tariff structure, and include the initial electricity rate schedule as well as the procedure to be followed for the adjustment of the electricity rate schedule effective for a term of five years beginning as from the commencement date of the concession. Under these agreements, the electricity rates would be subject to periodical adjustments in order to reflect the variations recorded in electric power acquisition, transmission and distribution costs.

At the end of the term of the concession, all the assets owned by the Distribution Company, that are directly or indirectly used in the provision of the public service, will be transferred to the Provincial Government. The holders of the majority shareholding in Distribution Companies San Luis and La Rioja will receive, as payment for such transfer, the amount to be obtained from the sale of the totality of the shares to a new company to be organized by the respective Provincial Government, which will become the holder of the concession, after deducting any amounts receivable which the Provincial Government may have with the Distribution Company.

Distribuidora San Luis

The main features of the regulatory framework applicable to Distribuidora San Luis are described below.

The concession agreement for the provision of the public service of electricity distribution to be rendered on an exclusive basis in the Province of San Luis was entered into on March 2, 1993 for a period of 95 years that may be extended for a maximum period of ten years. The term of the concession is divided into nine management periods, a first period of 15 years, and eight subsequent periods of 10 years each. At the end of each management period, the Province of San Luis will organize an international public bid for the sale of the majority shareholding in Distribuidora San Luis, whose conditions will be similar to those pursuant to which EMDERSA acquired its interest. EMDERSA will be entitled to participate in the bid.

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The person or group who makes the highest bid will acquire the majority shareholding and pay the bid price to EMDERSA. If EMDERSA were the best bidder or if EMDERSA’s bid were equal to the highest bid, it will continue to hold the majority shareholding in Distribuidora San Luis, in which case no further payments to the Province of San Luis will be necessary nor any other obligations with respect to the bidding will be imposed on EMDERSA. There are no restrictions on the amount of EMDERSA’s bid. If EMDERSA did not make a bid or its bid were lower than the best bid made, the majority shareholding will be transferred to the bidder who made the highest bid and the price paid by the buyer will be delivered to EMDERSA, after deducting any amounts receivable which the Provincial Government may have with Distribuidora San Luis.

At the end of each management period, the Government of the Province of San Luis may revoke the exclusivity clause for the provision of the service or modify the area within which such exclusivity applies.

Distribuidora San Luis has duly submitted a presentation to the regulatory authorities concerning the Company’s economic and financial situation and has requested an emergency tariff adjustment, necessary to alleviate the effects of the aforementioned circumstances. In this framework, on January 4, 2006, the Economy Ministry of the Province issued Resolution No. 03 - MC2006, which established a temporary electricity rate adjustment. Subsequently, by Resolution No. 757 dated June 24, 2008, a new Electricity Rate Schedule, applicable as from June 1, 2008, was established.

The Resolution also establishes that the Company shall submit to the Provincial Electric Power Regulatory Commission (CRPEE) for its analysis, approval and subsequent audit, an Investment Plan in the sub-transmission and distribution network for an amount in excess of 20,000, to be executed within a maximum period of two years. The CRPEE, after having verified the technical specifications of the works plan and total invested amount, through note No. 1146/2010 dated December 30, 2010, considered that the investment plan submitted by Distribuidora San Luis under file 0000-2008-051032 000 had been complied with.

Subsequently, on June 15, 2011, the Ministry of Public Works and Infrastructure issued Resolution No. 597-MOPeI-2011, whereby it approved an Electricity Rate Schedule, which resulted in an average increase of approximately 9% applicable as from June 1, 2011, and an investment plan to be carried out.

By note No. 8752/11, the Energy Secretariat established that any rate increase from the rate values corresponding to November 2011 applicable to final users of distribution agents and/or suppliers of the public service of electric power distribution, is to be regarded as a component of the wholesale purchase cost of the distribution agent and/or supplier of the public service of electric power distribution.

As of the date of these consolidated financial statements, Distribuidora San Luis continues renegotiating certain terms and conditions of the concession agreement with the regulatory authorities. Although it is not possible to anticipate the final wording of said terms and conditions, the Board of Directors of Distribuidora San Luis believes that they will not have a negative impact on the business.

Distribuidora La Rioja

The main features of the regulatory framework applicable to Distribuidora La Rioja are described below.

The concession agreement for the provision of the public service of electricity distribution and sale to be rendered on an exclusive basis in the Province of La Rioja was entered into on June 1, 1995 for a period of 95 years that may be extended for an additional period of ten years. The term of the concession is divided into nine management periods, a first period of 15 years, and eight subsequent periods of 10 years each. At the end of each management period, the Regulatory Authority will call for bids for the sale of the majority shareholding in Distribuidora La Rioja.

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EMDERSA will be entitled to present its bid simultaneously with the other bidders and in accordance with the terms and conditions of the bid. If EMDERSA’s bid were higher than or equal to the best economic offer, it will continue to hold the majority shareholding and no further disbursements will be required.

On December 1, 2008, Distribuidora La Rioja and the Commission for the Renegotiation of Contracts, comprised of the Economy Minister, the Infrastructure Minister and the General and Legal Secretary of the Provincial Government, entered into a Memorandum of Understanding, which approved amendments to the Concession Agreement for the Public Service of Electricity Distribution and Sale, in accordance with the guidelines established in the Public Hearing for the Revision of Rates held in October 2008. The Memorandum of Understanding approves a new Electricity Rate Schedule for the Concession Agreement as well as a Customer Application Schedule, effective for consumption recorded as from November 1, 2008, with an authorized 16% average increase.

Furthermore, it was agreed that the debt owed by the Government to the Distribution Company for government grants corresponding to the period 2007/2008 and for other concepts, would be settled with the assignment of electric infrastructure works carried out and to be carried out by the Government. In addition, a cost monitoring mechanism, which will allow Distribuidora La Rioja (should the conditions stipulated in the Memorandum of Understanding concerning increases in costs and expenses be met) to request that the EUCOP begin a procedure for the analysis and review of rates, was also implemented.

In the 2010 fiscal year, the increases recorded in the Distribution Company’s costs exceeded the conditions stipulated in the Memorandum of Understanding for the Readjustment of the Agreement for the Provision of the Public Service of Electricity Distribution signed with the Government of the Province of La Rioja and ratified by the Governor through Decree FEP No. 2318/08. Therefore, in February 2011, the Distribution Company submitted Note GPRR No. 0110/11 with the supporting documentation of the greater costs borne by EDELAR S.A.

By Note No. 236 of the EUCOP dated March 28, 2011, the Board of the Control Authority rejected the distribution company’s request. On April 11, 2011, by Note GPRR No. 0258/2011 addressed to the EUCOP, the Distribution Company requested that such decision be reconsidered.

On August 19, 2011, by Resolution No. 1 Record 66, the EUCOP, in accordance with the provisions of section 3, authorized a 4.5% increase to be applied as from the August-September-October 2011 quarter. For this purpose, Distribuidora La Rioja is required to submit, for the EUCOP’s approval, an investment plan for distribution works.

By Resolution No. 1 Record 81 dated October 20, 2011, the EUCOP, in accordance with the provisions of section 3, authorized the application of the rate schedule for the period August, September and October 2011, approving the investment plan duly submitted by the Company.

Distribuidora Salta and ESED

The main features of the regulatory framework applicable to Distribuidora Salta and ESED are described below.

The concession agreement for the provision of the public service of electricity distribution -which is divided into two different markets: the concentrated (urban) market and the isolated (isolated generation with non-conventional methods) market- to be rendered on an exclusive basis in the Province of Salta was entered into on August 12, 1996 for a period of 50 years that may be extended for a maximum period of ten years.

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The term of the concession is divided into three management periods, a first period of 20 years, and two subsequent periods of 15 years each. At the end of each management period, the ENRESP will organize a public bid for the sale of the majority shareholding in Distribuidora Salta. The investment company must present its own bid simultaneously with the other bidders and in accordance with the terms and conditions of the bid. If the investment company’s bid were higher than or equal to the best economic offer, it will continue to hold the majority shareholding and no further disbursements will be required.

Empresa Distribuidora de Energía Norte S.A.

With regard to the adjustment for the increases recorded in costs, the Distribution Company continued to submit the information on the updated values of the Operative Costs Sample as well as on the valuation of the assets available for the rendering of service, as stipulated in caption 4.4 of Section 4 of the Protocol of Understanding. The last presentation was made in June 2010, which has been ratified by the Provincial Energy Administration.

In addition, Ministerial Resolution No. 415/11, published on June 8, 2011, established a 9% average increase in rates. The Electricity Rate Schedules approved by this resolution are applicable as from June 1, 2011 and contemplate for the June-September period, the suspension of the application of the Seasonal Prices set forth by Resolution No. 1169/08 of the Energy Secretariat for residential customers whose consumption exceeds 1,000 kWh bimonthly as defined by Resolution No. 202/11 of that Secretariat.

Furthermore, the Infrastructure Ministry of the Province of Buenos Aires issued Resolution No. 463/11 pursuant to which the System for the Expansion of Networks of the Concession Agreement and the complementary regulations was supplemented and/or modified. With the issuance of such resolution, it is the Government’s intention to implement the Reimbursable Contributions System currently in place at the national level. At present, the necessary activities aimed at regulating such resolution and assessing its impact on EDEN S.A.’ regulatory economy are being carried out.

9. FRAMEWORK AGREEMENT

The Addendum to the New Framework Agreement entered into by the Federal Government, the Government of the Province of Buenos Aires and the Company on June 18, 2009, which contemplates its renewal for periods of four years with the consent of the parties involved, expired on December 31, 2010. The purpose of the Framework Agreement is to establish the guidelines under which the Company is to supply electricity to low-income areas and shantytowns.

On July 22, 2011, the Company, together with EDESUR S.A. and EDELAP S.A., entered into an Addendum with the Federal Government and the Government of the Province of Buenos Aires, for the renewal for a term of four years of the New Framework Agreement that had been signed on October 6, 2003.

The renewal is yet to be approved by the Ministry of Federal Planning, Public Investment and Services. Nevertheless, the Company has continued supplying electricity to low-income areas and shantytowns and has submitted the information related to this consumption to control authorities, under the assumption that the Agreement will continue in full force and effect in the successive periods.

As of December 31, 2011 and 2010, balances with the Federal Government and the Government of the Province of Buenos Aires amount to 54,272 and 33,047, respectively (Notes 3.c, 3.u and 4.a).

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With regard to the amount receivable that the Company had with the Province of Buenos Aires, in March 2010, the Company entered into a Payment Plan Agreement with the Government of that Province pursuant to which the Government of the Province of Buenos Aires verified and paid with Bonds for the Cancellation of Debts of the Province of Buenos Aires, the debt as of October 31, 2009 stated therein in the amount of 32,797. As of December 31, 2010, there is no outstanding balance for this concept (Note 4.a).

As of the date of issuance of these consolidated financial statements, the Company has made the corresponding presentations and is awaiting the extension of this Agreement. Furthermore, and following a criterion of prudence, the Company has decided to record an allowance in the amount of 28,600 for the electricity receivables accrued during the fiscal year 2011 until the administrative proceedings necessary for the aforementioned extension to come into effect are carried out by the different application authorities (Note 3.h and Note 31 Exhibit E).

10. CORPORATE NOTES AND LOANS

CORPORATE NOTES PROGRAM

On October 25, 2010, the Company issued Corporate Notes for a nominal value of USD 140 million. Furthermore, as a result of the exchange offer, the Company accepted and exchanged Class 7 Corporate Notes for a nominal value of USD 90,301,000, for Corporate Notes due 2022 for a nominal value of USD 90,301,000 and paid USD 9,532,000 in cash, including payments of accrued and unpaid premium and interest on Class 7 Corporate Notes; and accepted and purchased Class 7 Corporate Notes for a nominal value of USD 33,593,000, having paid USD 35,750,000, including the payment of accrued and unpaid interest on Class 7 Corporate Notes.

The new Class 9 Corporate Notes for a total amount of USD 230,301,000 have been issued at an issue price of 100% of the principal amount. The twelve-year term corporate notes accrue interest as from the date of issuance at a fixed rate of 9.75%, payable semiannually on October 25 and April 25 of each year. The first interest payment fell due on April 25, 2011. The principal will be amortized in a lump sum payment at maturity date in 2022. The Company has requested authorization for the listing of the Corporate Notes on the Buenos Aires Stock Exchange and admission for trading on the Mercado Abierto Electrónico S.A. (the OTC market of Argentina), as well as authorization for the listing of the Corporate Notes on the Luxembourg Stock Exchange and admission for trading on the Euro MTF Market, which is the alternative market of the Luxembourg Stock Exchange.

On April 26, 2011, the Company issued Corporate Notes for a nominal value of USD 69,699,000, thereby completing the total original amount of the series of up to USD 300 million.

The Company used the net proceeds from the sale of the Corporate Notes in these offers to refinance part of its short-term debt, finance the capital expenditures plan, and increase working capital.

Furthermore, in the first quarter of the fiscal year being reported, the Company purchased in successive operations, at market prices, “Class A floating rate par corporate notes” due in 2019, for a nominal value of USD 12,656,000. The result of this transaction as of December 31, 2011 has been disclosed in the Statement of Operations under Gain (Loss) from the purchase of notes.

Additionally, in the September-December 2011 period, the Company purchased in successive operations, at market prices, “Class 9 fixed rate par corporate notes” due in 2022, for a nominal value of USD 41,453,000. The result of this transaction as of December 31, 2011 has been disclosed in the Statement of Operations under Gain (Loss) from the purchase of notes.

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Furthermore, the change in the debt maturity profile allowed the Company to have the necessary funds to be able to carry out the acquisitions of companies mentioned in Notes 27 and 28.

The Company’s debt structure as of December 31, 2011 and 2010 was comprised of the following Notes:

Debt issued in United States dollars:

Corporate Notes	Class		Debt structure as of Dec. 31, 2010 (in thousands of USD)		Debt purchase as of Dec. 31, 2011 (in thousands of USD)			Issuance April 26, 2011 (in thousands of USD)		Debt structure as of Dec. 31, 2011 (in thousands of USD)		Balance as of Dec. 31, 2011 (Note 4.d)		Balance as of Dec. 31, 2010 (Note 4.d)
Floating Rate Par Note		A		12,656		(12,656	)		0		0		0		50,318
Fixed Rate Par Note	��	7		24,760		0			0		24,760		106,567		98,446
Fixed Rate Par Note (1)		9		219,184		(41,453	)		69,699		247,430		1,064,759		871,476
Total				256,600		(54,109	)		69,699		272,190		1,171,326		1,020,240

As of December 31, 2011, Class 9 fixed rate par corporate notes held by the Company amount to USD 41,453 thousand.

(1) Net of issuance expenses.

Debt issued in Argentine pesos:

	Debt Structure (in thousands of pesos)
Corporate Notes	Class		As of Dec. 31, 2010 (Note 4.d)		As of Dec. 31, 2011 (Note 4.d)
Floating Rate Par Note		8		58,236		34,951
Total				58,236		34,951

The principal amortization schedule of the corporate notes debt, broken down by year of total debt, without considering possible adjustments, prepayments, redemptions or cancellations is detailed in the table below:

Year	Amount
2011		0
2012		23,285
2013		11,666
2014		0
2015		0
2016		0
2017		106,567
2018		0
2019		0
2020		0
2021		0
2022 (1)		1,064,759
		1,206,277

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(1) Net of issuance expenses.

The main covenants are the following:

1) Negative Covenants

The terms and conditions of the Corporate Notes include a series of negative covenants that limit the Company’s actions with regard to, among others, the following:

- 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 companies;

- making certain payments (including, among others, dividends, purchases of Edenor’s common shares or payments on subordinated debt).

2) Suspension of Covenants

Certain negative covenants stipulated in the terms and conditions of the Corporate Notes will be suspended or adjusted if:

(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.

If the Company subsequently losses its Investment Grade rating or its Level of Indebtedness is higher than 2.5, as applicable, the suspended negative covenants will be once again in effect.

However, the reinstatement of the covenants will not affect those acts which the Company may have performed during the suspension of such covenants.

FINANCIAL LOANS

In August 2011, the Company took out a financial loan from Banco Ciudad for a principal amount of 5,800 accruing interest at an annual rate of 14.8% and falling due on February 6, 2012. Interest is paid on a monthly basis as from August 31, 2011. As of the closing date of these consolidated financial statements, the Company entered into an Addendum with Banco Ciudad pursuant to which the maturity date of the aforementioned loan is extended to February 2014.

Additionally, in March and June 2011, the Company took out loans from Banco de la Provincia de Buenos Aires for a total principal amount of 22,000 accruing interest at an annual rate of 14% and falling due in March 2012, May 2012 and June 2014, respectively. Interest is paid on a monthly basis.

As of December 31, 2011, the outstanding balance under the aforementioned loans amounts to 13,761.

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Financing structure of Subsidiaries

The relevant information on the subsidiary companies’ financing structure is summarized below.

EMDERSA

f) Loans

In July 2010, Banco Itaú Argentina S.A. and Standard Bank Argentina S.A. granted loans to Distribuidora Salta, Distribuidora San Luis and Distribuidora La Rioja, with the aim of facilitating the implementation of the syndication process of a medium-term credit facility in pesos, whose main purpose were the early repayment of the debt under the corporate notes.

The amount disbursed under these loans totaled 163,850. The aforementioned facility became part of a medium-term syndicated loan that is part of the debt refinancing of Distribuidora Salta, Distribuidora San Luis and Distribuidora La Rioja, and whose main terms and conditions were: final maturity in July 2013 and repayment of principal in quarterly payments as from January 2012, in accordance with the following amortization schedule:

Amortization of principal
Date	%	Date	%

January 2012	11	January 2013	11
April 2012	11	April 2013	15
July 2012	11	July 2013	30
October 2012	11

The medium-term facility, which amounted to 208,500, was finally agreed and fully disbursed on July 15, 2010. The banks comprising the group of lenders were: Standard Bank Argentina S.A., Banco Hipotecario S.A., Banco de Galicia y Buenos Aires S.A., Banco Ciudad de Buenos Aires and Banco Itaú Argentina S.A. The syndicated loans stipulate certain conditions, restrictions and covenants which are to be assumed and complied with by the company.

The funds granted to Distribuidora La Rioja for an amount equivalent to 21,200 have been allocated to three time deposits in charge of the agent of the syndicated loan (Standard Bank Argentina S.A.).

During the term of this financing, EMDERSA as well as Distribuidora Salta, Distribuidora La Rioja and Distribuidora San Luis are required to comply, in each case and among other covenants, with the following ratios in accordance with their respective financial statements:

§ The ratio of Consolidated Financial Debt-to-Consolidated EBIDTA must be lower than or equal to:

—	EMDERSA: 2.25
—	Distribuidora Salta: 3.25
—	Distribuidora La Rioja: 2.40
—	Distribuidora San Luis: 1.50

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§ The ratio of Consolidated EBIDTA-to-Consolidated Financial Expense must be higher than or equal to:

—	EMDERSA: 3.00
—	Distribuidora Salta: 1.80
—	Distribuidora La Rioja: 2.00
—	Distribuidora San Luis: 3.00

On March 4, 2011, date on which Empresa Distribuidora y Comercializadora Norte S.A. (EDENOR) acquired the majority shareholding in EMDERSA, EDENOR disbursed a loan for 200,000 falling due on April 30, 2011 and accruing interest at an annual rate of 16%, which was applied, among other things, to the early repayment of 119,888 under the syndicated loan, plus interest accrued and applicable taxes as of that date for 5,913, with the remaining balance being applied to the repayment of a short-term bank debt.

On April 29, 2011, the Company refinanced the loans granted to EMDERSA’s subsidiary distribution companies for 31,178 in the case of Distribuidora La Rioja, 131,319 in the case of Distribuidora Salta and 37,502 in the case of Distribuidora San Luis, at an annual rate of 16% on each of them, with interest falling due semi-annually on October 31, 2011 and April 30, 2012 and principal falling due in its entirety on the latter date.

The financing conditions are in accordance with those usually obtained in the market for this type of transactions.

On October 25, 2011, by virtue of the corporate reorganization, Distribuidora San Luis repaid the debt with the Company for an amount of 37,503, which comprised principal, compensatory interest, commissions, expenses and other concepts applicable thereto (Notes 27 and 28).

With regard to the proposal made to the banks concerning the early repayment of the syndicated loan, it was proposed that the allocation of funds as stipulated in the original proposal be modified, and that the early repaid principal amounts be applied to the first principal due dates instead of applying them to the final maturities of the loan. Accordingly, the remaining maturities of this debt are, at present, the following:

Date	Amount

April 15, 2013		26,062
July 15, 2013		62,550

Between October 17 and October 25, 2011, an amount of 4,842 corresponding to the fifth period of interest on the syndicated loan was paid, which makes a total of 26,766 during the current year.

Furthermore, on October 25, 2011 Distribuidora San Luis made an early repayment of the outstanding balance of the syndicated loan received on July 15, 2010, for an amount of 20,400 plus interest accrued and applicable taxes as of that date.

Both early repayments were made with funds disbursed under a new four-year-term syndicated loan for 60,000 granted to Distribuidora San Luis on October 25, 2011. Interest will be paid quarterly and principal will be amortized in semi-annual and consecutive installments of 7,500 each, with the first installment falling due on April 25, 2012 and the last one on October 25, 2015. The banks comprising the group of lenders are Banco Itaú Argentina S.A., Standard Bank Argentina S.A. and Banco Ciudad de Buenos Aires.

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During the term of this financing, Distribuidora San Luis is required to comply, among other covenants, with the following ratios in accordance with its financial statements:

§	The financial debt-to-EBITDA ratio must be lower than or equal to 1.50
§	The EBITDA-to-financial expense ratio must be higher than or equal to 3.00

At the date of these consolidated financial statements, the Company and its subsidiaries are in complice with all its debt covenants.

g) Class IV and Class V Corporate Notes

The Boards of Directors of Distribuidora Salta and Distribuidora La Rioja, at their meetings of September 17, 2010, authorized in each case, the issuance of a new class of Corporate Notes for a principal amount of up to 20,000 (the “Class IV and Class V Corporate Notes”, respectively) for each of them. This placement is subject to compliance with the Public Offering Program for the Issuance of Medium-Term Debt Guaranteed by EMDERSA, authorized by Resolution No. 15,433, issued by the CNV on July 27, 2006.

On October 29, 2010, the CNV authorized both for Distribuidora Salta and Distribuidora La Rioja, the placement of the Class IV Corporate Notes for an amount of 15,000, which could be increased to 20,000.

The term for the placement of those instruments came to an end on November 5, 2010. Due to the result obtained, it was resolved that the issuance of Class IV and Class V Corporate Notes be made for a Nominal Value of 15,200, in each case, and that the issuance and payment date be November 10, 2010. The principal will be amortized quarterly, in four equal and consecutive payments as from August 10, 2011.

In accordance with the terms and conditions of the Class IV and Class V Corporate Notes, those companies paid (i) interest accrued in the period commenced August 10, 2011 and ended November 9, 2011 for an amount of 1,059, at an annual interest rate of 18%, which makes a total of 4,576 during the current fiscal year, and (ii) two principal amortization coupons corresponding to 50% thereof, for an amount of 15,200.

Furthermore, on October 18, 2011 and December 1, 2011, the Shareholders’ Meetings of Distribuidora Salta and Distribuidora La Rioja approved a Global Program for the issuance of Corporate Notes for an amount of up to USD 200,000,000 and 50,000,000, respectively, whose term will be five years to commence as from the date of its approval by the National Securities Commission (CNV).

In the case of Distribuidora Salta, the creation of the program was authorized by Resolution No. 16,702 of the CNV dated December 14, 2011. Distribuidora Salta initiated the placement process of the Class I – Series I Simple Corporate Notes (non convertible into shares) for a nominal value of up to USD 65,000,000.

Due to the unfavorable conditions of the international financial markets, on February 17, 2012, Distribuidora Salta suspended the subscription period of the aforementioned corporate notes, as well as the placement and issuance thereof.

AESEBA

Loans

On March 4, 2011, EDEN S.A. made an early repayment of the balance outstanding as of that date under the financial loan granted by Standard Bank Argentina S.A. and HSBC Argentina S.A. Such repayment was made with the Distribution Company’s own funds and the proceeds of a loan in local currency for 80,000 granted as of that date to EDEN S.A. by the Company. As stipulated in the loan agreement, the loan accrues compensatory interest at an annual nominal rate of 16% and both principal and interest are to be fully paid at maturity, which took place on April 30, 2011.

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On April 29, 2011, EDEN S.A. and the Company agreed to extend the maturity date of the loan to April 30, 2012, having paid at that time interest accrued as of April 30, 2011 for 1,999. Additionally, the new agreement stipulates that interest will be paid semi-annually in arrears, with the first installment falling due on October 31, 2011.

Furthermore, on November 3, 2011, EDEN S.A. entered into an agreement with the Company for the granting of a USD 3,100,000 one-year term loan to be applied to the settlement of the debt with the management operator. As stipulated in the agreement, the loan accrues compensatory interest at an annual nominal rate of 8.5% payable quarterly, with principal falling due at maturity.

11. DERIVATIVE FINANCIAL INSTRUMENTS

a) Corporate Notes – Cash flows swap

In November 2010, the Company carried out a transaction with a derivative financial instrument with JP Morgan Chase Bank NA with the aim of hedging the foreign currency exchange rate of the cash flows and derivatives of interest payment transactions.

This instrument provides an economic and financial hedge of the amounts in foreign currency that the Company must pay on the interest payment dates of its financial debt –Class 9 Fixed Rate Corporate Notes (Note10)-, falling due on April 25, 2011, October 25, 2011, April 25, 2012 and October 25, 2012, in the event of fluctuations in foreign currency exchange rates.

Additionally, in April 2011, the Company carried out a transaction with a derivative financial instrument with Deutsche Bank S.A. with the aim of hedging the foreign currency exchange rate of the cash flows and derivatives of interest payment transactions arising from the new issue of Class 9 fixed rate corporate notes for up to USD 69,699,000 (Note 10), payable on October 25, 2011, April 25, 2012 and October 25, 2012.

For their recording in the accounting the Company has followed the provisions of Technical Resolution No. 18 of the Argentine Federation of Professional Councils in Economic Sciences (FACPCE), which requires that derivative instruments be recorded at their net realizable value or settlement value, depending on whether they have been classified as assets or liabilities, with a contra-account in the financial gains or losses for the year.

As of December 31, 2011 and 2010, the economic impact of these transactions resulted in a loss of 2,399 and 7.253, respectively, which has been recorded in the Financial income (expense) and holding gains (losses) generated by liabilities account of the Statement of Operations under Exchange difference.

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b) Forward and Futures Contracts

During the years ended December 31, 2011, 2010 and 2009, the Company entered into forward and futures contracts with the aim of using them as economic instruments in order to mitigate the risk generated by the fluctuations in the US dollar rate of exchange.

As of December 31, 2011, 2010 and 2009, the economic impact of these transactions resulted in a gain of 179, a loss of 14,831 and a loss of 12,266, respectively, which have been recorded in the Financial income (expense) and holding gains (losses) generated by assets account of the Statement of Operations under Holding loss.

As of December 31, 2011 and 2010, the aforementioned transactions were fully settled.

12. RESTRICTED ASSETS OF SUBSIDIARIES

a. Assets used in the provision of the public service

In accordance with the concession agreement, neither EMDERSA nor its subsidiaries may pledge the assets used in the provision of the public service or grant any other security interest thereon in favor of third parties, without prejudice to their right to freely dispose of those assets which in the future may become inadequate or unnecessary for such purpose. This prohibition does not apply in the case of security interests granted over an asset at the time of its acquisition and/or construction to secure payment of the purchase price and/or installation.

b. Guarantees - Distribuidora Salta, San Luis, La Rioja, ESED

The holders of ESED’s class "A" shares may only modify their interest or sell their shares with the ENRESP’s authorization. Additionally, and as stipulated in the concession agreement, all the class "A" shares have been pledged in favor of the Province of Salta as security for the performance of the obligations assumed by the Distribution Company. The shares will be pledged during the entire term of the concession, and will continue to be pledged in the successive transfers of the majority shareholding. Should ESED fail to comply with any of the obligations assumed in the concession agreement, the Provincial Government may foreclose the pledge, by selling the shares in a Public Bid.

Furthermore, the Class "A" shares, representing 51% of the capital stock of Distribuidora Salta, Distribuidora San Luis and Distribuidora La Rioja have been pledged in favor of the Grantors of the Concessions as security for the performance of the obligations assumed in the Concession Agreements.

c. Frozen funds - Distribuidora Salta

As of December 31, 2011 and 2010, Distribuidora Salta’s funds that have been frozen as a consequence of attachment orders, amount to 35 and 82, respectively.

13. OBLIGATIONS AND RESTRICTIONS ARISING FROM THE PRIVATIZATION

Restriction on the transfer of the Company’s common shares

The Company’s by-laws provide that Class “A” shareholders may transfer their shares only with the prior approval of the ENRE. The ENRE must communicate its decision within 90 days upon submission of the request for such approval, otherwise the transfer will be deemed approved.

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Furthermore, Caja de Valores S.A. (the Public Register Office), which keeps the Share Register of the shares, is entitled (as stated in the Company’s by-laws) to reject such entries which, at its criterion, do not comply with the rules for the transfer of common shares included in (i) the Argentine Business Organizations Law, (ii) the Concession Agreement and (iii) the Company’s by-laws.

In addition, the Class “A” shares will be pledged during the entire term of the concession as security for the performance of the obligations assumed under the Concession Agreement.

Additionally, in connection with the issuance of Corporate Notes (Note 10), EASA is required to be the beneficial owner and owner of record of not less than 51% of EDENOR’s issued, voting and outstanding shares.

Section ten of the Adjustment Agreement signed with the Grantor of the Concession and ratified by Decree No. 1957/06 stipulates that from the signing of the agreement through the end of the Contractual Transition Period, the majority shareholders may not modify their ownership interest nor sell their shares.

Furthermore, in accordance with the restructuring of the totality of EASA’s financial debt that ended on July 19, 2006, if EASA did not comply with its payment obligations under the new debt, its creditors could obtain an attachment order against the Company’s Class A shares held by EASA, and, consequently, the Argentine Government would be entitled, as stipulated in the concession agreement, to foreclose on the pledged shares, with an adverse effect on the results of its operations.

14. TARIFF STRUCTURE REVIEW

Review of the Company Tariff Structure (RTI) - Cost Monitoring Mechanism (MMC) - PUREE – Electricity rate schedules

Review of the Company Tariff Structure (RTI)

On July 30, 2008, the National Energy Secretariat issued Resolution No. 865/2008 which modifies Resolution No. 434/2007 and establishes that the electricity rate schedule resulting from the Review of the Company Tariff Structure (RTI) will go into effect in February 2009. As of the date of issuance of these consolidated financial statements, no resolution has been issued concerning the application of the electricity rate schedule resulting from such process.

With regard to the commencement of the Review of the Tariff Structure, the ENRE has begun this process, and, on November 12, 2009, the Company submitted its revenue requirements proposal for the new period, which included the grounds and criteria based on which the request is made.

By Note No. 91,241, notified to the Company on December 18, 2009, the ENRE requested that the Company submit the technical rate schedules resulting from the preparation of its proposal, which have been duly submitted.

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Program for the Rational Use of Electric Power (PUREE), Cost Monitoring Mechanism (MMC)

On October 4, 2007 the Official Gazette published Resolution No. 1037/2007 of the National Energy Secretariat which established that the amounts receivable that the Company maintains in the Trade receivables account as Unbilled –National Fund of Electricity, for “Quarterly Adjustment Coefficient of the National Fund of Electricity” (section 1 of Law No. 25,957) for 3,353 and 3,437 as of December 31, 2011 and 2010, respectively (Note 4.a) as well as the amounts corresponding to the Cost Monitoring Mechanism (MMC) for the period May 2006 through April 2007 (Note 8.c items b and c) be deducted from the funds resulting from the difference between surcharges billed and discounts made to customers, resulting from the implementation of the Program for the Rational Use of Electric Power (PUREE), until their transfer to the tariff is granted by the regulatory authority. On October 25, 2007 the ENRE issued Resolution No. 710/2007 which approved the aforementioned MMC compensation mechanism.

By Note No. 1383 dated November 26, 2008 of the National Energy Secretariat, the ENRE was instructed to consider the earmarking of the funds deriving from the application of the MMC corresponding to the period May 2007 through October 2007 whose recognition was pending, and to allow that such funds be deducted from the excess funds deriving from the application of the PUREE, in accordance with the provisions of Resolution No. 1037/2007 of the National Energy Secretariat. The MMC adjustment for the period May 2007 through October 2007, applicable as from November 1, 2007, is 7.56% and amounted to 45,531 (Note 4.a).

Additionally, as of December 31, 2011, the Company has submitted to the ENRE the MMC adjustment requests, in accordance with the following detail:

Assessment Period	Application Date	MMC Adjustment
November 2007 - April 2008	May 2008	5.791%
May 2008 – October 2008	November 2008	5.684%
November 2008 - April 2009	May 2009	5.068%
May 2009 – October 2009	November 2009	5.041%
November 2009 – April 2010	May 2010	7.103%
May 2010 – October 2010	November 2010	7.240%
November 2010 – April 2011	May 2011	6.104%
May 2011 – October 2011	November 2011	7.721%

As of the date of issuance of these consolidated financial statements, the aforementioned adjustments as well as the basis for their application are pending approval by the ENRE, for which reason the Company is unable to reasonably estimate the amount of the submitted requests. Therefore, no amount receivable for this concept has been recorded by the Company in these consolidated financial statements until approval is granted by the control authorities.

Furthermore, the necessary steps to regularize the situation are being taken in order to restore the economic and financial equation of the business, in view of the increase recorded in operating costs.

As of December 31, 2011 and 2010 liabilities generated by the excess funds deriving from the application of the PUREE, amount to 867,088 and 529,097 respectively, and have been disclosed in the Other Non-Current Liabilities account (Note 4.g). This increase in liabilities is due to the fact that the Company was allowed to keep such funds (Resolution No. 1037/07 of the Energy Secretariat) in order to cover the MMC increases not transferred to the tariff, as previously described.

Electricity rate schedules

On July 31, 2008, the ENRE issued Resolution No. 324/2008 which approves the values of the Company’s electricity rate schedule that contemplated the partial application of the adjustments corresponding to the Cost Monitoring Mechanism (MMC) and their transfer to the tariff. The aforementioned electricity rate schedule increased the Company’s distribution added value by 17.9% and has been applied to consumption recorded as from July 1, 2008. Therefore, the increase in rates for final users has ranged from 0% to 30%, on average, depending on consumption.

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Furthermore, on October 31, 2008, the National Energy Secretariat issued Resolution No. 1169/2008 which approved the new seasonal reference prices of power and energy in the Wholesale Electricity Market (MEM). Consequently, the ENRE issued Resolution No. 628/2008 which approved the values of the electricity rate schedule to be applied as from October 1, 2008.

The aforementioned electricity rate schedule included the transfer of the increase in the seasonal energy price to tariffs, with the aim of reducing Federal Government grants to the electricity sector, without increasing the Company’s distribution added value.

By Resolution No. 202/2011, the National Energy Secretariat approved the winter scheduling for the Wholesale Electricity Market (MEM) for the period May 1 – October 31, 2011. Therefore, considering the level of electricity consumption during winter and with the aim of not negatively affecting user payment capacity, the National Energy Secretariat resolved to suspend the application of sections 6, 7, and 8 of its Resolution No. 1169/2008 from June 1, 2011 through September 30, 2011. It must be pointed out that this procedure had been previously implemented by the National Energy Secretariat in 2009 and in 2010 by its Resolutions Nos. 652/2009 and 347/10, respectively, which, at that time, gave rise to the issuance of Resolutions Nos. 433/2009 and 294/10 of the ENRE, ratified for this year by Resolution No. 202/11 of the Energy Secretariat.

On November 7, 2011, the Energy Secretariat issued Resolution No. 1301/11, which established the summer scheduling, eliminating government grants to certain economic activities, which, in accordance with the provisions of the Resolution, are in condition to pay the actual cost that needs to be incurred for being supplied with their demand for electricity. The removal of government grants has been extended to residential customers, who were classified by geographical areas and type of residence. The modification related only to electricity purchase prices in the Wholesale Electricity Market, for which reason the Company’s VAD (Distribution Added Value) remained practically unchanged.

Like in previous years, Resolution No. 1037/07 of the Energy Secretariat, ratified by Note No. 1383/08 of that Secretariat, continued to produce effects. The aforementioned resolution modified the earmarking of the funds resulting from the application of the Program for the Rational Use of Electric Power (“PUREE”), being it possible to deduct therefrom a) the amounts paid by the Company as Quarterly Adjustment Coefficient (“CAT”) implemented by Section 1 of Law No. 25,957, to calculate the total value of the National Fund of Electricity (FNEE); and b) the amounts corresponding to the electricity rates adjustments due to the application of the Cost Monitoring Mechanism (“MMC”) established in the Adjustment Agreement, until the transfer to the tariff of any of the aforementioned concepts, as applicable, is recognized.

The relevant information on both the Review of the subsidiary companies’ Tariff Structure and the Adjustment for increases recorded in the subsidiaries’ costs is summarized below.

a. Distribuidora Salta - EDESA S.A. - ESED S.A.

EDESA S.A.

By Resolution No. 74/01, the Public Services Regulatory Agency of Salta (ENRESP) established that due to the lack of sufficient elements to approve a new Tariff Structure and Electricity Rate Schedule that could go into effect in the contemplated date, the tariff structure, the electricity rate schedule and the general conditions for the electricity distribution service in Salta, included in the Concession Agreement, would continue to be temporarily in effect.

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The review of the tariff structure was affected by the provisions of Law No. 25,561 and Decrees Nos. 214 and 260 of the Federal Government.

Furthermore, the Public Services Regulatory Agency of Salta (ENRESP) issued Resolution No. 160/06, which established the creation of a "reference indicator" that allows the Distribution Company to request the readjustment of rate values if the variation recorded in such indicator exceeds 5%. The transfer to the electricity rate will only take place after the approval of the ENRESP, as long as the Distribution Company has submitted a well-grounded presentation, demonstrating the real increase recorded in its costs as a consequence of inflation. On the contrary, if the indicator shows a negative result of more than 5%, the ENRESP will be entitled to analyze and adjust the rates accordingly.

In April 2011, EDESA S.A. submitted to the ENRESP a new proposal for the adjustment of electricity rates.

On June 16, 2011, by Resolution No. 533/11, issued within the framework of the provisions of Resolution No. 160/06, the ENRESP authorized a 19.7% adjustment in Distribuidora Salta’s average sale rate for all customer categories, applicable as from the June 2011 electricity rate schedule.

Additionally, Distribuidora Salta and the ENRESP are currently conducting the studies necessary for the Five-yearly Review of the Electricity Rate Schedule, which is estimated to be concluded in the first months of 2012 by a public hearing.

ESED S.A.

During the fiscal year 2005, the ENRESP approved Resolutions Nos. 126/05 and 280/05 which established a new electricity rate schedule, the quality regulations of the technical service and the system of government grants applicable to ESED’s users.

The studies for the five-yearly review of the electricity rate schedule for the year 2010 were submitted to the ENRESP in September 2010. Additional information was subsequently submitted at the ENRESP’s request. As of December 31, 2011, the review process is still in progress. In addition, the possibility of a government grant on the electricity rates as recognition of greater costs is currently being analyzed.

b. Distribuidora La Rioja –EDELAR S.A.

Due to the fact that the increases recorded in the Distribution Company’s costs exceeded the conditions stipulated in the Memorandum of Understanding for the Readjustment of the Agreement for the Provision of the Public Service of Electricity Distribution signed with the Government of the Province of La Rioja and ratified by the Governor through Decree FEP No. 2318/08, in February 2011, the Distribution Company submitted Note GPRR No. 0110/11 with the supporting documentation of the greater costs borne by EDELAR S.A.

By Note No. 236 of the EUCOP dated March 28, 2011, the Board of the Control Authority rejected the distribution company’s request. Therefore, on April 11, 2011 by Note GPRR No. 0258/2011 addressed to the EUCOP, EDELAR S.A. requested that such decision be reconsidered.

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c. Distribuidora San Luis –EDESAL S.A.

In 2009 and 2010, the Distribution Company submitted to the Provincial Electric Power Regulatory Commission (CRPEE) of San Luis, technical studies with the updated recalculation of the Distribution Added Value and load curves to support the request of the Overall Electricity Rate Review.

On June 15, 2011, the Ministry of Public Works and Infrastructure issued Resolution No. 597-MOPeI-2011 whereby it approved an Electricity Rate Schedule, which resulted in an average increase of approximately 9% applicable as from June 1, 2011, and an investment plan to be carried out.

d. Distribuidora de Energía Norte -EDEN S.A.

During the year ended December 31, 2010, EDEN continued to submit information on the updated values of the Operative Costs Sample as well as on the valuation of the assets available for the rendering of service, as stipulated in caption 4.4 of Section 4 of the Protocol of Understanding. The last presentation was made in June 2010, which has been ratified by the Provincial Energy Administration.

15. FINES OF THE ELECTRIC POWER CONTROL AUTHORITY OF THE PROVINCE OF BUENOS AIRES (“OCEBA”)

On November 1, 2007, the Ministry of Infrastructure, Housing and Public Services of the Province of Buenos Aires published Resolution No. 508, whereby electricity distribution companies holding provincial and municipal concessions are authorized to “set aside” from the book account created by section 2 of Decree No. 2088/02, the balances existing therein as of January 15, 2007, which is the date on which Decrees Nos. 3192/06 and 3273/06 (which approves the Addendum duly signed by and between the Ministry of Infrastructure, Housing and Public Services and EDEN S.A.), came into effect. However, certain specific definitions of the Differential Quality System contemplated in the Protocol of Understanding, concerning the way in which such withdrawal will operate, are pending.

On February 5, 2009, the Ministry of Infrastructure, Housing and Public Services of the Province of Buenos Aires published Resolution No. 61, pursuant to which the withdrawal of the balances from the account created by section 2 of Decree No. 2088/02 is extended to any pecuniary penalty imposed by the OCEBA to provincial or municipal electricity distribution companies, whenever the fact or cause that gave rise to the penalty occurred prior to and including March 31, 2007.

Resolution No. 61 also states that the Differential Quality System contemplated in section 5 of the Protocols of Understanding is to be implemented as from March 31, 2007 on a temporary basis, until the overall electricity rate review contemplated in section 6 of Decree No. 1578/08 is approved by the Provincial Government. Additionally, the aforementioned resolution establishes that the Provincial Energy Administration shall inform the OCEBA the technical coefficients necessary for the calculation of net penalty amounts. In this regard, distribution companies shall submit to the OCEBA investment plans aimed at improving the quality of the technical service, for amounts equal to the amounts resulting from the application of such coefficients to the balances accumulated as from March 31, 2007 in the account created by section 2 of Decree 2088/02.

Consequently, EDEN S.A. ser aside the fines accumulated in the account created by section 2 of Decree 2088/02 until March 31, 2007 and began, as from such date, to record an accrual for OCEBA’s penalties, applying the coefficients informed by the Provincial Energy Administration.

The balance of the accrual, which amounts to 10,333 as of December 31, 2011, has been disclosed in the Other liabilities account (Note 4.g).

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16. LEGAL ACTIONS

a) Legal action brought by the National Ombudsman

The National Ombudsman made a presentation against both the resolutions by which the new electricity rate schedule had gone into effect as from October 1, 2008 and the application of the Program for the Rational Use of Electric Power (PUREE).

Within the framework of the case, on January 27, 2009, the ENRE notified the Company of a prohibitory injunction issued by the Court hearing the case as a consequence of the Ombudsman’s presentation, according to which the Company is prohibited from cutting power due to the nonpayment of bills issued with the rate hike resulting from the application of the resolutions questioned by the Ombudsman, until a final ruling is issued on the case. The precautionary measure has been appealed by the Company and the Argentine Federal Government. On September 1, 2009, National Appellate Court in Contentious and Administrative Federal Matters No. V affirmed the first instance decision, thus maintaining in effect the prohibitory injunction granted by the court of original jurisdiction.

Against this decision, the Company filed an extraordinary federal appeal (“Recurso Extraordinario Federal”), which was also rejected by the appellate court hearing the case.

On July 29, 2009 the Company answered the summons as a third-party defendant.

As a final recourse, on December 7, 2009, the Company filed an appeal (“Queja por Recurso denegado”) to the Federal Supreme Court requesting that the extraordinary appeal rejected by the Appellate Court be sustained. The appeal (“Queja por Recurso denegado”) is currently being analyzed by the Supreme Court.

Therefore, no accrual has been recorded for these claims as the Company’s management, based on both that which has been previously mentioned and the opinion of its legal advisors, believes that there exist solid arguments to support its position.

b) Legal action brought by Consumidores libres Coop. Ltda. de provisión de servicios de acción comunitaria

On October 26, 2009, notice of the complaint “CONSUMIDORES LIBRES COOP. LTADA. DE PROVISIÓN DE SERVICIOS DE ACCIÓN COMUNITARIA VS Federal Government – National Energy Secretariat – ENRE, proceedings for the determination of a claim” was served upon the Company. The complaint was filed by two consumer associations: CONSUMIDORES LIBRES COOP. LTADA. DE PROVISIÓN DE SERVICIOS DE ACCIÓN COMUNITARIA and the UNIÓN DE USUARIOS Y CONSUMIDORES against the Federal Government, the ENRE, EDESUR, EDELAP and EDENOR, and is pending in the National Court of Original Jurisdiction in Contentious and Administrative Federal Matters Number 8. In accordance with the terms of the complaint, the associations for the defense of consumer rights, ADDUC and UNIÓN DE USUARIOS Y CONSUMIDORES EN DEFENSA DE SUS DERECHOS, have joined the complaint.

The remedies sought in the complaint are as follow:

a) That all the last resolutions concerning electricity rates issued by the ENRE and the National Energy Secretariat be declared null and unconstitutional, and, in consequence whereof, that the amounts billed by virtue of these resolutions be refunded.

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b) That all the defendants be under the obligation to carry out the Review of the Tariff Structure (RTI).

c) That the resolutions issued by the Energy Secretariat that extend the transition period of the Adjustment Agreement be declared null and unconstitutional.

d) That the defendants be ordered to carry out the sale process, through an international public bidding, of the class “A” shares, due to the fact that the Management Period of the Concession Agreement is considered over.

e) That the resolutions as well as any act performed by a governmental authority that modifies contractual renegotiations be declared null and unconstitutional.

f) That the resolutions that extend the management periods contemplated in the Concession Agreement be declared null and unconstitutional.

g) Subsidiarily, should the main claim be rejected, that the defendants be ordered to bill all customers on a bimonthly basis.

Additionally, it is requested that a precautionary measure be issued with the aim of suspending the rate hikes established in the resolutions being questioned by the plaintiff. Subsidiarily, it is requested that the application of the referred to resolutions be partially suspended. Finally, it is requested that the application authority be ordered not to issue new increases other than those resulting from the Review of the Tariff Structure process. The Court has neither granted nor rejected that which has been requested. In addition, and with regard to the main cause, it has been answered by the Company within the term and under the formalities prescribed by law.

With reference to that which has been previously mentioned, the objected to rate increases, with the exception of the one granted by Resolution No. 324/08 of the ENRE, do not have a direct impact on the distribution added value, inasmuch as they are the result of the transfer to the tariff of the higher generation costs ordered by the Grantor of the Concession. These generation increases are effective for the Company within the pass-through mechanism in the tariff.

On February 11, 2010 the Court hearing the case decided to turn into ordinary the proceeding that had been brought as an extraordinary summary proceeding, thus extending the time periods involved in the process. With regard to the provisional relief sought, on that date, the court ordered the carrying out of actions to add and clarify existing evidence, prior to taking any decision thereon.

Within the contemplated legal time period, the Company answered the complaint rejecting all its terms and requesting that a summons be served upon CAMMESA as a third-party defendant. The remaining co-defendants have already answered the notice of the complaint served upon them. As of the date of preparation of these consolidated financial statements, no decision has been made by the Court hearing the case concerning the Company’s request that CAMMESA be summoned as a third-party defendant. The Federal Government has answered the complaint filed against it within the term granted for such purpose.

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c) Legal action brought by Consumidores financieros Asociación civil para su defensa

On March 31, 2010, notice of the complaint “CONSUMIDORES FINANCIEROS ASOCIACIÓN CIVIL PARA SU DEFENSA vs. EDENOR S.A – EDESUR S.A for BREACH OF AGREEMENT” – National Court of Original Jurisdiction in Contentious and Administrative Federal Matters No. 2 – Clerk’s Office No. 15, was served upon the Company.

The remedies sought in the complaint are as follow:

–	Reimbursement of the VAT percentage paid on the illegally “widened” taxable basis due to the incorporation of a concept (National Fund of Electricity - FNEE) on which no VAT had been paid by the defendants when CAMMESA (the company in charge of the regulation and operation of the wholesale electricity market) invoiced them the electricity purchased for distribution purposes.

–	Reimbursement of part of the administrative surcharge on “second due date”, in those cases in which payment was made within the time period authorized for such second deadline (14 days) but without distinguishing the effective day of payment.

–	Application of the “borrowing rate” in case of customer delay in complying with payment obligation, in accordance with the provisions of Law No. 26,361.

On April 22, 2010, the Company answered the complaint and filed a motion to dismiss for lack of standing (“excepción de falta de legitimación”), requesting, at such opportunity, that a summons be served upon the Federal Government, the AFIP and the ENRE as third-party defendants. These pleadings were made available to the plaintiff. Having this procedural step been complied with, as from June 16, 2010 the proceedings are yet to be resolved.

d) Legal action brought by the Unión de Usuarios y consumidores

On December 9, 2009, notice of the complaint “UNION DE USUARIOS Y CONSUMIDORES VS FEDERAL GOVERNMENT DECREE 1957/06 (RESOLUTION 51/07 OF THE ENRE - EDENOR) AND OTHERS, PROCEEDINGS FOR THE DETERMINATION OF A CLAIM” was served upon the Company. The complaint, filed by the association for the defense of consumer rights Unión de Usuarios y Consumidores against the Federal Government and Edenor, is pending in National Court of Original Jurisdiction in Contentious and Administrative Federal Matters No. 12, Clerks’ Office No. 23.

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The remedies sought in the complaint are as follow:

a) that clause 4.6 and related clauses of Appendix I of the Adjustment Agreement be revoked, inasmuch as they establish that the rate increase will be retroactive;

b) that Resolution No. 51/07 of the ENRE be nullified inasmuch as it authorizes the retroactive increase of rates in favor of the Company;

c) that Edenor be ordered to reimburse customers all the amounts paid as retroactive rate increase for the period of November 1, 2005 through January 31, 2007;

d) that the reimbursement be implemented through a credit in favor of customers.

The Company answered the complaint on December 9, 2009.

The judgment sustaining the complaint was entered on November 11, 2010.

An appeal with a stay of execution was filed on November 25, 2010. On December 2, 2010, the Court upheld the Company and the Federal Government’s petition granting the appeal with a stay of execution, which means that the court ruling will not be carried out until the appeal is resolved by the higher court.

On December 13, 2010, the Company formally submitted to the Court of Original Jurisdiction the written bases of the appeal concerning the merits of the case upon which judgment had been rendered. Appellate Court in Contentious and Administrative Federal Matters No. V will hear the case.

By resolution issued on June 1, 2011, the Court of Appeals in Contentious and Administrative Federal Matters No. V, supporting the Company‘s arguments, ordered that the lower court decision be nullified as to the merits of the case. Against such decision, the Unión de Usuarios y Consumidores filed an extraordinary federal appeal (“Recurso Extraordinario Federal”) which was granted on November 3, 2011. The proceedings will be taken to the Supreme Court.

e) Legal action brought by the Company (“EDENOR S.A VS RESOLUTION NO. 32/11 OF THE ENRE”)

By this action, the Company challenges such resolution, which – within the framework of the power cuts occurred between December 20 and December 30, 2010 – established the following:

–	That the Company be fined in the amount of 750 due to lack of compliance with the obligations arising from Section 25) sub-sections a, f and g of the Concession Agreement and Section 27 of Law No. 24,065.
–	That the Company be fined in the amount of 375 due to lack of compliance with the obligations arising from Section 25 of the Concession Agreement and Resolution No. 905/1999 of the ENRE.
–	That Company customers be paid as compensation for the power cuts suffered the following amounts: 180 to each small-demand residential customer who suffered power cuts that lasted more than 12 continuous hours, 350 to those who suffered power cuts that lasted more than 24 continuous hours, and 450 to those who suffered power cuts that lasted more than 48 continuous hours. The resolution stated that such compensation did not include damages to customers’ facilities and/or appliances, which were to be dealt with in accordance with a specific procedure.

The direct appeal is pending in Appellate Court in Contentious and Administrative Federal Matters No. I.

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Prior to the merits phase, the Company filed –with the same Court No. I – a petition for the granting of a precautionary measure, aimed at suspending the application of Resolution No. 32/11 until a decision on the direct appeal is issued.

On March 23, 2011, the Court hearing the case, resolved to suspend the effects of Sections 3 and 9 of Resolution No. 32/11 of the ENRE (filing of documentation showing compliance with payment of the amounts imposed), until a decision on the precautionary measure is rendered.

Against this decision, the ENRE filed a post-judgment motion for reversal (“recurso de reposición”) which was rejected in all its terms.

On April 28, 2011, the Court rejected the precautionary measure petition filed by this Company. Against this decision, the Company filed an extraordinary federal appeal (“Recurso Extraordinario Federal”), which –after having been made available to the ENRE- was dismissed.

On July 8, 2011, the Company requested that the substance of the case be served on the ENRE, which is taking place as of the date of issuance of these consolidated financial statements.

On October 28, 2011, the Company filed an appeal (“Queja por Recurso Denegado”) to the Federal Supreme Court requesting that the rejected extraordinary federal appeal be sustained.

As of the end of the year ended December 31, 2011, liabilities accrued in relation to the aforementioned compensations amount to 25,303 (Note 4.g).

f) Legal action brought by ASOCIACIÓN DE DEFENSA DE DERECHOS DE USUARIOS Y CONSUMIDORES – ADDUC

The purpose of this ordinary action brought by ADDUC is that the Company be ordered to reduce or mitigate the default or late payment interest rates charged to customers who pay their bills after the first due date, inasmuch as they violate section 31 of Law No. 24,240, ordering both the non application of pacts or accords that stipulate the interest rates that are being applied to the users of electricity had been stipulated – their unconstitutional nature – as well as the reimbursement of interest amounts illegally collected from users of the service from August 15, 2008 through the date on which the defendant complies with the order to reduce interest. It is also requested that the value added tax (VAT) and any other taxes charged on the portion of the surcharge illegally collected be reimbursed.

On November 11, 2011, the Company answered the complaint and filed a motion to dismiss for both lack of standing (“excepción de falta de legitimación activa”) and the fact that the claims at issue were being litigated in another lawsuit (“litispendencia”), requesting, at such opportunity, that a summons be served upon the ENRE as a third-party defendant. These pleadings were made available to the plaintiff.

The relevant information on the subsidiary companies’ legal actions is summarized below.

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TAX CONTINGENCY - DISTRIBUIDORA SAN LUIS

By Resolution No. 127 dated November 30, 2000, the Federal Administration of Public Revenues (AFIP) challenged the Value Added Tax (VAT) returns for the January 1994 - October 1999 fiscal periods and determined through a sua sponte assessment the tax for such periods, claiming the payment of the differences which, as of December 31, 2011 and 2010 amounted to approximately 26,271 and 24,733, respectively. Such amounts include interest accrued through the closing date of the financial statements as well as fines.

The origin of the claim is that the AFIP believes that the “Municipal Tax” that Distribuidora San Luis collected from its customers on behalf of the Municipalities is part of the VAT taxable base as it is included in the price of the electric power delivered, whereas in the opinion of Distribuidora San Luis it is exactly the opposite.

On December 27, 2000, Distribuidora San Luis filed an appeal against the sua sponte assessment made by the AFIP with the Federal Tax Court, whose decision, rendered on November 27, 2002, agreed with the AFIP’s criterion. On February 12, 2003, Distribuidora San Luis appealed the decision before the Federal Court of Appeals, which, on September 19, 2006 pronounced judgment in favor of the Distribution Company, although it imposed court costs on both parties. Finally, Distribuidora San Luis filed an extraordinary appeal requesting that the court costs be entirely imposed on the AFIP. The tax authorities, in turn, filed an ordinary and an extraordinary appeal against judgment rendered with the Supreme Court. On December 29, 2011, the Supreme Court rendered judgment supporting the criterion adopted by Distribuidora San Luis, thus resolving that the appeal filed by the tax authorities against the Appellate Court’s decision be dismissed and that the AFIP be held liable for court costs.

Furthermore, the AFIP carried out similar reviews for subsequent periods. In this regard, and with the same arguments, the tax authorities claimed, in a first stage, tax differences for approximately 4,980 for the periods between November 1999 and January 2001, and subsequently 7,457 for the periods between February 2001 and March 2003. Also, in May 2010, it made a new adjustment in the amount of 6,038 for the periods between May 2003 and December 2004. All the reported amounts include interest accrued through the date of these consolidated financial statements as well as fines. In each case, the Distribution Company has rejected the assessments made by the AFIP and filed an appeal with the Federal Tax Court, which is awaiting resolution by the administrative authority.

In December 2011, Distribuidora San Luis filed a brief with the Federal Tax Court in connection with those proceedings, informing about the Supreme Court’s decision that supports the criterion adopted by the Distribution Company, as described in the preceding paragraph.

Additionally, on December 23, 2011, Distribuidora San Luis was notified of a sua sponte assessment resolution concerning Income Tax for the 2002 - 2006 fiscal periods, pursuant to which the AFIP claims payment of differences arising from (i) the application of the provisions of section 73 of the Income Tax Law and section 103 of its Regulatory Decree to transactions carried out by Distribuidora San Luis according to which loans were granted to related companies (presumed interest), and (ii) the objection to the expense related to the recording in the accounting of “service quality fines”. The tax differences involved amount to approximately 12,275, including interest and fines accrued through the date of these consolidated financial statements. Distribuidora San Luis will file an appeal with the Federal Tax Court against such sua sponte assessment resolution.

In view of the foregoing, the Company believes that the recording of an accrual for this concept is not necessary.

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TAX CONTINGENCY - DISTRIBUIDORA SALTA

In April 2001, the Federal Administration of Public Revenues (AFIP) challenged the Income tax returns filed by Distribuidora Salta for fiscal years 1997 and 1998 on the grounds that the works carried out with the funds deriving from the Special Fund for the Electric Power Development of Argentine Provinces (FEDEI) were subject to income tax, thus rejecting the income tax deduction related to allowances for doubtful tax accounts. Furthermore, such adjustments resulted in the objection of the Minimum presumed income tax return for fiscal period 1998.

On April 30, 2001, Distribuidora Salta filed an appeal against the assessments referred to above with the Federal Tax Court, which, as of the date of issuance of these consolidated financial statements, has not yet pronounced any judgment.

On November 7, 2005, the Federal Administration of Public Revenues (AFIP) informed Distribuidora Salta that, according to its interpretation, the company reorganization notified by Distribuidora Salta in 2001 (merger of CESA into Distribuidora Salta) did not comply with the requirements set forth by the Income Tax Law and its Regulatory Decree. Consequently, neither CESA’s accumulated and effective tax losses carryforward nor its tax exemptions pending use could be transferred to Distribuidora Salta, the surviving company.

Distribuidora Salta believes that the aforementioned reorganization meets all the requirements set forth in the current legislation to be considered within the tax-free system and, therefore, it is admissible that CESA’s tax rights and obligations be transferred to and computed in the surviving company.

In November 2005, Distribuidora Salta filed an appeal against the above-mentioned AFIP’s resolution. On November 4, 2008, the AFIP notified its decision to reject the appeal lodged.

On February 10, 2009, Distribuidora Salta filed proceedings against such administrative decision with the Federal Justice on the grounds that it was an administrative act that could only be objected by means of a legal action.

Furthermore, on January 19, 2009, the AFIP notified Distribuidora Salta of the amendment made to the original brief so as to extend it and include the rejection of the reorganization, which EDESA answered on February 11, 2009. On August 19, 2009, the AFIP, through Resolution No. 151/09, notified the Distribution Company of a sua sponte assessment of the income tax for the referred to 2000 - 2002 fiscal periods.

On September 8, 2009, the Distribution Company filed with the Federal Tax Court an appeal against such resolution, rejecting the totality of the charges questioned, and a motion to dismiss based on the fact that the claims at issue were being litigated in another lawsuit, thus requesting that the Tax Court abstain from issuing an opinion until the Federal Court of Salta rendered judgment. This petition may be either accepted or not by the Tax Court.

Should such situation be confirmed, the final conclusion as to the admissibility and the final amount of the adjustment, if applicable, will be determined by the Federal Justice. Therefore, no accrual has been recorded in this regard, based on the favorable substantial grounds that Distribuidora Salta believes to have.

In view of the foregoing, Distribuidora Salta believes that the recording of an accrual for this concept is not necessary. Consequently, the financial statements must be read in the light of these circumstances.

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17. EMPLOYEE STOCK OWNERSHIP PROGRAM

At the time of the privatization of SEGBA (the Company’s predecessor), the Argentine Government assigned the Company’s Class C shares, representing 10% of the Company’s outstanding capital stock, for the creation of an Employee Stock Ownership Program (ESOP) in compliance with the provisions of Law No. 23,696 and its regulatory decrees. Through this program, certain eligible employees (including former SEGBA employees who had been transferred to the Company) were entitled to receive a specified number of Class C shares, to be calculated on the basis of a formula that took into consideration a number of factors including employee salary, position and seniority. In order to implement the ESOP, a general transfer agreement, a voting trust agreement and a trust agreement were signed.

Pursuant to the general transfer agreement, participating employees were allowed to defer payment of the Class C shares over time. As security for the payment of the deferred purchase price, the Class C shares were pledged in favor of the Argentine government. This pledge was released on April 27, 2007 upon full payment to the Argentine Government of the deferred purchase price of all Class C shares. Additionally, in accordance with the terms of the original trust agreement, the Class C shares were held in trust by Banco de la Nación Argentina, acting as trustee, for the benefit of the ESOP participating employees and the Argentine Government. Furthermore, in accordance with the voting trust agreement, all political rights of participating employees (including the right to vote at the Company’s ordinary and extraordinary shareholders’ meetings) were to be jointly exercised until full payment of the deferred purchase price and release of the pledge in favor of the Argentine Government. On April 27, 2007, ESOP participating employees fully paid the deferred purchase price to the Argentine Government, accordingly, the pledge was released and the voting trust agreement was terminated.

In accordance with the regulations applicable to the ESOP, participating employees who retired before full payment of the deferred purchase price to the Argentine Government was made, were required to transfer their shares to the Guarantee and Repurchase Fund (Fondo de Garantía y Recompra) at a price to be calculated in accordance with a formula established in the general transfer agreement. As of the date of payment of the deferred purchase price, the Guarantee and Repurchase Fund had not fully paid the amounts due to former ESOP participating employees for the transfer of their Class C shares.

A number of former employees of both SEGBA and the Company have brought legal actions against the Guarantee and Repurchase Fund, the Argentine Government and, in few cases, against the Company, in cases in relation to the administration of the Employee Stock Ownership Program. The plaintiffs who are former employees of SEGBA were not deemed eligible by the corresponding authorities to participate in the Employee Stock Ownership Program at the time of its creation. This decision is being disputed by the plaintiffs who are therefore seeking compensation. The plaintiffs who are former employees of the Company are claiming payment for the unpaid amounts owed to them by the Guarantee and Repurchase Fund either due to non-payment of the transfer of their shares upon retirement in favor of the Guarantee and Repurchase Fund or incorrect calculation of amounts paid to them by the Guarantee and Repurchase Fund.

In several of these claims, the plaintiffs have obtained attachment orders or prohibitory injunctions against the Guarantee and Repurchase Fund on Class C shares and the amounts deposited in such Fund. Due to the fact that the resolution of these legal proceedings is still pending, the Federal Government has instructed Banco de la Nación Argentina to create a Contingency Fund so that a portion of the proceeds of the offering of the Employee Stock Ownership Program Class C shares be kept during the course of the legal actions.

No accrual has been recorded in the consolidated financial statements in connection with the legal actions brought against the Company as the Company’s management believes that EDENOR is not responsible for the above-mentioned claims.

In accordance with the agreements, laws and decrees that govern the Employee Stock Ownership Program, the Class C shares may only be held by personnel of the Company, therefore before the public offering of the Class C shares that had been separated from the Program, such shares were converted into Class B shares and sold. In conformity with the by-laws, the political rights previously attributable to Class C shares are at present jointly exercised with those attributable to Class B shares and the holders of the remaining Class C shares will vote jointly as a single class with the holders of Class B shares when electing directors and supervisory committee members. As of December 31, 2011 and 2010, 1,952,604 Class C shares, representing 0.22% of the Company’s capital stock are outstanding (Note 7).

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The relevant information on the subsidiary companies’ Employee Stock Ownership Program is summarized below.

DISTRIBUIDORA SALTA

The Class “C” shares issued by Distribuidora Salta, representing 10% of its capital stock, will be assigned by the Provincial Government to the employees transferred to this distribution company in accordance with the terms and conditions of an employee stock ownership program (ESOP). As of the date of these consolidated financial statements, the ESOP has been regulated by the Provincial Government as per Decree No. 155/02 and Resolution No. 53/02 of the Economy Ministry and its subsequent Decree No. 239/02.

During fiscal year 2005, the province’s Economy and Public Works Ministry issued Resolutions Nos. 349 D and 406 D dated November 8, 2005 and December 9, 2005, respectively, which provided for the acquisition of the rights and shares of the former Provincial Energy Administration employees. Over 60% of all ESOP beneficiaries accepted the Provincial Government’s offer.

On December 25, 2007, the Provincial Government issued Decree No. 3624/07 which approved the definitive assignment made by the beneficiaries of Distribuidora Salta’s employee stock ownership program, ordered the transfer of the Class “C” shares in favor of the Provincial Government, and requested the recording of such transfer in Distribuidora Salta Shareholder Register.

It was requested that a profit-sharing bond be implemented by Distribuidora Salta in accordance with the provisions of the referred to Decree, decision which Distribuidora Salta appealed on January 3, 2008. By Decree No. 1223/09 dated March 12, 2009, the appeal filed by Distribuidora Salta was rejected. Therefore, the Distribution Company filed a motion for clarification, after which the only possibility available would be to resort to the judicial system, which the Distribution Company did on May 6, 2009 before the Court in Contentious and Administrative Matters of the Province of Salta. Such action is in judicial process.

On December 29, 2011, Distribuidora Salta was notified of Decree No. 754/11, pursuant to which sections 1º, 2º and 3º of Decree No. 3624/07, Resolutions 349 D/05 and 406 D/05 of the former Provincial Economy and Public Works Ministry, and Decree No. 935/03 are declared null and void. Decree No. 754/11 also invites the beneficiaries of Distribuidora Salta’s Employee Stock Ownership Program, who had been declared eligible by Resolution No. 239/02, to enter into the corresponding General Transfer Agreements and Voting Trust Agreements.

Furthermore, in accordance with section 8° of Decree No. 754/11, Distribuidora Salta is required to deposit in favor of the Province the Class C share dividends not distributed since the privatization and 50% of the profit-sharing bonds, in the terms of the referred to decree.

In January 2012, a motion for clarification was filed against section 8° of Decree No. 754/11, whose resolution is pending.

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18. LIABILITY FOR WORKS TRANSFERRED

Balances comprise the debt recognized by Distribuidora Salta, Distribuidora San Luis and Distribuidora La Rioja with certain customers for the transfer in their favor of the property title of infrastructure works (electrical installations) directly carried out by those customers or by the Distribution Companies on their behalf.

As of December 31, 2011 and 2010, the balances of the liability for works transferred amount to 26,460 and 19,869, respectively, 20,353 and 13,526 of which have been recorded in current trade accounts payable and 6,108 and 6,344 in non-current trade accounts payable, respectively.

19. RESTRICTIONS ON THE DISTRIBUTION OF PROFITS

In accordance with the provisions of Law No. 19,550, the General Annual Meeting held on April 13, 2011 resolved that the loss for the year ended December 31, 2010 be absorbed by the Unappropriated Retained Earnings account.

Moreover, in accordance with the provisions of Law No. 25,063, passed in December 1998, dividends to be distributed, whether in cash or in kind, in excess of accumulated taxable profits as of the fiscal year-end immediately preceding the date of payment or distribution, shall be subject to a final 35% income tax withholding, except for those dividends distributed to shareholders who are residents of countries benefiting from conventions for the avoidance of double taxation who will be subject to a lower tax rate. For income tax purposes, accumulated taxable income shall be the unappropriated retained earnings as of the end of the year immediately preceding the date on which the above-mentioned law went into effect, less dividends paid plus the taxable income determined as from such year and dividends or income from related companies in Argentina.

Certain restrictions on the distribution of dividends by the Company and the need for approval by the ENRE for any distribution have been disclosed in Note 8.c).

Restrictions on the distribution of profits of the subsidiary companies are summarized below.

As established by the Argentine Business Organizations Law, the By-laws and Resolution No. 195 of the National Securities Commission, 5% of the profits for the year plus (less) prior year adjustments and absorption of accumulated losses, if any, must be allocated to the Legal Reserve, until it equals 20% of the restated capital stock.

Due to the commitments undertaken in relation to the issuance of the corporate notes, neither EMDERSA nor any of its subsidiaries may directly or indirectly distribute or pay dividends unless, after giving pro-forma effect to the transaction, EMDERSA’s consolidated financial debt-to-EBITDA ratio is lower than 2.25 and no event of default has occurred.

20. PIQUIRENDA GENERATION PLANT – EMDERSA Generación

In April 2008, EMDERSA Generación accepted the offer submitted by Industrias Juan F. Secco S.A. for the construction, assembling and start-up of an electricity generation plant under the “turnkey” procurement basis.

The plant consists of a 30 MW thermal generation plant comprised of ten GE Jenbacher JGS 620 natural gas-fired motor-generators. The fuel is obtained through a direct connection to Transportadora de Gas del Norte’s gas pipeline. The electric power generated is injected to the network of Empresa Distribuidora de Electricidad de Salta – EDESA – Sociedad Anónima and sent to the National Interconnected System, through the Tartagal Transformer Station.

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The generation plant has been classified by the Energy Secretariat as “Critical Infrastructure Work”. Moreover, the National Regulatory Authority for the Distribution of Electricity granted “Access to the existing capacity in power transport lines”. The Energy Secretariat has already accepted the application to qualify as Agent of the Wholesale Electricity Market (MEM).

To complete the project, EMDERSA Generación has accepted the following offers:

	a).	Offer from Pan American Energy LLC - Argentine Branch to provide natural gas from the “Acambuco” field. This contract was rescinded on April 11, 2011 due to the fact that the variable cost associated to the agreed-upon natural gas price was not approved by the Energy Secretariat.

	b).	Offer from Industrias Juan F. Secco S.A. to carry out operation and maintenance activities of the plant for a term of 10 years.

As from the acceptance of the offer for the construction of the plant, Industrias Juan F. Secco S.A. began to work on the detailed engineering in order to commence the construction works on the site.

At the same time, EMDERSA Generación began to work on the cleaning, leveling and compressing of the land and to acquire the electric equipment not included in Industrias Juan F. Secco S.A. offer.

The aforementioned project was financed by an additional capital contribution of EMDERSA, for an amount of 2,988, and financial loans for 28,000 and USD 17,365 thousand.

The construction works ended in March 2010. The plant was conceived to operate within the framework of the “Energy Plus” program, however, due to the development of the regulatory framework, the electricity produced by the generation plant could not be sold in this market segment, for which reason the commercial strategy has been modified, as described further in below.

In December 2010, the commercial activities began with the signing of two agreements with Distribuidora Salta, for the availability of a total of 28 MW of power. These agreements made it possible not only to commence operations but also to meet the variable generation costs and the main fixed expenses through April 30, 2011, date on which they fell due.

The plant’s availability of power allowed Distribuidora Salta to overcome the serious supply problem faced in the northern area of the Province of Salta during the summer season.

On April 1, 2011, within the framework of the “Agreement for the management and operation of projects, increase of thermal generation availability and adequacy of the 2008-2011 generation remuneration”, the authorization of Piquirenda Generation Plant to carry out commercial activities was included as part of the agreement entered into by and between the National Energy Secretariat, party of the first part, and Central Piedra Buena S.A., Central Térmica Loma de la Lata S.A., Central Térmica Güemes S.A., Hidroeléctrica Diamante S.A and Hidroeléctrica Los Nihuiles S.A., parties of the second part.

This agreement stipulates that in a first stage the Piquirenda Generation Plant will be authorized to carry out commercial activities while in a second stage the plant’s capacity will be expanded to 15 MW. The remuneration of and compliance with both stages will be regarded separately. In exchange, the Energy Secretariat will instruct CAMMESA to sign a supply agreement with EMDERSA Generación within the framework of Resolution No. 220/2007 of the Energy Secretariat.

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Within the framework of this agreement, the Piquirenda Generation Plant was finally authorized to carry out commercial activities on May 3, 2011. On July 15, 2011, EMDERSA Generación entered into a Supply Contract to the MEM within the framework of Resolution No. 220/2007 of the Energy Secretariat. As from such date and through the end of the current year, the electricity produced has been sold in accordance with the provisions of said agreement.

The natural gas used as fuel derives from the assignment of part of an agreement entered into by a third party with Panamerican Energy and from agreements with Pluspetrol.

Additionally, since August 1, 2011 the plant has been using natural gas Plus from its agreement with Petrolera Pampa S.A. approved by the Energy Secretariat.

Furthermore, the option to assign natural gas volumes to CAMMESA within the framework of Notes Nos. 6,866/09 and 7585/10 of the Energy Secretariat has been exercised.

As from the provisional handover of the construction works, Industrias Juan F. Secco S.A. began to carry out operation and maintenance activities in accordance with the aforementioned offer. However, on June 17, 2011, EMDERSA Generación accepted an offer from Industrias Juan F. Secco S.A. which established, among others, the following:

	–	The definitive handover (delivery) of the construction works and the definitive amounts of additional expenses and late completion penalties.

	–	The rescission, as from June 30, 2011, of the Operation and Maintenance Agreement in place and the conditions for the transfer to the company of personnel, spare-parts, supplies and tools.

	–	The conditions pursuant to which Industrias Juan F. Secco S.A. will provide assistance services for a term of six months.

Therefore, as from July 1, 2011, operation and maintenance activities will be entirely carried out by EMDERSA Generación.

21. COMMITMENTS WITH PERSONNEL IN SUBSIDIARIES

a) Collective bargaining agreements

In accordance with the provisions of Section 31, sub-sections h and b of Collective Bargaining Agreement No. 887/2007 entered into by Luz y Fuerza (Electric Light and Power Labor Union) and Distribuidora La Rioja, Section 31 of Collective Bargaining Agreement No. 873/2007 entered into by Luz y Fuerza and Distribuidora Salta, and Section 31 of Collective Bargaining Agreement No. 926/2007 entered into by Luz y Fuerza and Distribuidora San Luis, any employee reaching 20, 25, 30, 35 and 40 or 17, 22, 27, 32 and 37 years of employment, respectively, or choosing to retire, as well as the beneficiary of any employee who died before retirement, will be granted a salary and seniority-based bonus. The retirement benefit is increased by 2% for each year exceeding the first 5 years of employment.

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Furthermore, in accordance with the provisions of Sections 34 bis) and 32 of Collective Bargaining Agreements No. 855/2007 entered into by APUAYE (Association of Water and Electric Power Professional Personnel) and Distribuidora La Rioja, No. 848/2007 entered into by APUAYE and Distribuidora Salta, and No. 850/2007 entered into by APUAYE and Distribuidora San Luis, any male/female employee reaching 20, 25, 30, 35 and 40 or 17, 22, 27, 32 and 37 years of employment, respectively, or choosing to retire will be granted a salary and seniority-based bonus, which will be increased by 2% for each year exceeding the first 5 years of employment.

The main actuarial assumptions used contemplate an actual annual discount rate of 6%, an annual nominal discount rate of 27%, an annual inflation rate of 21%, and an annual salary increase rate per seniority of 1%.

Service cost is the present actuarial value estimated from the portion of compensation for the year. Interest cost is the interest on future payment obligations.

As of December 31, 2011, the related accrued liability for personnel benefits has been recorded at the present value of future cash flows and charged throughout the remaining number of years of service of the beneficiaries involved, until all the terms and conditions of each benefits plan are complied with (Note 4.e).

b)	Incentive plans

During March 2010, certain agreements were signed with key personnel of the Group, which establish the granting of restricted stock, performance share awards, as well as the possibility of subscribing non-qualified stock options in a parent company. As of December 31, 2011, these agreements have been rescinded, there being no further commitments taken on by the Group.

c) Bonuses and benefits – EDEN S.A.

They include charges for the following concepts:

1. Bonuses to be granted to employees with certain number of years of employment, as stipulated in collective bargaining agreements in effect. In accordance with the terms of Section 24 of Collective Bargaining Agreements Nos. 1041 and 1042/1994 entered into with Luz y Fuerza, any male/female employee reaching 20, 25, 30, 35 and 40 or 17, 22, 27, 32 and 37 years of employment, respectively, will be granted a salary and seniority-based bonus.

2. Benefits to be granted to employees upon retirement, as stipulated in collective bargaining agreements in effect.

Liabilities related to the above-mentioned accumulated seniority-based bonuses and personnel benefits plans have been determined contemplating all rights accrued by the beneficiaries of the plans through the end of the year ended December 31, 2011.

The main actuarial assumptions used contemplate an annual discount rate of 30%, an interest rate of 10%, an annual inflation rate of 22%, and an annual salary increase rate per seniority of 23%.

As of December 31, 2011, the accrued liability for personnel benefits has been recorded at the present value of future cash flows and charged throughout the remaining number of years of service of the beneficiaries involved, until all the terms and conditions of each benefits plan are complied with (Note 4.e).

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22. RESTRICTION ON THE TRANSFER OF THE SUBSIDIARY COMPANY’S SHARES

In accordance with the Bidding terms and conditions, EDEN is required to comply, among others, with the following obligations:

a) Not to transfer the class “A” shares without the prior approval of the Control Authority.

b) To make the necessary investments and carry out the necessary maintenance works in order to guarantee service quality levels.

c) To refrain from granting in favor of third parties any security interest on the assets used in the provision of the public service such as mortgages, pledges or any other lien, without prejudice to EDEN’s right to freely dispose of those assets which in the future may become inadequate or unnecessary for such purpose. This prohibition does not apply in the case of security interests granted by the Holder of the concession over an asset at the time of its acquisition to secure payment of the purchase price.

d) To pay the inspection and control tax to be fixed by the Control Authority.

23. ADMINISTRATIVE CLAIM – TAX ON MINIMUM PRESUMED INCOME

AESEBA S.A., through different administrative claims (acción de repetición2) filed with the Public Administration of Public Revenues (AFIP), claimed the excess amounts paid as Minimum Presumed Income Tax for fiscal periods 1998 through 2003.

In fiscal year 2007, the AFIP issued resolutions approving the reimbursement of the amounts claimed for fiscal years 1998 through 2001.

In 2010, the AFIP partially approved the amounts claimed for fiscal years 2002 through 2003, subsequently crediting in the subsidiary company’s account an amount of 1,999 as the amount claimed by the subsidiary company and approved by the AFIP for years 1998 through 2003 and late payment/default interest calculated from the dates of the fund reimbursement requests through the effective payment date.

The subsidiary company lodged two special appeals (recurso de reconsideración2) against the AFIP’s resolutions claming not only the approval of the amounts not approved by the tax authorities but also that interest be calculated as from the filing date of the administrative claim. As of to date, these appeals have not yet been resolved.

In August 2011, the AFIP corrected interest calculation and on August 17, 2011 made payment for the period 1998 through 2001. The appeal concerning fiscal years 2002 and 2003 is still pending resolution.

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24. CORPORATE REORGANIZATION

The Extraordinary Shareholders’ Meeting held on December 16, 2011, which was resumed on January 13, 2012 after a recess, approved the corporate reorganization consisting of the spin-off of EMDERSA’s following assets, together with any other rights, assets, liabilities or contingencies related to such assets,: (a) the ownership of the shares held by EMDERSA in Distribuidora San Luis, together with any other rights and obligations relating to or arising from such shareholding, as well as any right, obligation or contingency related to Distribuidora San Luis’s business activity, for the setting up of a new company; (b) the ownership of the shares held by EMDERSA in Distribuidora Salta, together with any other rights and obligations relating to or arising from such shareholding, as well as any right, obligation or contingency related to Distribuidora Salta’s business activity, for the setting up of a new company; and (c) the ownership of the shares held by EMDERSA in EMDERSA Generación, together with any other rights and obligations relating to or arising from such shareholding, as well as any right, obligation or contingency related to EMDERSA Generación’s business activity, for the setting up of a new company (Notes 27 and 28).

25. DISCONTINUED OPERATIONS

As described in Note 2, the Company’s Management decided to classify as other assets available for sale its shareholding in EMDERSA and EMDERSA Holding (Notes 27 and 28). Such assets comprise EMDERSA operating segment.

Therefore, the assets, liabilities, results of operations and cash flows for the year ended December 31, 2011 are disclosed below, as required by the applicable accounting principles:

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	Discontinued operations

Net sales		764,277
Electric power purchases		(264,511	)
Gross margin		499,766

Administrative expenses		(99,122	)
Selling expenses		(97,313	)
Transmission and distribution expenses		(168,653	)
Subtotal		134,678

Amortization of goodwill		572
Subtotal		135,250

Other (expense) income, net		(2,546	)

Financial income (expense) and Holding gains (losses)
Generated by assets		(12,330	)
Generated by liabilities		(61,150	)

Gain from investments in related companies		924

Profit before taxes		60,148

Income tax		(17,455	)
Minority interest		(6,851	)

Net profit for the year		35,842

	Discontinued operations

Current Assets		288,142
Non-Current Assets		1,007,851

Current Liabilities		349,891
Non-Current Liabilities		185,934

	Discontinued operations

Net cash provided by operations		91,695

Net cash used in investing activities		(136,687	)

Net cash provided by financing activities		44,992

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26. CONSOLIDATED CASH FLOW INFORMATION

Cash and cash equivalents

For the preparation of the Consolidated Statements of Cash Flows, the Company considers as cash equivalents all highly liquid investments with original maturities of three months or less.

	As of December 31, 2011		As of December 31, 2010		As of December 31, 2009
Cash and Banks		23,445		8,611		8,685
Time deposits		48,511		17,523		27,191
Money market funds		58,903		117,458		80,055
Government bonds, Corporate notes and Shares		2,132		533,251		112,441
Total cash and cash equivalents in the Consolidated Statements of Cash Flows		132,991		676,843		228,372

27. ACQUISITION OF COMPANIES

On March 4, 2011, the Company’s Board of Directors approved an offer from its indirect controlling company Pampa Energía S.A. (“Pampa”), pursuant to which the Company was offered the possibility of acquiring certain electricity distribution assets, which Pampa was entitled to acquire (either directly or through one or more subsidiaries), from Grupo AEI in accordance with an agreement entered into on January 19, 2011 by and between Pampa, party of the first part, and AEI Utilities, S.L., a limited company (sociedad limitada) organized under the laws of Spain ("AEIU"), AEI Servicios Argentina S.A., a corporation (sociedad anónima) organized under the laws of Argentina, and AEI, a company organized under the laws of the Cayman Islands, parties of the second part.

As a consequence of the acceptance by the Company of said offer, Edenor was appointed by Pampa as the acquiring party under the PESA-AEI Agreement. Therefore, on March 4, 2011, the Company acquired from AEIU (i) 182,224,095 common shares of EMDERSA S.A. (“Emdersa”), representing 77.19% of Emdersa’s capital stock and votes (“Emdersa Shares”), (ii) 2 common shares of Empresa Distribuidora de San Luis S.A. (“Edesal”) representing 0.01% of Edesal’s capital stock and votes, (iii) 600 common shares of Emdersa Generación Salta S.A. (“EGSSA”) representing 0.02% of EGGSA’s capital stock and votes, (iv) 1 common share of Empresa Distribuidora de Electricidad de la Rioja S.A. (“EDELAR”) representing 0.01% of EDELAR’s capital stock and votes, (v) 1 common share of Empresa de Sistemas Eléctricos Abiertos S.A. (“ESED”) representing 0.01% of ESED’s capital stock and votes, (all the shares mentioned in items (ii) through (v) hereinafter referred to as the “Residual Shares”) and (vi) 29,118,127 common shares of AESEBA S.A. representing 99.99% of AESEBA’s capital stock and votes (“AESEBA’s Shares”). The price paid by the Company for the aforementioned assets amounted to USD 90,000 thousand for Emdersa’s Shares and the Residual Shares acquired from AEIU and to USD 49.998 thousand for AESEBA’s Shares acquired from AEIU.

Emdersa holds: (i) 99.99% of EDESAL’s capital stock and votes, (ii) 90% of the capital stock and votes of Empresa Distribuidora de Electricidad de Salta S.A. ("EDESA"), (iii) 99.98% of EGSSA’s capital stock and votes, and (iv) 99.99% of EDELAR’s capital stock and votes. EDESA holds 99.99% of ESED’s capital stock and votes. Furthermore, AESEBA in turn holds 90% of the capital stock and votes of Empresa Distribuidora de Energía Norte, S.A. ("EDEN"), which provides electricity distribution services in the northern and central parts of the Province of Buenos Aires.

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Within the framework of the offer made by Pampa and accepted by the Company, the parties have additionally agreed that if within the 3 years following acquisition date of Emdersa’s Shares, the Residual Shares and AESEBA’s Shares, the Company sold either totally or partially any of such shares, Pampa would be entitled to receive from the Company a payment equivalent to 50% of the amount received for the sale thereof in excess of the amount paid to AEIU for any of such Shares (Emdersa’s Shares and/or Residual Shares and/or AESEBA’s Shares).

In order to evaluate the above described transaction, the Company engaged the services of the investment bank Citigroup Global Markets Inc. (“Citigroup”) to render a fairness opinion to the Company’s Board of Directors, concerning the fairness of the price that would have to be paid for Emdersa’s shares, the Residual shares and AESEBA’s shares. The opinion of the Company’s Audit Committee was also requested. Both Citigroup and the Company’s Audit Committee rendered their opinion, prior to the acquisition, stating that the informed values were adequate and within the market’s parameters.

In compliance with current regulations, the Company has formally consulted the National Securities Commission about the steps to be followed with regard to the public offering for the acquisition of Emdersa’s shares that the Company must make to Emdersa’s minority shareholders due to the change in that company’s control and in accordance with the provisions of Decree No. 677/01 and the National Securities Commission’s regulations. The aforementioned consultation was made due to the fact that the authorization and carrying out of the public acquisition offering that for the same reasons is to be carried out by AEIU at a price of USD 0.68 per Emdersa’s common share, is still pending. Therefore, the situation generated by the potential coexistence of two public offerings must, in the Company’s opinion, be clarified.

The Company has fully assumed its obligation to carry out the public acquisition offering it is required to make due to the new change in Emdersa’s control, which will be carried out at the same price per Emdersa’s common share that the Company paid to AEIU, i.e. USD 0.49 per Emdersa’s common share, in the manner and time period established by the control authority. The carrying out of said public acquisition offering was approved by the Company’s Board of Directors on March 4, 2011, and constitutes an irrevocable commitment with Emdersa’s shareholders.

Furthermore, the Company has initiated the proceedings aimed at obtaining authorization from the corresponding control authorities.

Finally, within the framework of the reported transaction for the acquisition of shares, the change in control of the acquired companies constitutes grounds for calling the loans taken out by their subsidiaries due. Therefore, on March 4, 2011, the Company granted to them a series of loans at an annual interest rate of 16% and final maturity on April 30, 2011 in order for them to be in a better position to negotiate the restructuring. The loans have been distributed in the following manner: i) EDEN 80,000; ii) EDELAR 31,178; iii) EDESA 131,320 and iv) EDESAL 37,503, which was repaid on October 25, 2011 (Note 28).

Additionally, in the June-December 2011 period, in successive market transactions, the Company acquired 2,951,000, 281,294 and 15,000 common shares of EMDERSA, representing 1.25%, 0.12% and 0.0064% of that company’s capital stock and votes, respectively.

The acquisitions have been accounted for in accordance with the purchase method of accounting on the basis of the fair value of the acquired assets and liabilities (Note 31 Exhibit C).

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28. COMPANY SALE AGREEMENTS AND COMPANIES AVAILABLE FOR SALE

On September 16 and October 11, 2011, the Company’s Board of Directors decided to approve the offer letters received for the carrying out of the following transactions:

	1.	From Rovella Carranza S.A., for the acquisition of the Company’s direct and indirect stake in Edesal (EDESAL OFFER).

	2.	From Andes Energía Argentina S.A., to buy a purchase option for the acquisition of the Company’s direct and indirect stake in Edelar (EDELAR OFFER).

	3.	From Pampa Energía S.A. for the acquisition of the Company’s direct and indirect stake in EGSSA (EGSSA OFFER).

In order for these transactions to be carried out, the Company will cause Emdersa to be partially spun off, which will result in the creation of three new investment companies, EDESAL Holding (holder of 99.99% of EDESAL’s capital stock and votes), EDESA Holding (holder of 90% of EDESA’s capital stock and votes) and EGGSA Holding (holder of 99.99% of EGGSA’s capital stock and votes). The spun-off company, EMDERSA, will keep a percentage interest in EDELAR’s capital stock and votes. This process was initiated by the Board of Directors of EMDERSA on August 23, 2011. The Extraordinary Shareholders’ Meeting of EMDERSA held on December 16, 2011, which was resumed on January 13, 2012 after a recess, approved the aforementioned corporate reorganization process.

EDESAL OFFER

The total and final price of the offer amounted to USD 26,698,000 to be paid in two payments, the first of them, for USD 4,005,000 on account of the price, was paid within the three days of the acceptance of the offer, and the remaining balance, i.e. an amount of USD 22,694,000 was collected by the Company on October 26, 2011.

Furthermore, as stipulated in the Offer Letter, on that date EDESAL repaid the financial loan granted by the Company to EDESAL for an amount of 37,503, plus interest accrued through the settlement date (Notes 27 and 28).

At that time the Company transferred 24.80% of EMDERSA’s shares and 0.01% of EDESAL’s shares to Rovella Carranza S.A. which set up a guarantee trust, comprised by the parties and Deutsche Bank S.A. to insure compliance with the parties’ obligations.

From the date of final payment and during the term of the trust, EDESAL’s management was in charge of a board of directors appointed by EMDERSA, in accordance with the buyer’s proposal, which was comprised of 5 directors, four (4) of whom were elected by the buyer and one (1) of whom was elected by the seller, and equal number of alternate directors, four (4) of whom were elected by the buyer and one (1) of whom was elected by the seller.

Upon completion of the spin-off process, EDESAL Holding will issue 78.44% of its shares in the name of the trustee, who, in turn, will transfer them to the buyer, together with 0.01% of EDESAL’s shares, and will simultaneously return the aforementioned EMDERSA’s shares to the Company.

In the event that at the end of the two-year term to commence from the date of acceptance of the offer, which took place on September 16, 2011, neither EMDERSA’s spin-off nor the creation of EDESAL Holding have been carried out, the trustee shall transfer to Rovella Carranza S.A., as an alternative way of the Company’s compliance with its obligation and for the price received by the Company, 24.80% of EMDERSA’s capital stock and votes, with the Company maintaining 53.64% of EMDERSA’s capital stock and votes.

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As security for the compliance with the obligations undertaken, the Company has provided a performance bond in favor of Banco Itaú Argentina S.A. and Standard Bank Argentina S.A. for the total amount of 60,000 as principal plus compensatory interest at an annual nominal rate of up to 16% to secure EDESAL’s payment obligations with respect to these banks. The performance bond will be enforceable if any of the following conditions precedent (whichever takes place first) occur:

	1.	That at September 16, 2013, EMDERSA’s spin-off has not been carried out; or
	2.	That during the term of the trust the Company fails to comply with certain obligations concerning EDESAL’s joint management.

In the event that none of the above-mentioned conditions occurs, the performance bond will not be enforceable.

As of December 31, 2011, this transaction has taken place causing the recognition of a loss in the Company’s results of operations of 12,750, which has been disclosed in the Loss from valuation of other assets available for sale at net realizable value account of the Statement of Operations.

EDELAR OFFER

The offer from Andes Energía Argentina S.A. received by the Company implies a proposal to buy a purchase option for a price of USD 1,500,000 to:

	1.	In the case that the spin-off of EMDERSA is completed within the term of 2 years, to buy 78.44% of the Company’s direct and indirect stake in EDELAR for USD 20,290,000, to be paid in two payments: the first one for USD 5,290,000 90 calendar days after the acceptance of the Offer (not prior to 45 days and not later than December 15, 2011 (“Option Exercise Date”)) and the remaining balance, i.e. USD 15,000,000 will be paid two years from the acceptance of the offer, accruing interest at an annual rate of 12.5% payable semi-annually.
	2.	In the case that the spin-off of EMDERSA is not completed within the term of 2 years, the option will grant Andes Energía Argentina S.A. the right to acquire 20.27% of EMDERSA’s capital stock and votes indirectly held by Edenor, paying for such purpose the same price and in the same way indicated in caption 1 above.

On the option exercise date Andes Energía Argentina S.A. may choose not to pay the remaining balance of the price (USD 15,000,000) and acquire 6.32% of EMDERSA’s capital stock and votes indirectly held by the Company (reduced option).

Additionally, the buyer may choose not to pay the balance of the price on the final payment date and change to the reduced option system, in spite of having exercised the option to do so in the full option exercise date, in the case that the buyer is notified by the Company not less than 15 days prior to the final payment date, that the Board of Directors of EDELAR will be removed without cause, and that the Buyer will not therefore continue with the management of EDELAR after such date.

In the event that the Company fails to notify the buyer as stated above, and the Buyer pays the remaining balance of the price, the members of EDELAR’s board of directors will continue to be appointed as stipulated in the offer.

The offer also implies the buyer’s commitment to settle or acquire, on the option exercise date, the total financial loan granted by the Company to EDELAR for an amount of 31,178 plus interest accrued through the settlement date.

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In order to implement the reported transaction, the Company will contribute 53.64% of EMDERSA’s capital stock and votes to a new company to be organized (“EMDERSA Holding”). Therefore, the transfers of EMDERSA’s shares in favor of Andes Energía Argentina S.A. will be made through EMDERSA Holding.

On the option exercise date, and until the completion of the transaction described herein, the capital stock that is the object of this transaction - together with 80% of the shares of Hidroeléctrica del Sur S.A. (owned by the buyer), which in turn holds 59% of the capital stock of Hidroeléctrica Ameghino S.A - will be transferred to a guarantee trust that will be set up with the purpose of ensuring compliance with the parties’ obligations, with EDENOR maintaining EMDERSA’s control.

From the option exercise date, provided, however, that the payments due on such date have been made by the buyer, and during the term of the trust, the management of EDELAR will be in charge of a board of directors appointed by EMDERSA, in accordance with the buyer’s proposal. The board of directors will be comprised of 5 directors, four (4) of whom will be elected by the buyer and one (1) of whom will be elected by the seller, and equal number of alternate directors, four (4) of whom will be elected by the buyer and one (1) of whom will be elected by the seller.

On February 8, 2012, the Company’s Board of Directors approved a proposal from Andes Energía Argentina S.A. for the amendment of the Offer Letter. By virtue of this amendment, the term for Andes Energía Argentina S.A. to make payment and exercise the option was extended until March 31, 2012.

Until the time of payment and exercise of the option, the Company may freely sell or assign to any third party or cause the sale or assignment of some or all the shares that are the object of the transaction and/or the rights on such shares. In the event that a sale to a third party is made, Andes Energía Argentina S.A.’s option may not be exercised, there being no outstanding payment or any responsibility of any kind for the Company or Andes Energía Argentina S.A.

All the other terms and conditions of the Offer Letter will remain in full force and effect.

As of December 31, 2011, this investment has been classified as Other assets available for sale under current assets and has been valued at its estimated realizable value, which is lower than its book value. This resulted in a loss of 11,717 that has been disclosed in the Loss from valuation of other assets available for sale at net realizable value account of the Statement of Operations.

EGGSA OFFER

The offer received by the Company from its controlling shareholder Pampa Energía S.A. (PESA), implies the acquisition through a conditioned purchase and sale transaction of 78.44% of the shares and votes of an investment company to be organized, which will be holder of 99.99% of the shares and votes of EMDERSA Generación Salta S.A. (“EGSSA”) together with 0.01% of EGSSA’s capital stock held by the Company.

The condition precedent of the purchase and sale transaction is the carrying out of EMDERSA’s spin-off in the maximum term of 24 months as from the date of acceptance of the offer.

The total and final agreed-upon price for this transaction amounts to USD 10,849,000, which will be paid in two payments, the first of them for an amount of USD 2,170,000 on October 31, 2011 as partial payment of the price, and the remaining balance, i.e. an amount of USD 8,679,000 will be paid 24 months from the date of acceptance of the offer by the Company. The latter amount will accrue interest at an annual rate of 9.75%, payable semi-annually.

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Furthermore, the offer implied PESA’s commitment to settle on October 31, 2011, either by repaying, with no penalty whatsoever, or by acquiring through an assignment, the financial loan granted by the Company to EGSSA for an amount of USD 4,170,000, plus interest accrued through the settlement date.

On October 31, 2011, the Company received from PESA the amounts of USD 2,170,000 and 4,170,000 corresponding to the sale agreement of EGSSA and the settlement of the financial receivable which the Company had with EGSSA, respectively.

Five days after the spin-off has been effectively carried out, the Company will transfer the shares, in legal form and free from any liens, to PESA, which will pledge the shares in favor of the Company as security for the total payment of the balance of the price. From the initial payment date, provided, however, that the initial payment has been made, the management of EGSSA will be in charge of a board of directors, whose members the seller will cause to be appointed in accordance with the buyer’s proposal. The board of directors will be comprised of 5 directors, four (4) of whom will be elected by the buyer and one (1) of whom will be elected by the seller, and equal number of alternate directors, four (4) of whom will be elected by the buyer and one (1) of whom will be elected by the seller.

Should the condition precedent not be complied with, the amount corresponding to the initial payment of the price will be reimbursed to PESA in a term of 5 days, plus an annual interest of 6% calculated from the date on which the initial payment was made through the date of reimbursement.

As of December 31, 2011, this investment has been classified as Other assets available for sale under current assets and has been valued at its estimated realizable value, which is lower than its book value. This resulted in a loss of 19,040 that has been disclosed in the Loss from valuation of other assets available for sale at net realizable value account of the Statement of Operations.

AVAILABILITY FOR SALE - EDESA

The investment in EDESA has been disclosed as Other current assets available for sale and has been valued at its estimated realizable value, which is lower than its equity value.

In order to determine the estimated realizable value, the Company used the acquisition value duly incurred.

As of December 31, 2011, this investment has been classified as Other assets available for sale under current assets and has been valued at its estimated realizable value, which is lower than its book value. This resulted in a loss of 31,522 that has been disclosed in the Loss from valuation of other assets available for sale at net realizable value account of the Statement of Operations.

29. ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS

1.1 Application of IFRS 1

The National Securities Commmission (CNV), through Resolutions Nos. 562/09 and 576/10 has established the application of Technical Pronouncement No. 26 of the Argentine Federation of Professional Councils in Economic Sciences (subsequently amended by Technical Pronouncement No. 29 of the Argentine Federation of Professional Councils in Economic Sciences), which has adopted International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) (herein referred to as “IFRS”) for those entities included in the public offering regime under Law No. 17811, either for their capital or corporate bonds, or which have requested authorization to be included in that regime.

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IFRS will be of mandatory application for the Company as from the fiscal year commenced on January 1, 2012, with the first consolidated financial statements to be filed being those at March 31, 2012.

The Company will fully adopt IFRS as issued by the IASB as from fiscal year commenced on January 1, 2012. The presentation of the consolidated financial statements at December 31, 2011 will be adjusted for comparative purposes as a result of the adoption of IFRS. The impact of the adoption of IFRS is presented in section 1.2 which includes a reconciliation of shareholders’ equity at January 1, 2011 (date of transition to IFRS) and December 31, 2011 and a reconciliation of comprehensive income for the year ended December 31, 2011. In addition, sections 1.3 and 1.4 present:

(i)	the statements of financial position at January 1, 2011 and December 31, 2011,
(ii)	the statement of comprehensive income for the year ended December 31, 2011, and
(iii)	the main differences between Argentine GAAP and IFRS in the statement of cash flows for the year ended December 31, 2011.

The following standards and amendments have been issued by the IASB and although they are not effective they have been adopted early by the Company as from January 1, 2011:

1) IAS 1 revised “Presentation of Financial Statements”

2) IAS 19 revised “Employee benefits”.

3) IAS 27 revised “Separate financial statements”.

4) IAS 28 revised “Investment in associates and joint ventures”.

5) IFRS 9 “Financial Instruments”.

6) IFRS 10 “Consolidated financial statements”.

7) IFRS 11 “Joint Arrangements”.

8) IFRS 12 “Disclosure of interests in other entities”.

The Company has applied the following mandatory exceptions to the retrospective application of IFRS in the preparation of the reconciliations of the shareholders’ equity and comprehensive income included below:

a. Estimates

Estimates at January 1, 2011 and December 31, 2011 under IFRS are consistent with the estimates made in accordance with Argentine GAAP.

b. Classification and measurement of financial assets

Financial assets are classified and measured according to IFRS 9, which was early adopted by the Company at January 1, 2011. That standard presents two measurement categories: amortized cost and fair value, and was applied by the Company according to the events and circumstances in place at the date of transition. The application of IFRS 9 did not lead to differences between Argentine GAAP and IFRS.

c. Deemed cost

The cost of property, plant and equipment, adjusted in accordance with Argentine GAAP, has been adopted as deemed cost at the transition date to IFRS, considering that it results assimilable to its cost or depreciated cost in accordance with IFRS.

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The following mandatory exceptions provided by IFRS 1 have not been applied since they are not relevant to the Company:

•	Derecognition of financial assets and liabilities
•	Hedge accounting
•	Non-controlling interest
•	Embedded derivatives

IFRS 1 allows certain optional exemptions to the retrospective application of IFRS, with the Company having applied the following:

d. Financial assets or intangible assets accounted for in accordance with IFRIC 12 Service Concession Arrangements

IFRS 1 permits the retrospective application of IFRIC 12 "Service Concession Arrangements". This regulation does not apply to Edenor at the transition date because the Company has not fulfilled all the conditions of Paragraph 5 (b) of IFRIC 12.

The remaining optional exemptions that are not applicable for the Company are the following:

	a)	Insurance contracts
	b)	Business combination
	c)	Share-based payments transactions
	d)	Leases
	e)	Fair value or revaluation as deemed cost
	f)	Severe hyperinflation
	g)	Cumulative translation differences
	h)	Decomissioning liabilities included in the cost of property, plant and equipment
	i)	Investments in subsidiaries, jointly controlled entities and associates
	j)	Assets and liabilities of subsidiaries, associates and joint ventures
	k)	Compound financial instruments
	l)	Designation of previously recognized financial instruments
	m)	Fair value measurement of financial assets or financial liabilities at initial recognition
	n)	Borrowing costs
	o)	Transfers of assets from customers
	p)	Extinguishing financial liabilities with equity instruments
	q)	Financial assets or intangible assets accounted for in accordance with IFRIC 12 Service Concession Arrangements

Reconciliations between Argentine GAAP and IFRS

Section 1.2 presents reconciliation between Argentine GAAP and IFRS of shareholders' equity at January 1, 2011 (transition date) and December 31, 2011. Also, detailed explanation of each reconciliation adjustment is disclosed in such note.

Section 1.3 presents reconciliation between Argentine GAAP and IFRS of the statement of financial position at January 1, 2011, including a detailed explanation of each reconciliation adjustment and reclassifications disclosed in such note.

Section 1.4 presents IFRS statements of financial position at December 31, 2011 including a detailed explanation of each reconciliation adjustment and reclassifications.

Section 1.5 presents IFRS statement of total comprehensive loss for the year ended December 31, 2011, including a detailed explanation of each reconciliation adjustment and reclassifications.

Section 1.6 presents the main differences between Argentine GAAP and IFRS as they relate to the statement of cash flows for the year ended December 31, 2011.

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1.2 Reconciliation of the Shareholders’ Equity at January 1, 2011 and December 31, 2011

The following table present the reconciliation of the statement of changes in shareholders’ equity under Argentine GAAP and the Equity under IFRS:

	Note	01.01.2011			12.31.2011

Shareholders’ equity under Argentine GAAP			1,749,915			1,314,518

Employee benefits	(a)		(10,136	)		(29,120	)
Bargain purchase in the acquisition of subsidiaries	(b.i)		—			434,959
Additional losses on assets held for sale and from sale of subsidiary	(c)		—			(172,838	)
Transaction costs	(b.iv)		—			(4,269	)
Reversal of negative goodwill amortization	(b.iii)		—			(12,340	)
Acquisition of additional non-controlling interest	(d)		—			3,452
Customer contributions	(e)		—			(12,165	)
Deferred income tax	(f)		3,548			(97,379	)
Non-controlling interest	(g)		—			6,567
Equity under IFRS attributable to Edenor Shareholders’			1,743,327			1,431,385
Non-controlling interests under IFRS	(g)		—			50,302
Equity under IFRS			1,743,327			1,481,687

The following table present the reconciliation of the statement of operations under Argentine GAAP and the Comprehensive loss under IFRS:

		12.31.2011

Statement of operations under Argentine GAAP			(435,397	)

Bargain purchase in the acquisition of subsidiaries	(b.i)		434,959
Additional losses on assets held for sale and from sale of subsidiary	(c)		(172,838	)
Transaction costs	(b.iv)		(4,269	)
Reversal of negative goodwill amortization	(b.iii)		(12,340	)
Customer contributions	(e)		(12,165	)
Deferred income tax	(f)		(107,571	)
Non-controlling interest	(g)		5,564
Comprehensive loss under IFRS attributable to Edenor shareholders			(304,057	)
Non-controlling interests under IFRS			12,676
Comprehensive loss under IFRS			(291,381	)

a)	Employee benefits

At January 1, 2011 and December 31, 2011, under Argentine GAAP the Company had not recognized in its financial statements the unrecognized actuarial losses, as Argentine GAAP requires only disclosure of such amounts.

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Under IFRS, at January 1, 2011, the Company recognized in retained earnings, the cumulative unrecognized actuarial losses.

At December 31, 2011, according to IFRS, and considering that the Company has early adopted IAS 19 revised, the Company recognized the unrecognized actuarial losses in other comprehensive loss.

b)	Bargain purchase in the acquisition of subsidiaries

i)	Bargain purchase

This reconciling item corresponds to the gain recognized under IFRS, after considering all the below explained adjustments, mainly by derecognizing the negative goodwill of acquired companies plus some differences arising from a lower amount of net assets acquired.

ii)	Differences in basis relating to purchase accounting

Under Argentine GAAP the excess of the fair value of assets acquired and liabilities assumed in a business combination over the purchase price, is recognized as negative goodwill and amortized under the straight-line method over the period equal to the weighted average of the remaining useful life of the assets identified in the acquired company which are subject to depreciation.

Under IFRS, the Company has reassessed the purchase price allocation. In that connection, the following differences between Argentine GAAP and IFRS were identified:

Fair value of net assets acquired – Argentine GAAP	Note	1,202,372
Differences from application of IFRIC 12	(a)	(54,003	)
Defined benefit plan liability	(b)	(15,250	)
Derecognition of pre-operating costs	(c)	(911	)
Deferred income tax effect	(d)	24,557
Fair value of net assets acquired – IFRS		1,156,765

a)	Differences from application of IFRIC 12

In accordance with Argentine GAAP, the assets used in the framework of service concession agreements of the subsidiary EDEN (indirectly controlled through AESEBA), whether received at the time of entering into concession contracts or acquired by the companies during their term of duration, are classified as property, plant and equipment and are depreciated based on the useful life assigned for each specific asset, irrespective of the term of the concession contracts.

Under IFRS, essential assets used in the framework of service concessions, whether received at time of entering into the concession contract or acquired by the companies during their term of duration, are classified as a single asset within intangible assets and are depreciated based on the remaining useful life of the concession contract. Non essential assets for rendering the distribution service are not included within the scope of IFRIC 12, as such those assets are carried at cost subsequently depreciated, and included within property, plant and equipment.

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The effects of the recognition of IFRIC 12 in the Company’s consolidated financial statements are the following:

- Reclassification of all the essential assets received by the Concession Agreement, and considered essential to the distribution service, into a separate intangible asset “IFRIC 12 Intangible Asset”;

- Construction contracts: under Argentine GAAP, construction of infrastructure funded with customer contributions are recognized as revenue by the time the funds are received. Under IFRS, in particular under the scope of IFRIC 12, such construction should be recognized as revenues from construction deferred on the remaining useful life of the Concession Contract, considering that the operator has an obligation with the customer for providing the distribution service. Such difference gave rise to a reconciliation adjustment at the acquisition date of Ps. 54,003, decreasing the property, plant and equipment and retained earnings, and increasing IFRIC 12 intangible asset and deferred revenues.

b)	Defined benefit plan liability

Under Argentine GAAP, unrecognized actuarial losses are not recognized, but disclosed in note to the financial statements.

Under IFRS, considering that the acquired subsidiaries will adopt IFRS on 2012, they had recognized at the transition date (January 1, 2011) in their respective retained earnings the cumulative unrecognized actuarial loss. As such, Edenor has assumed at the time of acquisition an aditional liabitlity for the subsidiaries defined benefit plans. Such additional liability amounted to Ps. 15,250.

c)	Derecognition of pre-operating costs

Under Argentine GAAP, capitalized pre-operating are recognized as an intangible asset and amortized over a 5-year period.

Under IFRS such pre-operating costs are recognized as an expense on an accrual basis.

The reconciling item corresponds to the derecognition of such pre-operating costs.

d)	Deferred income tax effect

It corresponds to the effect in deferred income tax of all the above adjustments.

iii)	Reversal of negative goodwill amortization

This reconciling item corresponds to the reversal of the amortization of negative goodwill recognized under Argentine GAAP.

iv)	Transaction costs

Under Argentine GAAP, transaction costs are part of the consideration paid. The impact of such cost derived in a decrease of the negative goodwill.

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Under IFRS, such costs are not part of the consideration paid and are expensed as incurred.

The following table summarizes the effect of the differences in the consideration paid:

Consideration paid – Argentine GAAP	566,222
Transaction cost	(4,269	)
Consideration paid – IFRS	561,953

c)	Additional losses on assets held for sale and from sale of subsidiary

Additional loss on assets held for sale

The reconciling item, amounting to 115,448, corresponds to the additional loss, under IFRS, over the assets held for sale as a result of the differences on the fair value of net assets acquired at the time of acquisition and the effect of the negative goodwill that under IFRS is considered as a gain on bargain purchase. As the fair value less cost to sale is equal under both Argentine GAAP and IFRS, the difference arises from its basis of valuation at acquisition.

Additional loss from sale of subsidiary

The reconciling item, amounting to 57,390, corresponds to the additional loss under IFRS from the sale of EDESAL as a result of the negative goodwill recognized under Argentine GAAP that was previously recognize as a gain on bargain purchase under IFRS.

d)	Acquisition of additional non-controlling interest

This reconciling item corresponds to the acquisition of additional non-controlling interest in subsidiaries, that under Argentine GAAP was accounted for by deducting negative goodwill by the difference between the fair value of the non-controlling interest and the consideration paid. Under IFRS, such difference was reclassified into “Additional paid-in capital”.

e)	Customer contributions

EDEN constructs part of their equipments (essentials for rendering the distribution service) based on customer contributions. Under Argentine GAAP such contributions are recorded as revenues upon the payment by the customers. Under IFRS the income must be recognized on deferred bases since contributions are made by customers.

f)	Deferred income tax

At January 1, 2011 and December 31, 2011, this reconciling item corresponds to the recognition, under IFRS, of a deferred tax effect of all the adjustments above described.

g)	Non-controlling interest

At December 31, 2011, this reconciling item corresponds to the effect of all the adjustments to conform with IFRS as above described.

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The following tables summarizes the reconciling items in non-controlling interest between Argentine GAAP and IFRS, in Equity and Comprehensive loss, respectively:

Equity

Minority interest under Argentine GAAP	56,869
Bargain purchase	(4,773	)
Customer contributions	(791	)
Defined benefit plan	(1,003	)
Non-controlling interest under IFRS	50,302

Income / (Loss) for the year

Minority interest under Argentine GAAP	18,240
Bargain purchase	(4,773	)
Customer contributions	(791	)
Non-controlling interest under IFRS	12,676

1.3 Reconciliation of the statement of financial position at January 1, 2011

	Note	ARGENTINE GAAP (*)			TRANSITION ADJUSTMENTS			IFRS
ASSETS
NON CURRENT ASSETS
Property, plant & equipment	(a)		3,689,482			22,848			3,712,330
Supplies	(b)		23,249			(23,249	)		—
Investments in other companies			415			—			415
Trade receivables			45,531			—			45,531
Other receivables			14,803			—			14,803
Deferred tax assets			187,171			—			187,171
TOTAL NON CURRENT ASSETS			3,960,651			(401	)		3,960,250

CURRENT ASSETS
Supplies			12,407			—			12,407
Other receivables	(c)		43,361			401			43,762
Trade receivables			421,193			—			421,193
Investments	(d)		668,232			(237,396	)		430,836
Cash and cash equivalents	(d)		8,611			237,396			246,007
TOTAL CURRENT ASSETS			1,153,804			401			1,154,205
TOTAL ASSETS			5,114,455			—			5,114,455

EQUITY
Share capital			897,043			—			897,043
Inflation adjustment over share capital			986,142			—			986,142
Additional paid-in capital			18,317			—			18,317
Treasury stock - share capital value			9,412			—			9,412
Treasury stock - inflation adjustment over share capital			10,347			—			10,347
Legal reserve			64,008			—			64,008
Accumulated loss	(g)		(235,354	)		(6,588	)		(241,942	)
TOTAL EQUITY			1,749,915			(6,588	)		1,743,327

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	Note	ARGENTINE GAAP (*)		TRANSITION ADJUSTMENTS			IFRS
NON-CURRENT LIABILITIES
Trade accounts payable			50,984		—			50,984
Loans			1,035,113		—			1,035,113
Salaries and social security payable	(e)		50,633		10,136			60,769
Accrued litigation			6,816		—			6,816
Taxes			8,979		—			8,979
Deferred tax liabilities	(f)		440,998		(3.548	)		437,450
Other liabilities			984,518		—			984,518
TOTAL NON-CURRENT LIABILITIES			2,578,041		6,588			2,584,629

CURRENT LIABILITIES
Trade accounts payable			378,505		—			378,505
Loans			54,108		—			54,108
Salaries and social security taxes			180,432		—			180,432
Taxes			111,080		—			111,080
Other liabilities			4,542		—			4,542
Accrued litigation			57,832		—			57,832
TOTAL CURRENT LIABILITIES			786,499		—			786,499
TOTAL LIABILITIES			3,364,540		6,588			3,371,128
TOTAL LIABILITIES AND EQUITY			5,114,455		—			5,114,455

(*) It corresponds to the balances at December 31, 2010 included in the financial statements as of December 31, 2011, including a restatement due to the recognition of the permanent difference related to the inflation adjustment over Property, plant & equipment, which under Argentine GAAP was required to be recognized in connection with the adoption of IFRS. See further explanation in note 3.m) to the consolidated financial statements.

a)	Property, plant & equipment

The reconciliation relates to two separate effects:

i) Under Argentine GAAP advance to suppliers for the acquisition of property, plant and equipment are classified within the caption “Property, plant and equipment”.

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Under IFRS, such advances have been reclassified into a separate account, within “Other receivables”.

ii) Under Argentine GAAP, non-current supplies (spare parts of major assets depreciated over their useful lives once they set in use) are classified separately from property, plant & equipment.

Under IFRS, such non-current supplies have been reclassified into “Property, plant & equipment”, and when used, are depreciated over the remaining useful life of such major asset.

Supplies

See corresponding explanation above in 1.3.a).ii).

c)	Other receivables

See corresponding explanation above in 1.3.a).i).

d)	Cash and cash equivalents

Under Argentine GAAP, cash is disclosed separately from cash equivalents in the statement of financial position, since investments that qualify as cash equivalents are disclosed in a single line together with other current investments. Under IFRS, cash and cash equivalents are disclosed in a single line in the statement of financial position. In addition, investments that qualify as cash equivalents under IFRS have an original maturity of three month or less at the acquisition date. Moreover, some of the debt securities qualifying as cash equivalents under Argentine GAAP do not qualify as cash equivalents under IFRS.

e)	Salaries and social securities payable

This adjustment reflects the recognition of the cumulative unrecognized actuarial loss, as further explained in section 1.2.a).

f)	Deferred income tax

This adjustment reflects the recognition of the deferred tax effect on the cumulative unrecognized actuarial loss, as further explained in section 1.2.f).

g)	Accumulated loss

This corresponds to the effect of the adjustments explained above in section 1.3.e) and f).

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1.4 Reconciliation of the consolidated statement of financial position at December 31, 2011

	Note	ARGENTINE GAAP (*)			TRANSITION ADJUSTMENTS			IFRS
ASSETS
NON CURRENT ASSETS
Property, plant & equipment	(a) (c)		4,738,259			(742,949	)		3,995,310
Intangible assets	(a)		—			793,015			793,015
Negative goodwill	(b)		(289,557	)		289,557			—
Supplies	(a)		26,862			(26,862	)		—
Investments in other companies			419			—			419
Trade receivables			45,725			—			45,725
Other receivables			70,704			—			70,704
Deferred tax assets	(h)		—			131,086			131,086
TOTAL NON CURRENT ASSETS			4,592,412			443,847			5,036,259

CURRENT ASSETS
Supplies	(d)		22,863			22,462			45,325
Infrastructure under construction	(c)		—			45,504			45,504
Other receivables			244,903			—			244,903
Trade receivables			534,732			—			534,732
Investments	(e)		109,546			(107,414	)		2,132
Cash and cash equivalents	(e)		23,445			107,414			130,859
TOTAL CURRENT ASSETS			935,489			67,966			1,003,455
Assets of disposal groups classified as held for sale	(l)		216,531			984,454			1,200,985
TOTAL ASSETS			5,744,432			1,496,267			7,240,699

	Note	ARGENTINE GAAP (*)			TRANSITION ADJUSTMENTS			IFRS
EQUITY
Share capital			897,043			—			897,043
Inflation adjustment over share capital			986,142			—			986,142
Additional paid-in capital			18,317			3,452			21,769
Treasury stock - share capital value			9,412			—			9,412
Treasury stock - inflation adjustment over share capital			10,347			—			10,347
Legal reserve			64,008			—			64,008
Accumulated loss	(k)		(670,751	)		113,415			(557,336	)
Equity attributable to Edenor’ Shareholders’			1,314,518			116,867			1,431,385
Equity attributable to non-controlling interest	(j)		56,869			(6,567	)		50,302
TOTAL EQUITY			1,371,387			110,300			1,481,687

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		ARGENTINE GAAP (*)		TRANSITION ADJUSTMENTS			IFRS
NON-CURRENT LIABILITIES
Trade payables			54,344		—			54,344
Deferred revenues	(g)		—		157,338			157,338
Loans			1,189,882		—			1,189,882
Salaries and social security payables	(f)		69,527		37,567			107,094
Provisions for other liabilities			66,144		—			66,144
Taxes payable	(i)		290,879		(279,767	)		11,112
Deferred tax liabilities	(h)		—		486,375			486, 375
Other liabilities			1,373,687		—			1,373,687
TOTAL NON-CURRENT LIABILITIES			3,044,463		401,513			3,445,976

CURRENT LIABILITIES
Trade payables			658,328		—			658,328
Loans			59,025		—			59,025
Salaries and social security payables			287,115		—			287,115
Taxes payable			168,993		—			168,993
Other liabilities			144,777		—			144,777
Provisions			10,344		—			10,344
TOTAL CURRENT LIABILITIES			1,328,582		—			1,328,582
Liabilities of disposal groups classified as held for sale	(l)		—		984,454			984,454
TOTAL LIABILITIES			4,373,045		1,385,967			5,759,012
TOTAL LIABILITIES AND EQUITY			5,744,432		1,496,267			7,240,699

(*) It corresponds to the balances included in the consolidated financial statements at December 31, 2011 approved by the Board of Directors.

a)	Property, plant & equipment and Intangible assets

The reconciliation relates to the following effects:

i) Under Argentine GAAP, non-current supplies (mainly related to spare parts of major assets, depreciated on theirs useful lives) under Argentine GAAP are classified separately from Property, plant & equipment.

Under IFRS, such non-current supplies have been reclassified into “Property, plant & equipment”, and when used, are depreciated over the remaining useful life of such major asset.

ii) Intangible assets. See further explanation in section 1.2.b).ii).a).

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b)	Negative goodwill

It corresponds to the effect of the adjustment further explained in section 1.2.b) iii).

c)	Infrastructure under construction

Under Argentine GAAP, assets under construction that have not been finalized and/or assets over which no authorization has been received for the application of funds derived from the Tariff Arrangement and/or from the PUREE, were classified within “Property, plant and equipment”. In addition, infrastructure under construction funded by EDEN has been classified within “Property, plant and equipment” as well.

Under IFRS, construction of infrastructure and major maintainance are assimilable to the rendering of a construction service under the concepts of IFRIC 12 (infrastructure that comprise expansion of the network capacity). EDEN has celebrated several construction contracts where the customer only has limited influence over the design of the infrastructure. EDEN has applied IAS 11 to measure such construction contracts. In accordance with IAS 11, income derive from the transference of infrastructure should be recognized at the moment of the exchange of such assets, whereby that infrastructure that is not finalized at December 31, 2011 are included within “Infrastructure under construction”.

In addition, under IFRS infrastructure under construction funded by EDEN has been reclassified to “Infrastructure under construction”.

d)	Supplies – non-current

See corresponding explanation above in 1.4.a).i).

e)	Cash and cash equivalents

f)	Salaries and social securities payable

This adjustment reflects the recognition of the cumulative unrecognized actuarial loss, as further explained in section 1.2.a).

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g)	Deferred revenues associated with construction

This reconciling item corresponds to the adjustment described in 1.2.b) at February 28, 2011 (the acquisition date) and December 31, 2011.

h)	Deferred tax assets and liabilities

The reconciling items reflect the effect of the explained adjustments.

i)	Taxes payable

Under Argentine Gaap Deferred tax assets and liabilities are included within “Taxes payables”. Under IFRS Deferred tax assets and liabilities are included in a separate line item within non-current assets and non-current liabilities, respectively.

j)	Non-controlling interest

The reconciliation item corresponds to the following adjustments:

i) Classification of non-controlling interest

Under Argentine GAAP, the participation of third parties in controlled companies is included as a separate line item, between Total Liabilities and Shareholders’ Equity, and is denominated as “Minority interest”. As a result of the acquisition of EMDERSA and AESEBA, the Company recognized a minority interest in such companies, valued at their respective fair value.

Under IFRS, such minority interest was still valued at fair value at the acquisition date, and classified as “Non-controlling interest” within Equity.

ii) Acquisition of additional interest in controlled companies

Under Argentine GAAP the acquisition of additional interests in controlled companies was accounted for by deducting the minority interest and the difference with the purchase price gave rise to the recognition of an additional negative goodwill.

Under IFRS, the acquisition of addional interest in controlled companies was accounted for as an equity transaction. As such, the non-controlling interest was deducted by the percentages acquired, and the difference with the purchase price gave rise to a decrease in additional paid-in capital.

The reconciling item corresponds to the reversal of the additional negative goodwill and the decrease of the additional paid-in capital.

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k)	Accumulated loss

These adjustments corresponds to the impact of IFRS’ conversion adjustments in Equity.

In addition, it includes the adjustment that reflects the recognition of the actuarial loss for the year, as further explained in section 1.2.a).

l)	Assets and liabilities of disposal groups classified as held for sale

Under Argentine Gaap Assets and liabilities of disposal groups classified as held for sale are included within “Other current assets available for sale”. Under IFRS Assets and liabilities of disposal groups classified as held for sale are included in a separate line item within current assets and current liabilities, respectively.

F-87

1.5 Reconciliation of the consolidated statement of total comprehensive loss for the year ended December 31, 2011

	Note	ARGENTINE GAAP (*)			ARGENTINE GAAP (*) DISCONTINUED OPERATIONS (k)			TRANSITION ADJUSTMENTS			IFRS

Net sales	(a)		3,565,048			(764,277	)		5,046			2,805,817
Construction income	(b)		—			—			87,374			87,374
Electric power purchases	(b)		(1,593,937	)		264,511			3,968			(1,325,458	)
Cost for construction services	(b)		—			—			(87,374	)		(87,374	)
Gross margin			1,971,111			(499,766	)		9,014			1,480,359

Transmission and distribution expenses	(c)		(1,188,725	)		168,653			(74,753	)		(1,094,825	)
Selling expenses	(d)		(429,930	)		97,313			22,305			(310,312	)
Administrative expenses			(323,438	)		99,122			—			(224,316	)
Other operating expenses	(h)		(51,184	)		5,314			(364	)		(46,234	)
Other operating income	(h)		25,928			(2,768	)		(3,905	)		19,255
Share profit of joint ventures			928			(924	)		—			4
Negative Goodwill amortization	(e)		12,340			(572	)		(11,768	)		—
Gain on bargain purchase in the acquisition of subsidiaries	(f)		—			—			434,959			434,959
Loss from sale of subsidiary	(g)		—			—			—			—
Loss from valuation on disposal group held for sale			(75,029	)		248,439			(173,410	)		—
Operating profit			(57,999	)		114,811			202,078			258,890

Finance income	(k)		50,090			12,330			(8,934	)		53,486
Finance cost	(k)		(386,800	)		61,150			40,203			(285,447	)
Financial results, net			(336,710	)		73,480			31,269			(231,961	)

Loss before income tax			(394,709	)		188,291			233,347			26,929
Income tax and tax on assets expense			(22,448	)		(22,952	)		(107,571	)		(152,971	)

Loss from continuing operations	(j)		(417,157	)		165,339			125,776			(126,042	)
Loss from discontinued operations	(j)		—			(165,339	)		—			(165,339	)
Loss for the year			(417,157	)		—			125,776			(291,381	)

Other comprehensive loss
Items that will not be reclassified to profit or loss	(i)
Actuarial loss on defined benefit plans			—			—			(18,984	)		(18,984	)
Tax effect on defined benefit plans			—			—			6,644			6,644
Total Other comprehensive loss			—			—			(12,340	)		(12,340	)

Total Comprehensive loss			(417,157	)		—			113,436			(303,721	)

Loss for the year attributable to:
Equity holders of the parent			(435,397	)		—			131,340			(304,057	)
Non - controlling interest			18,240			—			(5,564	)		12,676

Comprehensive loss attributable to:
Equity holders of the parent												(315,394	)
Non - controlling interest												11,337

Weighted average of outstanding Shares												897,043,000
Loss per share												(0,325	)

(*) It corresponds to the amounts included in the consolidated financial statements at December 31, 2011 approved by the Board of Directors with,

F-88

a)	Net sales – Classification differences

The reconciling item comprise the two reclassification effects as follows:

i) ENRE Penalties

Under Argentine GAAP, “ENRE Penalties” are classified within “Net sales”, based on that those penalties will be recovered by the Company’s customers through a credit note or a discounts in their invoices for the energy received.

Under IFRS, “ENRE Penalties” are classified within “Transimission and Distribuition expenses” (as relates to the portion of penalties attributable to operation matters) and “Selling expenses” (as relates to the portion of penalties attributable to commercial matters), considering that those penalties are operating expenses for the Company.

ii) Late payment charges

Under Argentine GAAP “Late payment charges” are also classified within “Net sales”, based on that those charges relates to a fix amount and is the customer election whether or not to pay their invoices at the first or second due date without or with that charge, respectively.

Under IFRS “Late payment charges” are classified within “Financial results, net” considering that eventhough such charge for late payment is fix, it relates to an income from financing the customers invoices.

iii) Shantytowns

During the year ended December 31, 2011 the Company has provided electricity services to the Shantytowns in the City of Buenos Aires and some parts of the Greater Area of Buenos Aires. Under Argentine Gaap, as the Framework Agreement was not signed with the Federal Government, an allowance for doubtful accounts amounting to 28,610 was recognized.

F-89

Under IFRS these sales are not recognized since the conditions required have not been met.

b)	Construction activities

As described in section 1.2.b).a), under IFRS the Company accounts for as revenues, construction activities of infrastructure and maintainance funded with i) own resources; ii) customer constribution, and or iii) penalties reimbursement. EDEN considers that the risk and rewards of the infrastructure funded by the PUREE and or by the Tariff Arrangement upon authorization by the Regulator to compensate those infrastructures with funds collected in prior periods. The Company does not apply any profit margin to this infrastructures, funds with PUREE nor Tariff Arrangement.

In addition, in those constructions funded with costumer contributions the Company applies some profit margin. Under Argentine GAAP, the revenue is recognized upon the disbursement by the customer. Under IFRS, the revenue is recognized on a percentage of completion basis. As such, the reconciling item represents the reversal of the revenues recognized under Argentine GAAP and the recognition of revenues for constructions finalized.

c)	Transimission and Distribution expenses

It corresponds to the reclassification effect further explained in section 1.5.a).i).

d)	Selling expenses

It corresponds to the reclassification effect further explained in section 1.5.a).i) and iii).

e)	Negative Goodwill amortization

Under IFRS, negative goodwill is not recognized. If any excess of fair value of assets acquired and liabilities assumed exist, after reassess their valuation and the existence of any additional asset or liability, is recognized in income.

This reconciliation item corresponds to the effect of the reversal, for IFRS purpose, of the amortization of negative goodwill recognized under Argentine GAAP, in the acquisition of the Company’s subsidiaries. See further explained in section 1.2.c).

f)	Gain on bargain purchase in the acquisition of subsidiaries

It corresponds to the effect of the adjustment further explained in section 1.2.b).i).

F-90

g)	Loss on sale of subsidiary

It corresponds to the effect of the adjustment further explained in section 1.2.b).iii).

h)	Other operating expenses and other operating income

This reconciliating item corresponds to transaction costs that under Argentine GAAP are part of the consideration paid for the acquired subsidiaries. Under IFRS, such costs are not part of the consideration paid and are expensed as incurred. See further explanation in section 1.2.b).iv).

i)	Other comprehensive loss

It corresponds to the effect of the adjustments explained in 1.4.f).

j)	Discontinued operations

Under Argentine GAAP, discontinued operations have been disclosed in a separate note to the financial statements, see Note 25.

Under IFRS, an entity will present and disclose information to enable the users of the financial statements to assess the financial effects of the discontinued operations and the disposal of non-current assets (or groups of assets for disposal).

Thus, an entity will disclose (a) in the statement of comprehensive income a single amount including the total of (i) income after taxes from discontinued operations; and (ii) income or loss after taxes recognized for valuation at fair value less cost of sales, or for the disposal of assets or groups of assets for disposal which are part of the discontinued operation, and (b) a breakdown of the amount resulting from section (a) above, detailing (i) income from ordinary activities, expenses and income before taxes from discontinued operations and (ii) the income tax charge related to the above result; (iii) income recorded as a result of the valuation at fair value less cost of sales, or of the disposal of assets or groups of assets for disposal which are part of the discontinued operation; and (iv) the income tax charge related to the above result. This breakdown could be included in a Note or in the statement of comprehensive income.

The Company has shown, accordingly the results of discontinued operations under a single line in the statement of comprehensive loss and included additional required disclosure in Note 25 to the financial statements.

k)	Finance income and finance cost

It corresponds to the following effects:

i) The reclassification further explained in section 1.5.a).ii).

F-91

1.6 Reconciliation of the statement of cash flows for the year ended December 31, 2011

	ARGENTINE GAAP (*)			TRANSITION ADJUSTMENTS (1)			IFRS

Net cash flows provided by operating activities		550,380			(3,281	)		547,099

Net cash flows used in investing activities		(975,216	)		428,704			(546,512	)

Net cash flows used in financing activities		(119,016	)		—			(119,016	)

Effects of exchange rates changes on Cash & Cash equivalents		—			3,281			3,281
Cash and cash equivalents at the beginning of the year		676,843			(430,836	)		246,007
Cash and cash equivalents at the end of the year		132,991			(2,132	)		130,859
Decrease in cash and cash equivalents		(543,852	)		428,704			(115,148	)

1)	The adjustments correspond to debt securities that are not considered as cash equivalents under IFRS. See further explanation in section 1.3.d).

(*) It corresponds to the amounts included in the consolidated financial statements at December 31, 2011 approved by the Board of Directors with certain reclassifications according to conform to IFRS disclosures.

30. SUBSEQUENT EVENTS

Framework agreement

Subsequent to year-end and until the date of issuance of these consolidated financial statements, the Company received payments for a total of 12,634 from the Federal Government (Note 9).

Loans with subsidiary companies and related parties

On February 10, 2012, EDEN made a payment for 60,000 corresponding to the early repayment of loans granted by the Company.

Loans taken

On February 29, 2012, the Company took out a series of bank loans with local entities in order to meet its future capital needs for a total amount of 62,000, payable at maturity. The loans, whose average term is 159 days, accrue interest at an annual average rate of 19.4%.

EDESA sale agreement

On April 19, 2012, Edenor accepted an Offer Letter from Salta Inversiones Eléctricas S.A. (“SIESA”), pursuant to which the latter submitted to Edenor and Emdersa HOLDING a proposal to acquire, by means of a stock purchase, shares representing 78.44% of the capital stock and votes of an investment company to be incorporated as a result of the spin-off of EMDERSA under the name of “EDESA HOLDING”, which company will be the owner of (i) 90% of the capital stock and votes of EDESA, which in turn owns 99.99% of Empresa de Sistemas Eléctricos Dispersos S.A. (“Esed”) and (ii) 0.01% of the capital stock of Esed. Such stock purchase is subject to certain condition precedent, including but not limited to, the consummation of the spin-off resolved by the Board of Directors of EMDERSA on August 23, 2011. In order to implement this transaction, Emdersa HOLDING will transfer to SIESA shares of EMDERSA and as of May 5, 2012, EMDERSA and SIESA will transfer their shares in Emdersa HOLDING to a collateral trust to be created in order to secure compliance of the parties’ obligations under the Offer Letter. The shares to be transferred to the collateral trust will be returned to Emdersa HOLDING once the spin-off is completed and the EDESA Holding shares transferred to SIESA. Additionally, as of May 5, 2012, SIESA offers to (i) cause EDESA to cancel certain loan agreements grated by Edenor for an amount of Ps. 131,319,500 plus accrued interest, (ii) release EMDERSA of the guarantee granted to EDESA for an amount of Ps. 55,250,000 in respect of a loan agreement granted by certain banks to EDESA and other subsidiaries of EMDERSA; and (iii) cause EDESA to cancel, when due, certain notes issued on November 2010 for an outstanding amount of Ps. 3,8 million. The price to be paid for the EDESA HOLDING shares is U.S.$ 18 million to be paid as follows: (i) U.S.$ 15 million as of May 5, 2012; (ii) the remaining U.S.$ 3 million in five equal and consecutive annual installments at an interest rate of LIBOR plus 2% with the first one due on May 5, 2013.

F-92

31. OTHER INFORMATION

EMPRESA DISTRIBUIDORA Y COMERCIALIZADORA NORTE S.A. (EDENOR S.A.)

CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2011

EXHIBIT A

Page 1 of 2

PROPERTY, PLANT AND EQUIPMENT

	Original values																	Depreciation
MAIN ACCOUNT	At beginning of year		Incorporation balances from acq. of perm.invest.(1)		Additions		Discontinued Retirements			operations(2)			Transfers			At end of year		At beginning of year		Retirements			For the year		At end of year		Net book value2011
FACILITIES IN SERVICE
Substations		1,139,156		183,899		5,950		(7,621	)		(138,313	)		37,439			1,220,509		392,709		(1,345	)		38,325		429,689		790,820
High voltage networks		482,015		83,637		6		0			(78,921	)		15,744			502,481		169,172		0			15,501		184,673		317,808
Medium voltage networks		947,378		487,436		8,856		(5,894	)		(325,635	)		93,268			1,205,409		374,014		(887	)		43,304		416,431		788,978
Low voltage networks		1,827,121		483,526		8,149		(3,983	)		(339,692	)		117,691			2,092,812		1,075,563		(1,867	)		57,894		1,131,590		961,222
Transformation chambers and platforms		660,269		95,923		0		(308	)		(10,939	)		44,596			789,541		243,690		(60	)		22,939		266,569		522,972
Meters		745,841		190,170		499		(1,553	)		(99,737	)		111,215			946,435		313,241		(677	)		39,468		352,032		594,403

Machinery and facilities		0		56,073		0		0			(56,073	)		0			0		0		0			0		0		0
Turbines - Boilers - Transformers		0		4,342		0		0			(7	)		0			4,335		0		0			0		0		4,335
Plants - Auxiliary equipment - Equipment and Fixtures		0		19,775		33,935		(7,932	)		(18,627	)		(14,053	)		13,098		0		0			3,544		3,544		9,554
Remote control systems - Automation - Generation plants		0		7,158		113		0			(2,436	)		4,057			8,892		0		0			6,647		6,647		2,245
Maintenance		0		26,625		0		0			(26,625	)		0			0		0		0			0		0		0
Expansion project - Mandatory works and tasks		0		31,116		0		0			0			0			31,116		0		0			0		0		31,116
Buildings		107,072		51,243		6,778		(853	)		(25,321	)		4,707			143,626		24,079		(409	)		5,815		29,485		114,141
Communications network and facilities		103,009		2,318		0		0			0			0			105,327		66,391		0			0		66,391		38,936
Total facilities in service		6,011,861		1,723,241		64,286		(28,144	)		(1,122,326	)		414,663			7,063,581		2,658,859		(5,245	)		233,437		2,887,051		4,176,530
FURNITURE, TOOLS AND EQUIPMENT
Furniture, equipment and software projects		200,007		19,475		2,277		(2,318	)		(13,978	)		859			206,322		186,950		(2,591	)		11,109		195,469		10,853
Tools and other		48,291		7,041		742		(136	)		(3,378	)		1,581			54,141		44,288		(96	)		1,658		45,850		8,291
Transportation equipment		28,765		7,194		2,285		(995	)		(765	)		1,386			37,870		17,144		(874	)		6,029		22,299		15,571
Total furniture, tools and equipment		277,063		33,710		5,304		(3,449	)		(18,121	)		3,825			298,333		248,382		(3,560	)		18,796		263,618		34,715
Total assets subject to depreciation		6,288,924		1,756,951		69,590		(31,593	)		(1,140,447	)		418,489			7,361,914		2,907,241		(8,805	)		252,233		3,150,669		4,211,245
CONSTRUCTION IN PROCESS
Transmission		138,526		51,803		261,325		399			(27,889	)		(188,341	)		235,823		0		0			0		0		235,823
Distribution and other		169,273		63,297		322,445		347			(34,023	)		(230,148	)		291,191		0		0			0		0		291,191
Total construction in process		307,799		115,100		583,770		746			(61,912	)		(418,489	)		527,014		0		0			0		0		527,014
Total 2011		6,596,723		1,872,051		653,360		(30,847	)		(1,202,359	)		0			7,888,928		2,907,241		(8,805	)		252,233		3,150,669		4,738,259

(1) Notes 27 and 28

(2) Notes 2, 27 and 28

F-93

EMPRESA DISTRIBUIDORA Y COMERCIALIZADORA NORTE S.A. (EDENOR S.A.)

BALANCE SHEET AS OF DECEMBER 31, 2010 AND 2009

EXHIBIT A

Page 2 of 2

PROPERTY, PLANT AND EQUIPMENT

(stated in thousands of pesos)

	Original value																	Depreciation
MAIN ACCOUNT	At beginning of year		Additions		Retirements (1)			Transfers			At end of year		At beginning of year		Retirements (1)			For the year		Annual rate	At end of year		Net book value 2010		Net book value 2009
FACILITIES IN SERVICE
Substations		1,027,225		0		0			111,931			1,139,156		362,172		0			30,537	3 - 4%		392,709		746,447		665,053
High voltage networks		462,272		0		0			19,743			482,015		156,557		0			12,615	3 - 4%		169,172		312,843		305,715
Medium voltage networks		881,843		0		(122	)		65,657			947,378		348,568		(104	)		25,550	3 - 4%		374,014		573,364		533,275
Low voltage networks		1,771,311		0		(2,212	)		58,022			1,827,121		1,032,580		(1,444	)		44,427	4 - 5%		1,075,563		751,558		738,731
Transformation chambers and platforms		615,038		0		(543	)		45,774			660,269		224,852		(237	)		19,075	3 - 4%		243,690		416,579		390,186
Meters		679,812		0		0			66,029			745,841		285,626		0			27,615	4 - 5%		313,241		432,600		394,186
Buildings		96,374		0		(2,634	)		13,332			107,072		23,152		(465	)		1,392	2 - 3%		24,079		82,993		73,222
Communications network and facilities		96,315		0		0			6,694			103,009		61,477		0			4,914	4 - 5%		66,391		36,618		34,838
Total facilities in service		5,630,190		0		(5,511	)		387,182			6,011,861		2,494,984		(2,250	)		166,125			2,658,859		3,353,002		3,135,206
FURNITURE, TOOLS AND EQUIPMENT
Furniture, equipment and software projects		191,338		8,706		(37	)		0			200,007		177,755		(37	)		9,232	12 - 13%		186,950		13,057		13,583
Tools and other		46,878		1,695		(282	)		0			48,291		43,896		(265	)		657	10 - 11%		44,288		4,003		2,982
Transportation equipment		23,837		5,040		(112	)		0			28,765		14,874		(96	)		2,366	20%		17,144		11,621		8,963
Total furniture, tools and equipment		262,053		15,441		(431	)		0			277,063		236,525		(398	)		12,255			248,382		28,681		25,528
Total assets subject to depreciation		5,892,243		15,441		(5,942	)		387,182			6,288,924		2,731,509		(2,648	)		178,380			2,907,241		3,381,683		3,160,734
CONSTRUCTION IN PROCESS
Transmission		157,329		112,871		0			(131,674	)		138,526		0		0			0	—		0		138,526		157,329
Distribution and other		164,323		260,458		0			(255,508	)		169,273		0		0			0	—		0		169,273		164,323
Total construction in process		321,652		373,329		0			(387,182	)		307,799		0		0			0			0		307,799		321,652
Total 2010		6,213,895		388,770		(5,942	)		0			6,596,723		2,731,509		(2,648	)		178,380			2,907,241		3,689,482		—
Total 2009		5,818,111		404,310		(8,526	)		0			6,213,895		2,561,853		(5,763	)		175,419			2,731,509		—		3,482,386

(1) Includes net value of retirements for the sale of real property as of December 31, 2010 for 2,169 (Notes 3.g and 4.i).

F-94

EMPRESA DISTRIBUIDORA Y COMERCIALIZADORA NORTE S.A. (EDENOR S.A.)

CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2011 AND 2010

EXHIBIT C

INVESTMENTS IN OTHER COMPANIES

(stated in thousands of pesos)

									Information on the Issuer
										Last financial statement issued
Name and features of securities	Class	Face value		Number	Adjusted cost	Value on equity method	Net book value 2011		Main activity	Date	Nominal Capital Stock	Income for the year	Equity	% interest in capital stock	Net book value 2010

OTHER ASSETS AVAILABLE FOR SALE
(Notes 27 and 28)
EMDERSA HOLDING	common	$	1	126,911,946	252,838	389,050	389,050		Electric power distribution services	12/31/2011	126,912	6,232	262,119	99.99	—
Goodwill:
- Original value							(125,554	)
- Accumulated amortization							5,092
- Residual value							(120,462	)

EMDERSA	common	$	1	3,247,294	5,647	10,222	10,222		Electric power distribution services	12/31/2011	235,311	40,144	743,095	1.38	—
Goodwill:
- Original value							0
- Accumulated amortization							0
- Residual value							0

Adjustment for valuation at NRV							(62,279	)

Subtotal Other assets available for sale							216,531								—

NON-CURRENT INVESTMENTS

Section 33 Law No. 19550 as amended -Companies-

Related Company:
SACME S.A.	common non- endorsable	$	1	6,000	15	419	419		Electric power services	12/31/2011	12	8	838	50.00	415
Total							419								415

F-95

EMPRESA DISTRIBUIDORA Y COMERCIALIZADORA NORTE S.A. (EDENOR S.A.)

CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2011 AND 2010

EXHIBIT D

OTHER INVESTMENTS

(stated in thousands of pesos)

	Net book value
MAIN ACCOUNT	2011		2010

CURRENT INVESTMENTS

Time deposits
. in foreign currency (Note 31 Exhibit G)		48,511		17,523

Money market funds
. in local currency		58,903		117,458

Government Bonds, Corporate Notes and Shares (1)
. in foreign currency (Note 31 Exhibit G)		2,132		533,251

Total Current Investments		109,546		668,232

Total Investments		109,546		668,232

(1) Includes Corporate Notes of Transener S.A. for 17,527 as of December 31, 2010.

F-96

EMPRESA DISTRIBUIDORA Y COMERCIALIZADORA NORTE S.A. (EDENOR S.A.)

CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2011 AND 2010

EXHIBIT E

ALLOWANCES AND ACCRUALS

Page 1 of 3

	2011
MAIN	At beginning		Incorpor. of balances acquis.of perm.invest.										At end of
ACCOUNT	of year		(1)		Increases		Decreases			Reclassifications			year

Deducted from current assets
For doubtful accounts (2)		29,259		26,400		37,923		(7,354	)		0			86,228
For other doubtful accounts		12,799		4,358		1,495		(6,399	)		0			12,253

For doubtful recoverability of tax loss carryforward		0		0		149,011		0			0			149,011

Deducted from non-current assets
For supplies obsolescence		0		3,449		516		(3,115	)					850

Included in current liabilities
Accrued litigation		57,832		17,169		3,604		(14,720	)		(53,541	)		10,344

Included in non-current liabilities
Accrued litigation		6,816		2,751		4,490		(1,454	)		53,541			66,144

(1) See Notes 27 and 28.

(2) The Increases column includes 28,600 corresponding to the allowance for amounts receivable under the Framework Agreement (Note 9).

F-97

EMPRESA DISTRIBUIDORA Y COMERCIALIZADORA NORTE S.A. (EDENOR S.A.)

BALANCE SHEETS AS OF DECEMBER 31, 2010

ALLOWANCES AND ACCRUALS

EXHIBIT E

Page 2 of 3

(stated in thousands of pesos)

	2010
MAIN ACCOUNT	At beginning of year		Additions		Retirements			Recoveries			At end of year

Deducted from current assets

For doubtful accounts		19,688		16,313		(6,742	)		0			29,259

For other doubtful accounts		7,908		4,891		0			0			12,799

Included in current liabilities

Accrued litigation		62,813		3,613		(8,594	)		0			57,832

Included in non-current liabilities

Accrued litigation		10,084		0		(868	)		(2,400	)		6,816

F-98

EMPRESA DISTRIBUIDORA Y COMERCIALIZADORA NORTE S.A. (EDENOR S.A.)

BALANCE SHEETS AS OF DECEMBER 31, 2009

ALLOWANCES AND ACCRUALS

EXHIBIT E

Page 3 of 3

(stated in thousands of pesos)

	2009
MAIN ACCOUNT	At beginning of year		Additions		Retirements			Recoveries (1)			At end of year

Deducted from current assets

For doubtful accounts		33,097		20,327		(6,780	)		(26,956	)		19,688

For other doubtful accounts		4,573		3,975		(640	)		0			7,908

Included in current liabilities

Accrued litigation		52,756		15,500		(5,443	)		0			62,813

Included in non-current liabilities

Accrued litigation		45,078		559		0			(35,553	)		10,084

(1) The 26,956 relate to the Framework Agreement with the Province of Buenos Aires (Notes 4.i and 9, and Note 31 Exhibit H).

The 35,553 related to the recovery of the accrual for tax contingencies (Notes 3.i and 4.i).

F-99

EMPRESA DISTRIBUIDORA Y COMERCIALIZADORA NORTE S.A. (EDENOR S.A.)

CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2011 AND 2010

EXHIBIT G

FOREIGN CURRENCY DENOMINATED ASSETS AND LIABILITIES

	2011						2010
					Booked				Booked
	Currency		Exchange		amount in		Currency		amount in
	and		rate		thousands		and		thousands
Account	amount (2)		(1)		of pesos		amount (2)		of pesos
Current assets
Cash and banks	US$	1,068,858		4.264		4,558	US$	382,816		1,507
	EUR	50,679		5.534		280	EUR	45,911		240

Investments	US$	11,884,495		4.264		50,643	US$	139,932,495		550,774

Other receivables	US$	3,856,859		4.264		16,446	US$	1,032,065		4,063
	EUR	176,470		5.534		977	EUR	111,954		584

Other assets available for sale (3)	EUR	415		5.534		2	EUR	0		0
	£	1,000		6.627		7	£	0		0
	R$	1,000		2.302		2	R$	0		0
Total Current assets						72,914				557,168
Non-current assets
Property, plant and equipment	US$	371,444		4.264		1,584	US$	0		0
Total Non-current assets						1,584				0
Total Assets						74,498				557,168
Current liabilities
Trade accounts payable	US$	11,880,241		4.304		51,133	US$	4,476,084		17,797
	EUR	237,695		5.586		1,328	EUR	304,112		1,603
	NOK	969,782		0.723		701	CHF	153,989		653
Related parties	US$	638,434		4.304		2,735

Loans	US$	6,414,498		4.304		27,608	US$	5,582,495		22,196

Other liabilities	US$	1,847,618		4.304		7,952	US$	338,302		1,345

Other assets available for sale (3)	US$	37,000		4.304		160	US$	0		0

Total Current liabilities						91,617				43,594
Non-current liabilities
Financial debts	US$	272,148,234		4.304		1,171,326	US$	255,969,567		1,017,735
Total Non-current liabilities						1,171,326				1,017,735
Total Liabilities						1,262,943				1,061,329

(1) Selling and buying exchange rate of Banco de la Nación Argentina in effect at the end of the year

(2) US$ = US Dollar; EUR = Euro; CHF Swiss Franc; R$ = Brazilian Real; £ = Pound Sterling; NOK = Norwegian Krone

(3) Related to foreign currency denominated asset / liability balances, discounted from discontinued operations

F-100

EMPRESA DISTRIBUIDORA Y COMERCIALIZADORA NORTE S.A. (EDENOR S.A.)

INFORMATION REQUIRED BY SECTION 64 SUB-SECTION b) OF LAW No. 19,550

EXHIBIT H

FOR THE YEARS ENDED DECEMBER 31, 2011, 2010 AND 2009

(stated in thousands of pesos)	2011								2010		2009
Description	Transmission and Distribution Expenses		Selling Expenses		Administrative Expenses		Total		Total		Total
Salaries and social security taxes		499,020		125,599		141,318		765,937		438,348		330,358
Postage and telephone		8,521		16,787		5,139		30,447		19,221		15,038
Bank commissions		0		15,067		2,530		17,597		10,667		9,373
Allowance for doubtful accounts (1)		0		39,418		0		39,418		21,204		18,582
Supplies consumption		64,133		1,830		3,902		69,865		40,204		37,727
Work by third parties		333,713		158,597		41,621		533,931		180,458		165,341
Rent and insurance		4,612		980		17,429		23,021		18,841		11,697
Security services		8,159		2,301		15,140		25,600		9,585		6,854
Fees		13,078		50		11,542		24,670		6,322		6,233
Computer services		876		7,942		29,668		38,486		33,804		28,602
Public relations and marketing		0		0		11,522		11,522		13,525		11,738
Advertising and sponsorship		8		397		7,500		7,905		4,919		5,031
Temporary personnel and Reimbursements to personnel		2,261		473		3,383		6,117		3,849		4,489
Depreciation of property, plant and equipment		242,917		3,347		5,969		252,233		178,380		175,419
Directors and Supervisory Committee members' fees		0		0		6,553		6,553		3,672		2,860
Taxes and charges		5,766		56,285		8,189		70,240		22,857		19,940
Other		5,661		857		12,033		18,551		3,566		2,291
Total 2011		1,188,725		429,930		323,438		1,942,093		—		—
Total 2010		636,289		194,236		178,897		—		1,009,422		—
Total 2009		548,583		158,956		144,034		—		—		851,573

(1) As of December 31, 2009, net of recovery of the allowance Framework Agreement with the Province of Buenos Aires for 5,720 (Notes 4.i and 9 and Note 31 Exhibit E).

F-101

32. SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN ARGENTINE GAAP AND US GAAP

The Company’s consolidated financial statements have been prepared in accordance with Argentine GAAP and the regulations of the CNV, which differs in certain respects from US GAAP. Such differences involve certain methods for measuring the amounts shown in the financial statements, as well as additional disclosures required by US GAAP and the regulations of the SEC.

As discussed in Note 2, under Argentine GAAP, the consolidated financial statements are presented in constant pesos based on the application of therein mentioned resolutions. This reconciliation, as permitted by SEC regulations, does not include the effects of inflation on US GAAP net income and shareholders’ equity.

I.	Differences in Valuation Methods

The main differences between Argentine GAAP and US GAAP are described below together with an explanation, where appropriate, of the method used in the determination of the adjustments that affect net income and total shareholders’ equity. References below to “ASC” are to FASB Accounting Standard Codification.

a)	Acquisition of subsidiaries

As discussed in Notes 27 and 28, the Company has acquired during the year 2011 the control shareholding of EMDERSA and of AESEBA.

Under both Argentine GAAP and US GAAP the Company applied the purchase method of accounting to its business combination. Accordingly, the fair value of assets acquired and liabilities assumed have been determined. Under Argentine GAAP, the excess of these fair values over the minority interest (determined as the percentage of the minority interest over the fair value of the 100% of the net assets acquired) and the consideration paid is considered as negative goodwill and is amortized over the straight-line basis on a period equal to the weighted average of the non-current assets acquired subject to depreciation.

Under US GAAP, the non-controlling interest has been valued at fair value, using an income approach. Such fair value did not give rise to significant differences as compared to the non-controlling interest calculated under Argentine GAAP. In addition, under US GAAP the excess of the fair value of the net assets acquired, including those recognized in the reassessment of the purchase price allocation, over the consideration paid and the non-controlling interest has been considered as a gain in bargain purchase, because the seller had started a process for divesting its net assets in the region and, consequently, it sold them at values lower than their respective fair value.

F-102

Differences in basis relating to purchase accounting

Under US GAAP, the Company has reassessed the purchase price allocation. In that connection, the following differences between Argentine GAAP and US GAAP were identified:

Fair value of net assets acquired – Argentine GAAP		1,202,372
Customer contributions	(a)	(54,003	)
Defined benefit plan liability	(b)	(15,250	)
Derecognition of pre-operating costs	(c)	(911	)
Effect on deferred tax over the above adjustments	(d)	24,557
Fair value of net assets acquired – US GAAP		1,156,765

a)	Customer contributions

Eden (subsidiary of AESEBA) receives funds from its customers to fund the constructions of infrastructure essential for the services to be rendered by Eden to these particular customers. These funds has the particularity that they are not reimbursable by Eden to their customers.

Under Argentine GAAP, these contributions are recognized as income at the time they are collected by Eden.

Under US GAAP, such contributions are recognized as a deferred revenue and amortized over the useful life of the infrastructure to be constructed.

b)	Defined benefit plan liability

Under Argentine GAAP, unrecognized actuarial losses are only disclosed in note to the consolidated financial statements.

Under US GAAP, the Company recognized in the acquisition of EMDERSA and AESEBA the unrecognized actuarial losses as an additional liability.

c)	Derecognition of pre-operating costs

Under Argentine GAAP, capitalized pre-operating are recognized as an intangible asset and amortized over a 5-year period.

Under US GAAP such pre-operating costs are recognized as an expense as incurred.

The reconciling item corresponds to the derecognition of such pre-operating costs.

d)	Effect on deferred tax over the above adjustments

It corresponds to the tax effect over the above explained adjustments a), b) and c).

b)	Additional losses on assets held for sale and from sale of subsidiaries

Additional loss on assets held for sale

F-103

The reconciling item, amounting to 115,448, corresponds to the additional loss under US GAAP over the assets held for sale compared to Argentine GAAP due to a higher carrying amount under US GAAP.

Additional loss from sale of subsidiaries

The reconciling item, amounting to 57,390, corresponds to the additional loss under US GAAP from the sale of EDESAL due to the recognition of a bargain purchase under US GAAP.

c)	Reversal of negative goodwill

As explained above in Note 32.I.a, under Argentine GAAP the excess of fair value of net assets acquired over consideration paid and non-controlling interest is accounted for as negative goodwill and amortized. Under US GAAP, such difference is accounted for as a gain on bargain purchase. As such, this reconciling item corresponds to the reversal of the amortization of negative goodwill.

d)	Transaction costs

Under Argentine GAAP, transaction costs are part of the consideration paid. The impact of such cost derived in a decrease of the negative goodwill.

Under US GAAP, such costs are not part of the consideration paid and are expensed as incurred.

The following table summarizes the effect of the differences in the consideration paid:

Consideration paid – Argentine GAAP	566,222
Transaction cost	(4,269	)
Consideration paid – US GAAP	561,953

e)	Deferred income taxes

As discussed in Note 3.m and 5, the Company records income taxes using the liability method. Accordingly, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets are also recognized for tax loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recorded or settled. The effect of a change in tax rates is recognized in income in the period when enacted. This standard is similar to the principles of US GAAP set forth in Topic 740 “Income Taxes”.

Under Argentine GAAP, until last fiscal year, the Company has treated the differences between the price-level restated amounts of assets and liabilities and their historical basis as permanent differences for deferred income tax calculation purposes. Under US GAAP such differences should be treated as temporary differences in calculating deferred income taxes. Moreover, under Argentine GAAP during fiscal year 2011, in connection with the adoption of IFRS, as further explained in Note 29, the Company has recognized a deferred tax liability corresponding to such permanent difference before explained, as it was required by the R.G. N° 576/10 Comisión Nacional de Valores (National Securities Commission or CNV). As a consequence of this adopted criteria, a deferred tax liability amounted to 331,283, 358,263 and 383,241 have been computed retroactively as of January 1, 2011, 2010 and 2009, respectively. As a consequence of this explanation, there are no longer differences between Argentine GAAP and US GAAP in this connection.

F-104

Therefore, for the years ended December 31, 2011, 2010 and 2009, the US GAAP reconciling items related to deferred income tax in net (loss) income are as follows:

	For the year ended December 31,
	2011			2010			2009

Interest capitalized		1,783			1,783			1,783
Deferred income tax effect on the adjustment to present value of the notes		—			(1,469	)		(1,835	)
Acquisition of subsidiaries		(152,236	)		—			—
Additional losses on assets held for sale and from sale of subsidiaries		40,407			—			—
Troubled debt restructuring		(9,546	)		(9,893	)		(15,645	)
Accruals - ENRE penalties		—			—			(24,991	)
Investments in marketable securities		154			2,554			(116	)
Customers contributions		4,258			—			—
Other		(61	)		101			(79	)
Total effect of deferred income tax in net (loss) income from continuing operations		(115,241	)		(6,924	)		(40,883	)

	As of December 31,
	2011			2010

Interest capitalized		(22,507	)		(24,290	)
Acquisition of subsidiaries		(152,236	)		—
Defined benefit plans		10,192			3,548
Troubled debt restructuring and adjustment to present value of the notes		—			9,546
Additional losses on assets held for sale and from sale of subsidiaries		40,407			—
Customers contributions		4,258			—
Other		1,540			1,602
Total effect of deferred income tax in Equity (for continuing operations)		(118,346	)		(9,594	)

f)	Interest capitalized – net

Through December 31, 2005, the capitalization of financial costs was discretionary under Argentine GAAP. Thus, the Company capitalized financial costs in property, plant and equipments from 1997 to 2001 and subsequently discontinued such capitalization in 2001. As from January 1, 2006, and as required by CNV General Resolution N° 485, the capitalization of financial costs is mandatory, thus, the Company capitalized financial costs during the years ended December 31, 2011 and 2010.

Under US GAAP, the Company applied Topic ASC 835 “Interest” whereby interest capitalization on assets is mandatory for those assets which require a period of time to get them ready for their intended use. As such, the US GAAP reconciling ítem represents the additional depreciation of the interest capitalized during the period from January 1, 2002 through December 31, 2005.

F-105

The effect of this US GAAP adjustment on net income and shareholders’ equity are presented in the Note 32.I.m).

g)	Troubled debt restructuring and repurchases of debt

On February 22, 2006, the Company obtained the consent from 100% of its bond holders for the restructuring of financial debt amounting to US$ 540.9 million as of that date.

Under Argentine GAAP, the restructuring of the financial debt was treated as an exchange of debt instruments with substantially different terms. As a result, the Company de-recognized the former debt from the balance sheet and recognized the new debt at its present value, discounted at a 10% market interest rate. The gain on extinguishment of former debt (net of restructuring costs) recorded as of December 31, 2006 amounted to 179.2 million.

For US GAAP purposes, the restructuring of the debt was accounted for in accordance with Debt topic Trouble Debt Restructurings subtopic of the FASB Accounting Standards Codification (ASC 470-60) as the creditors made certain concessions due to the financial difficulties of the Company. ASC 470-60 requires that a comparison be made between the future cash outflows associated with the new debt instruments (including interest), and the recorded amount of the payables (including interest, penalties and withholding income tax) at the time of restructuring. A gain on a troubled debt restructuring is only recognized when the carrying amount of the payable at the time of restructuring exceeds the total future cash payments specified by the new debt terms. Since the total future cash outflows associated with the new debt instruments exceeded the carrying value of the old debts, no gain on restructuring was recorded under US GAAP. As a result, the carrying amount of the new debt instruments under US GAAP was greater than the amount recorded under Argentine GAAP and a new effective interest rate was determined, which equated the present value of the future cash payments specified by the new debt instruments with the carrying amount of the old debt.

Additionally, for US GAAP purposes, the debt restructuring was completed on April 24, 2006, which was the date when the cash tender and early payment took effect and the new notes were issued. In addition to the reversal of the gain recognized under Argentina GAAP, interest expense from February 22, 2006 to December 31, 2011, was increased by approximately Ps. 149,617 million for US GAAP purposes. The tax basis of the new notes (before the adjustment to present value, see below) is the same as its carrying amount under Argentine GAAP which differs from the carrying amount under US GAAP as explained above. Thus, the deferred tax asset attributable to such difference amounting to Ps. 3,335 and Ps. 9,893 as of December 31, 2011 and 2010 respectively was included in deferred income tax in Note 32.I.m) below.

Gain on troubled debt restructuring, after the repurchases of financial debt, due to carrying amount exceeding future cash flows amounting to Ps. 66,803 as of December 31, 2007 also represents a reconciling item.

On December 13, 2010, the Company redeemed US$ 8.0 million principal amount of the outstanding Fixed Rate Par Notes due 2016, which generated a net gain amounting to Ps. 858 thousands and which has been reversed for US GAAP purposes. As a result of the redemption and other repurchases, the Company had no Fixed Rate Par Notes due 2016 outstanding at December 31, 2010.

On March 3, 2011, the Company redeemed US$ 12.7 million principal amount of the outstanding Floating Rate Par Notes due 2016, which generated a net gain amounting to Ps. 18,242 thousands and which has been reversed for US GAAP purposes. As a result of the redemption and other repurchases, the Company had no Floating Rate Par Notes due 2016 outstanding at December 31, 2011.

These notes constituted an “Early extinguishment of debt”. The cash flows showed that the carrying amount of the payable exceeded the future cash payments. As such, these facts implied that gains should have been recognized as of the date of the measurements of the debt amounting to Ps. 42,910, and 41,570, as of December 2011 and 2010, respectively (excluding the gain on debt restructuring already recognized in 2007).

F-106

The following items were reversed out under US GAAP for the year ended December 31, 2011 and 2010:

- the loss from the purchase and redemption of notes due in 2016 during 2007 (Ps. 10,2 million);

- the gain from the purchase and redemption of notes due in 2016 during 2008 (Ps. 55,2 million);

- the gain from the purchase and redemption of notes due in 2016 during 2009 (Ps. 46,2 million);

- the loss from the purchase and redemption of notes due in 2016 during 2010 (Ps. 0,7 million);

- the loss from the purchase and redemption of notes due in 2016 during 2011 (Ps. 25,3 million);

- the adjustment to present value of purchased and redeemed notes due in 2016 during 2007 (loss of Ps. 8,6 million);

- the adjustment to present value of purchased and redeemed notes due in 2016 during 2008 (gain of Ps. 9,0 million);

- the adjustment to present value of purchased and redeemed notes due in 2016 during 2009 (gain of Ps. 8,0 million);

- the adjustment to present value of purchased and redeemed notes due in 2016 during 2010 (gain of Ps. 1,6 million); and,

- the adjustment to present value of purchased and redeemed notes due in 2016 during 2011 (gain of Ps. 25,8 million).

Aditionally, as of December 31, 2011, 2010, and 2009, deferred tax assets amounting to 6,211, 1,469, and 1,835, respectively were recognized under Argentine GAAP as a temporary difference generated by the adjustment to present value of the notes repurchased and by the redeemed notes, respectively, which amounts were also reversed under US GAAP.

The deferred income tax effect on the trouble debt restructuring (including the adjustment to present value) amounting to 9,546 was recorded for US GAAP purposes.

The effect of these US GAAP adjustments on net (loss) income and shareholders’ equity is presented in the Note 32.I.m) below.

h)	Investments in marketable securities

Under Argentine GAAP, the Company’s investments in debt and equity securities are carried at market value with unrealized gains and losses, if any, included in the consolidated statement of operations.

Under US GAAP, the Company has classified these investments as available-for-sale and is carrying these investments at fair value with unrealized gains and losses, if any, included in other comprehensive income in the shareholders’ equity in accordance with topic ASC 320 “Investments - Debt and equity securities”. Specific identification was used to determine cost in computing realized gain or loss. The Company’s investments are considered available-for-sale as these securities could potentially be sold in response to needs for liquidity, changes in the availability of and the yield on alternative instruments or changes in funding sources or terms.

Management determines the appropriate classification of debt and equity securities at the time of purchase and reevaluates such designation as of each balance sheet date. The topic ASC 320 also states that for individual securities classified as available-for-sale an enterprise shall determine whether a decline in fair value below the amortized cost basis is other than temporary.

					Gross Unrealized
December 31, 2011	Cost		Fair Value		Gain		Loss
Money Market Funds		58,463		58,903		440		—
Corporate Debt Securities		2,132		2,132		—		—
Total		60,595		61,035		440		—

F-107

Under US GAAP, as of December 31, 2011, the Company has assessed if an other-than-temporary impairment existed. No other-than-temporary impairment exists since none of the conditions prescribed by Topic ASC 320-10-35-33A through 33I were complied with.

					Gross Unrealized
December 31, 2010	Cost		Fair Value		Gain		Loss
Government Bonds		115,616		117,458		1,842		—
Money Market Funds		102,639		102,415		—		(224	)
Corporate Debt Securities		425,156		430,836		5,680		—
Total		643,411		650,709		7,522		(224	)

The maturities as of December 31, 2011, of the available-for-sale Corporate Debt Securities included in the balance sheet were as follows:

		Carrying value				Maturing within 1 year				Maturing after 1 year but within 5 years				Maturing after 5 years but within 10 years
Corporate Debt Securities			2,132				2,132				—				—

i)	Trust Consolidation

Under Argentina GAAP the Trust was not consolidated with the Company’s financial statements but included as a non current investment and valued at the fair value of the outstanding financial instruments as of December 31, 2008.

Under US GAAP, the Company followed the Consolidation Topic of the FASB Accounting Standards Codification. The Trust was determined to be a Variable Interest Entity (VIE) since, as stated in the Edenor’s Financial Trust Agreement, Edenor has the ability to make decisions about the Trust's activities, is obligated to absorb the expected losses of the Trust if they occur, and has the right to receive the expected residual returns of the Trust if they occur. Based on these facts, as Edenor is the primary beneficiary of the Trust, it had been consolidated in the Company’s financial statements as of December 31, 2008.

In 2008, the total amount of Ps. 49,015 was composed of (i) Ps. 32,049, gain corresponding to the difference between the cost incurred in the acquisition of the bonds and its respective book value at the acquisition date, (ii) Ps. 16,966, gain, corresponding to the reversal of the loss for the mark to market adjustment and interest income recorded by the financial trust under Argentine GAAP.

On September 3, 2009, the discretionary trust was dissolved and the trust property was liquidated and transferred to the Company. As such, during 2009 under US GAAP this adjustment was reversed. The effect of these US GAAP adjustments on net income and shareholders’ equity is presented in the Note 32.I.m) below.

j)	Customer contributions

This reconciling item corresponds to the recognition of the customer contributions received by EDEN, subsequently to its acquisition by the Company, at the year end. See further explanation in Note 32.I.a) a).

F-108

k)	Acquisition of additional non-controlling interest

As further explained in Notes 27 and 28, the Company acquired additional interst in EMDERSA (1.3%) during 2011. This reconciling item corresponds to the acquisition of additional non-controlling interest in subsidiaries that under Argentine GAAP was accounted for by increasing negative goodwill by the difference between the fair value of the non-controlling interest acquired and the consideration paid. Under US GAAP, such difference was reclassified into “Additional paid-in capital” as this transaction qualifies as an equity transaction.

l)	Non-controlling interest

This reconciling item corresponds to the effect over non-controlling interest of the above explained adjustments. The following tables show the reconciliation of non-controlling interest in net loss and shareholders’ equity:

Equity

Minority interest under Argentine GAAP	56,869
Bargain purchase	(4,773	)
Customer contributions	(791	)
Defined benefit plan	(1,003	)

Non-controlling interest under US GAAP	50,302

Loss for the year

Minority interest under Argentine GAAP	18,240
Bargain purchase	(4,773	)
Customer contributions	(791	)

Non-controlling interest under US GAAP	12,676

F-109

m)	Effects of conforming to US GAAP

The reconciliation of reported (loss) net income required to conform to US GAAP is as follows:

	For the year ended December 31,
	2011			2010	(*)	2009	(*)

Net (loss) income under Argentine GAAP		(435,397	)	(49,053	)	117,623

Acquisition of subsidiaries (Note 32.I.a)		434,959		—		—
Additional losses on assets held for sale and from sale of subsidiaries (Note 32.I.b)		(172,838	)	—		—
Reversal of negative goodwill (Note 32.I.c)		(12,340	)	—		—
Transaction cost (Note 32.I.d)		(4,269	)	—		—
Deferred income tax (Note 32.I.e)		(115,241	)	(6,924	)	(40,883	)
Interest capitalized – net (Note 32.II.b)		(5,095	)	(5,095	)	(5,095	)
Trouble debt reestructuring and repurchases of debt (Note 32.II.c)		27,275		32,463		49,944
Investments in marketable securities (Note 32.I.h)		(440	)	(7,298	)	332
Trust consolidation (Note 32.I.i)		—		—		(49,015	)
Customers contributions (Note 32.I.j)		(12,165	)
Non-controlling interest (Note 32.I.l)		5,564		—		—
Other		175		175		175

Net (loss) income under US GAAP attributable to EDENOR shareholders’		(289,812	)	(35,732	)	73,081

Non-controlling interest under US GAAP (Note 32.I.l)		12,676		—		—

Net (loss) income under US GAAP		(277,136	)	(35,732	)	73,081

(*) It corresponds to the balances at December 31, 2010 and 2009 included in the financial statements as of December 31, 2011, including the recognition of the permanent difference related to the inflation adjustment over property, plant & equipment as a deferred tax liability, which under Argentine GAAP was required to be recognized in connection with the adoption of IFRS. See further explanation in note 3.m).

The reconciliation to conform shareholders’ equity amounts under Argentine GAAP to Equity under US GAAP is as follows:

	As of December 31,
	2011			2010 (*)

Shareholders’ equity under Argentine GAAP		1,314,518			1,749,915

Acquisition of subsidiaries (Note 32.I.a)		434,959			—
Additional losses on assets held for sale and from sale of subsidiaries (Note 32.I.b)		(172,838	)		—
Reversal of negative goodwill (Note 32.I.c)		(12,340	)		—
Transaction cost (Note 32.I.d)		(4,269	)		—
Deferred income tax (Note 32.II.a)		(118,346	)		(9,594	)
Interest capitalized – net (Note 32.II.b)		64,305			69,399
Trouble debt restructuring and repurchases of debt (Note 32.II.c)		—			(27,275	)
Pension Plan (Note 32.II.d)		(29,120	)		(10,136	)
Customers contributions (Note 32.I.j)		(12,165	)		—
Acquisition of additional non-controlling interest (Note 32.I.k)		3,452			—
Non-controlling Interest (Note 32.I.l)		6,567			—
Other		(4,118	)		(4,293	)

Equity under US GAAP attributable to EDENOR shareholders’		1,470,605			1,768,016

Non-controlling interest under US GAAP (Note 32.I.l)		50,302			—

Equity in accordance with US GAAP		1,520,907			1,768,016

(*) It corresponds to the balances at December 31, 2010 included in the financial statements as of December 31, 2011, including a restatement due to the recognition of the permanent difference related to the inflation adjustment over property, plant & equipment, which under Argentine GAAP was required to be recognized in connection with the adoption of IFRS. See further explanation in note 3.m).

F-110

The changes in Equity under US GAAP as of December 31, 2011, 2010 and 2009 are as follows:

	For the year ended December 31,
	2011			2010			2009

Equity under US GAAP - Beginning balance		1,768,016			1,801,449			1,727,154

Net (loss) income for the year attributable to Edenor shareholders’		(289,812	)		(35,732	)		73,081
Additional paid-in capital		3,452			—			—
Other Comprehensive (loss) income - Pension Plan, net of tax and Investments in marketable securities, net of tax (Note 32.II.o)		(11,051	)		2,299			1,214
Non-controlling interest (Note 32.I.l )		50,302			—			—

Equity under US GAAP - Ending balance ((Note 32.I.m)		1,520,907			1,768,016			1,801,449

II.	Additional disclosure requirements

a)	Deferred income taxes

The benefit for income taxes included in the condensed statement of income and accounted for in accordance with US GAAP is as follows:

	As of December 31,
	2011			2010(*)			2009(*)
Income tax under Argentine GAAP:
Current income tax		(40,266	)		(16,235	)		(95,570	)
Other adjustments		1,442			—			1,636
Deferred income tax - benefit		16,376			42,349			41,603
Total income tax benefit (expense) under Argentine GAAP		(22,448	)		26,114			(52,331	)

US GAAP adjustments:

Interest capitalized		1,783			1,783			1,783
Deferred income tax effect on the adjustment to present value of the notes		—			(1,469	)		(1,835	)
Bargain purchase		(152,236	)		—			—
Deferred income tax effect on troubled debt restructuring and repurchases of debt		(9,546	)		(9,893	)		(15,645	)
Accruals - ENRE Penalties		—			—			(24,991	)
Investments in marketable securities		154			2,554			(116	)
Additional loss on assets held for sale		40,407
Customers contributions		4,258
Others		(61	)		101			(79	)
Discontinued operations and Additional loss on assets held for sale 1		(22,952	)		—			—

US GAAP adjustments		(138,193	)		(6,924	)		(40,883	)

Increase of the allowances for impairment of value of deferred tax assets		—			—			—

US GAAP adjustments including increase of the allowance for impairment of value of deferred tax assets		(138,193	)		(6,924	)		(40,883	)

Income tax (expense) benefit from continuing operations under US GAAP		(160,641	)		19,190			(93,214	)

(*) It corresponds to the balances at December 31, 2010 included in the financial statements as of December 31, 2011, including a restatement due to the recognition of the permanent difference related to the inflation adjustment over property, plant & equipment, which under Argentine GAAP was required to be recognized in connection with the adoption of IFRS. See further explanation in note 3.m).

1. It corresponds to the reclassification of the income tax related to the discontinued operations and loss from assets held for sale, to the single line item below net loss from continuing operations.

	As of December 31,
	2011			2010		2009

Decrease (Increase) of the valuation allowance of value of deferred tax assets under Argentine GAAP		(176,003	)		—		—
US GAAP adjustments		—			—		—
Variation of the valuation allowance under US GAAP		(176,003	)		—		—

F-111

Deferred tax assets (liabilities) as of December 31, 2011 are summarized as follows:

	As of December 31, 2011
	Argentine GAAP balance			US GAAP adjustment			US GAAP balance

Deferred tax assets
Tax losses carry forward		169,477			—			169,477
Accruals		198,180			11,633			209,813
Other non-current assets		40,650			—			40,650
Differences in basis in basis relating to purchase accounting		—			24,557			24,557
Additional loss on assets held for sale		—			40,407			40,407
Customers contributions’		—			4,258			4,258
Others		6,390			—			6,390
Total deferred tax assets		414,697			80,855			495,552

Allowance for impairment of value of differed tax assets		(176,003	)		—			(176,003	)
Total deferred tax assets, net		238,694			80,855			319,549

Deferred tax liabilities
PP&E and others		(518,462	)		(180,962	)		(699,424	)
Total deferred tax liabilities		(518,462	)		(180,962	)		(699,424	)

Total net deferred tax assets (liabilities)		(279,768	)		(100,107	)		(379,875	)

1. It corresponds to the reclassification of the income tax related to the discontinued operations, to the single line item below net loss form continuing operations.

F-112

Deferred tax assets (liabilities) as of December 31, 2010 are summarized as follows:

	As of December 31, 2010
	Argentine GAAP balance (*)			US GAAP adjustment			US GAAP balance

Deferred tax assets
Tax losses carry forward		11,586			—			11,586
Accruals		175,143			5,051			180,194
Troubled debt restructuring and repurchases of debt		—			3,335			3,335
Others		442			—			442
Total deferred tax assets, net		187,171			8,386			195,557

Deferred tax liabilities
PP&E and others		(440,988	)		(17,980	)		(458,968	)
Total deferred tax liabilities		(440,988	)		(17,980	)		(458,968	)

Total net deferred tax assets (liabilities)		(253,817	)		(9,594	)		(263,411	)

(*) It corresponds to the balances at December 31, 2010 included in the financial statements as of December 31, 2011, including a restatement due to the recognition of the permanent difference related to the inflation adjustment over property, plant & equipment, which under Argentine GAAP was required to be recognized in connection with the adoption of IFRS. See further explanation in note 3.m).

A reconciliation of the Argentine Statutory Income Tax rate to the Company’s effective tax rate on net (loss) income is as follows:

	As of December 31,
	2011			2010			2009

Income tax calculated at tax rate on net income from continued operations before taxes under US GAAP		(7,327	)		19,222			(58,203	)

Permanent differences:
Effect of Trust consolidation		—			—			(17,155	)
Loss from sale of subsidiary		24,549			—			—
Other non-deductible expenses		(1,860	)		(32	)		(17,856	)
Subtotal		15,362			19,190			(93,214	)
Variation of the valuation allowance under US GAAP		(176,003	)		—			—
Income tax (expense) benefit from continuing operations under US GAAP		(160,641	)		19,190			(93,214	)

F-113

US GAAP deferred tax assets (liabilities) as of December 31, 2011 and 2010 breakdowns are summarized below:

	As of December 31, 2011
	Total			Current			Non Current

Total deferred tax assets		495,552			1,907			493,645
Total deferred tax liabilities		(699,424	)		(61,385	)		(638,039	)
Allowance for impairment of value of deferred tax assets		(176,003	)		—			(176,003	)
Total net deferred tax liabilities		(379,875	)		(59,478	)		(320,397	)

	As of December 31, 2010
	Total			Current			Non Current

Total deferred tax assets, net		195,557			1,622			193,935
Total deferred tax liabilities		(458,968	)		(30,888	)		(428,080	)
Total net deferred tax liabilities		(263,411	)		(29,266	)		(234,145	)

b)	Interest capitalized – net

In accordance with ASC topic 835, interests on loans related to works in progress has been capitalized on the qualifying asset (assets that require an extended period of time to acquire or produce), during the term of construction until they were in condition to be used, as follows:

	As of December 31,
	2011		2010		2009
Interest expense incurred under US GAAP		184,476		103,782		139,193
Interest capitalized under US GAAP		16.132		19,522		24,966

Effect on US GAAP adjustment in net income is as follows:

	For the year ended December 31,
	2011			2010			2009
Depreciation of interest capitalized (Note 32.I.f)		(5,095	)		(5,095	)		(5,095	)

F-114

Effect on US GAAP adjustment on shareholders’ equity is a follows:

	As of December 31
	2011			2010
Interest capitalized		125,295			125,295
Depreciation on interest capitalized		(60,990	)		(55,896	)
Interest capitalized – net (Note 32.I.f)		64,305			69,399

c)	Troubled debt restructuring and repurchases of debt

The reconciliation between consolidated financial debt under US GAAP and Argentine GAAP as of December 31, 2011 and 2010 is as follows:

	As of December 31,
	2011			2010

Financial debt (current and non current) under Argentine GAAP		1,248,907			1,089,221

Waiver of principal		55,314			55,314
Waiver of unpaid accrued interest		77,658			77,658
Waiver of unpaid accrued penalties		65,726			65,726
Adjustment to present value of the notes		—			17,745
Interest expense		149,617			116,733

Loss from the purchase and redemption of notes 2016 during 2007		(10,228	)		(10,228	)
Gain from the purchase and redemption of notes 2016 during 2008		55,185			55,185
Gain from the purchase and redemption of notes 2016 during 2009		46,182			46,182
Loss from the purchase and redemption of notes 2016 during 2010		(743	)		(743	)
Loss from the purchase and redemption of notes 2016 during 2011		(25,260	)		—
Adjustment to present value of purchased and redeemed notes 2016 during 2007		(8,632	)		(8,632	)
Adjustment to present value of purchased and redeemed notes 2016 during 2008		8,980			8,980
Adjustment to present value of purchased and redeemed notes 2016 during 2009		7,932			7,932
Adjustment to present value of purchased and redeemed notes 2016 during 2010		1,601			1,601
Adjustment to present value of purchased and redeemed notes 2016 during 2011		25,757			—
Gain on debt restructuring		(66,803	)		(66,803	)
Gain on early extinguishment of debt		(382,286	)		(339,375	)

Financial debt (current and non current) under US GAAP		1,248,907			1,116,495

Total impact in Equity under US GAAP (Note 32.I.g)		—			27,275

Effects of US GAAP adjustments in net income under Argentine GAAP are as follows:

	For the year ended December 31,
	2011			2010			2009
Loss on early extinguishment of debt		42,911			41,570			150,269
Interest expense and exchange differences		(32,884	)		(12,447	)		(51,454	)
Adjustment to present value of notes		17,745			4,198			5,243
Adjustment to present value of purchased and redeemed notes due in 2016		(25,757	)		(1,601	)		(7,932	)
Loss (Gain) from the purchase and redemption of notes due in 2016		25,260			743			(46,182	)
Total impact in net (loss) income (Note 32.I.g)		27,275			32,463			49,944

F-115

d)	Pension plan

As indicated in Note 3.o, the Company has a pension plan for benefits to personnel (employee pension plan). Employee pension costs are recognized in accordance with Compensation-Retirement Benefits topic of the FASB Accounting Standards Codification, ASC topic 715. This topic requires the use of an actuarial method for determining defined benefit pension costs and provides for the deferral of actuarial gains and losses (in excess of a specific corridor) that result from changes in assumptions or actual experience differing from assumed. ASC topic 715 also provides for the prospective amortization of costs related to changes in the benefit plan, as well as the obligation resulting from transition and requires disclosure of the components of periodic pension costs and the funded status of pension plans. In addition, ASC topic 715 requires the immediate recognition of deferred pension costs when some or all of the following conditions are met:

(a) pension obligations are settled;

(b) defined benefits are no longer earned under the plan and the plan is not replaced by other defined benefit plan;

(d) employees are terminated or the plan ceases to exist.

The Company has a pension plan covering substantially all of its employees under collective bargain agreement mentioned in Note 3.o. ASC topic 715 has been applied from and after January 1, 2003. However, amortization of the net transition obligation existing at January 1, 1993 has been computed retroactively as if it had been established on January 1, 1989, which is the date that ASC topic 715 first became effective for non−US pension funds.

In accordance with US GAAP, actual results that differ from Company’s assumptions are accumulated and amortized over future periods and generally affect Company’s recognized expenses and recorded obligations in such future periods. While we believe that our assumptions are appropriate, significant differences in actual results or significant changes in Company’s assumptions may materially affect our pension and other postretirement obligations.

During 2005, two new collective bargain agreements were signed with the Sindicato de Luz y Fuerza de la Capital Federal (Electric Light and Power Labor Union – City of Buenos Aires) and the Asociación de Personal Superior de Empresas de Energía (Association of Supervisory Personnel of Energy Companies) expiring December 31, 2007 and October 31, 2007, respectively. On November 17, 2006 and October 5, 2006 the agreements signed with the Electric Light and Power Labor Union – City of Buenos Aires and the Association of Supervisory Personnel of Energy Companies have been ratified by the Ministry of Labor and Social Security, respectively.

As of the date of issuance of this annual report, meetings aimed at negotiating the renewal terms of both collective bargaining agreements, are being held with the above-mentioned unions.

The Company applies ASC section 715-30-25 and the disclosures requirements of ASC section 715-20-50. Under provisions of this topic, the Company fully recognized the underfunded status of defined-benefit pension and postretirement plans as a liability in the financial statements reducing the Company’s shareholders’ equity through Accumulated OCI account. Unrecognized actuarial losses and gains are recognized in the statements of income during the expected average remaining working lives of the employees participating in the plans and the live expectancy of retired employees.

F-116

The components of net periodic benefit cost under Argentina GAAP and US GAAP for 2011, 2010 and 2009 are as follows:

	As of December 31,
	2011			2010		2009
Components of net year benefit cost
Service cost		3,211			1,828		1,608
Interest cost		12,436			7,825		4,843
Recognized net actuarial loss		(1,732	)		814		1,314
Net year benefit cost		13,915			10,467		7,765

The changes in benefit obligations for the years ended December 31, 2011 and 2010 are as follows:

	As of December 31,
	2011			2010
Benefit obligation - beginning of year		41,492			31,195
Employee benefit plan – acquisition of subsidiaries		31,663			—
Service cost		3,211			1,828
Interest cost		12,436			7,825
Actuarial loss		13,764			4,572
Benefits paid to participants		(7,737	)		(3,928	)
Benefit obligation – end of year		94,829			41,492

As of December 31, 2011, 2010 and 2009, the Company recognized net of tax charges of 12,340, and 2,445 and a net gain of 1,430, respectively, as adjustment to accumulated other comprehensive gain/loss corresponding to the net actuarial gain/loss for the year.

F-117

The following table shows changes in accumulated other comprehensive gain/loss for the years ended December 31, 2011, 2010 and 2009:

	Net of tax			Tax effect			Gross amount

Balance as of January 31, 2009		5,573			(3,002	)		8,575
Net actuarial loss (gain) for the year 2009		(1,430	)		770			(2,200	)
Balance as of December 31, 2009		4,143			(2,232	)		6,375
Net actuarial loss (gain) for the year 2010		2,445			(1,316	)		3,761
Balance as of December 31, 2010		6,588			(3,548	)		10,136
Net actuarial loss (gain) for the year 2011		12,340			(6,644	)		18,984
Balance as of December 31, 2011		18,928			(10,192	)		29,120

The following yearly pension benefits payments are expected to be made:

2012			18,401
2013			10,719
2014			11,690
2015			12,077
2016			11,831
2017-2021			55,334

The components of the projected net periodic pension benefit costs for 2012 are as follows:

Service cost	3,211
Interest cost	12,436
Amortization of net actuarial loss	(1,732	)
Net year benefit cost	13,915

The following table shows the effect of a 1% change in discount rate on our projected benefit obligation for the periods indicated:

	As of December 31,
	2011		2010		2009
Projected benefit obligation		94,829		41,492		31,195
Effect of a one-percentage-point increase		90,172		39,470		29,676
Effect of a one-percentage-point decrease		99,904		43,804		32,935

F-118

Assumptions

	2011	2010	2009
Weighted - discount rate	30,0%	24.0%	25.0%
Weighted - salary increase	23.0%	15.0%	15.0%
Weighted - long term inflation	22.0%	18.0%	11.5%

Actuarial Method: Projected Unit Credit Method

The Company does not make plan contributions or maintain separate assets to fund the benefits at retirement. The net periodic pension costs are recognized as employees render the services necessary to earn pension benefits.

e)	Trust Consolidation

On September 30, 2008, the Company and Macro Bank Limited entered into an irrevocable and discretionary Trust agreement (thereafter “the Trust”).

Under Argentina GAAP, the Trust was not consolidated with the Company´s financial statements but included as a non current investment and valued at the fair value of the outstanding financial instruments as of December 31, 2008.

Under US GAAP, the Trust represented a Variable Interest Entity (VIE) and as such had to be consolidated in the Company’s financial statements.

As of December 31, 2008, the outstanding financial assets held by the Trust and related accrued interests were as follows:

	Amounts in thousands of US$		Accrued interests in thousands of US$
Cash		1,179		—
Clarín Group Notes		2,145		—
Edenor Notes due on 2017		10,030		556
Edenor Notes due on 2017		407		23

Under US GAAP, Transfer and Servicing topic of the FASB Accounting Standards Codification states that the reacquisition by the debtor of its outstanding debt securities whether the securities are canceled or held as so-called treasury bonds constitutes an extinguishment of the liability. Therefore, the Company considered that the repurchase made by the financial Trust should be treated as treasury bonds and, a gain on the transaction was recognized together with the elimination of the related short-term investment and liability recorded under Argentine GAAP.

On September 3, 2009, the discretionary trust was dissolved and the trust property was liquidated and transferred to the Company.

F-119

Basic and diluted (losses) earnings per share

As mentioned in Note 3.s, under Argentine GAAP, the Company is required to disclose earnings per share information in accordance with FACPCE TR 18 for all the years presented.

Under US GAAP, basic and diluted earnings per share are presented in conformity with topic ASC 260 for all years presented. Pursuant to this topic, ordinary shares and convertible preferred shares issued or granted for nominal consideration prior to the anticipated effective date of an initial public offering must be included in the calculation of basic and diluted earnings per share as if they had been outstanding for all periods presented. To date, the Company has not had any issuance or grants for nominal consideration.

The following tables set forth the computation of basic and diluted (loss) earnings per common share under US GAAP for the years presented:

	For the years ended December 31,
(Loss) Earnings per share from continuing operations	2011			2010			2009

Numerator:
Net (loss) income for the year from continuing operations attributable to Edenor's shareholders		(145,531	)		(35,732	)		73,081

Denominator:
Weighted average number of shares used in basic EPS		897,042,600			897,042,600			897,042,600

(Loss) Earnings per share from continuing operations – basic and diluted		(0.162	)		(0.040	)		0.081

	For the years ended December 31,
(Loss) per share from discontuing operations		2011		2010	2009

Numerator:
Net loss for the year from discontinuing operations attributable to Edenor's shareholders		(144,281	)	—	—

Denominator:
Weighted average number of shares used in basic EPS		897,042,600		897,042,600	897,042,600

(Loss) per share from discontinuing operations – basic and diluted		(0.161	)	—	—

There are no potential dilutive equity shares.

Segment information

US GAAP requires reporting of selected information about operating segments in financial reports to its shareholders. Operating segments are components of a company about which separate financial information is available that is regularly evaluated by the Chief Operating Decision Maker(s) in deciding how to allocate resources and assess performance.

F-120

Disclosure requirements under US GAAP do not differ from those required under Argentine GAAP (see further information in Note 6), except for the disclosure of discontinued operations. However, discontinued operations by segment correspond to Emdersa segment, which has been shown above, in the statement of operations within discontinued operations.

Under US GAAP, for the year ended December 31, 2011, the segment of EMDERSA has been discontinued, and it has been classified as held for sale. As such, the statement of operations under US GAAP includes: i) Net loss for the year from discontinued operations attributable to Edenor's shareholders' amounted to 74,141, and ii) Net gain for the year from discontinued operations attributable to non-controlling shareholders' amounted to 6,851.

h)	Discontinued operations

The Company’s Management decided to divest in certain assets, as such and complying with the requirements of ASC 205-20 it classified the assets of EMDERSA and EMDERSA Holding as assets and liabilities (separately) held for sale. See further information in note 25.

Under Argentine GAAP the Company classified assets and liabilities held for sale, related to EMDERSA and EMDERSA Holding companies, in a single line item within current assets. Under US GAAP assets and liabilities held for sale should be disclosed separately in the face of the balance sheet (see Note 32.II.k (condensed balance sheet). Moreover, under Argentine GAAP, discontinued operations have been consolidated in the statement of operations on a line-by-line basis and a note to the financial statements has been included to disclose the related statement of income of such discontinued operations. Under US GAAP discontinued operations and continuing operations should be separately disclosed in the statement of operations(see Note 32.II.k (condensed statements of operations).

i)	Cash flows information

Under Argentine GAAP, the Company is required to present the consolidated statements of cash flows in the primary consolidated financial statements in accordance with TR 9, as amended. Guidance set forth in TR 9 (as amended) is similar to the guidelines set forth in ASC 230 “Statement of Cash Flows”.

As described in Note 8, the Company considers all highly liquid investments to be cash equivalents.

Under US GAAP, following Topic 230 “Statement of Cash Flows” (ASC 230), the Company classified its investments in Corporate Debt Securities as investing activities. As their maturity occurs beyond 3 months, the Corporate Debt Securities are not included as part of cash equivalents.

Under Argentine GAAP, the Company classified as financing activities purchases and sales of debt securites, other than cash equivalents.

Under US GAAP, following ASC 230 and Topic ASC 320 “Investments - Debt and Equity Securities”, the Company classified those transactions as investing activities.

F-121

The following table presents the reconciliation of the condensed statements of cash flows between Argentine GAAP and US GAAP:

	For the years ended as of December 31,
Reconciliation of cash flows under Argentine GAAP and US GAAP	2011			2010			2009

Net cash flow provided by operating activities under Argentine GAAP		511,751			526,928			667,977
Reclasification from operating activities to investing activities:
Effect of exchange rate changes on cash and cash equivalents		(3,283	)		(10,119	)		(7,021	)
Net cash flow provided by operating activities under US GAAP		508,468			516,809			660,956

Net cash flow used in investing activities under Argentine GAAP		(975,216	)		(381,335	)		(404,165	)
Decrease (Increase) in current and non-current investments		—			—			13,614
Corporate debt securities classified as cash equivalents under Argentina GAAP		428,704			(382,312	)		(48,524	)
Net cash flow used in investing activities under US GAAP		(546,512	)		(763,647	)		(439,075	)

Net cash flow used in financing activities under Argentine GAAP		(80,387	)		302,878			(161,839	)
(Decrease) Increase in current and non-current investments		—			—			(13,614	)
Net cash flow used in provided by financing activities under US GAAP		(80,387	)		302,878			(175,453	)

Net (decrease) increase in cash and cash equivalents under US GAAP		(115,148	)		66,159			53,449

Effect of exchange rate changes on cash and cash equivalents		3,283			10,119			7,021

Net increase in cash and cash equivalents under US GAAP after effect of exchange rate changes on cash and cash equivalents		(118,431	)		56,040			46,428


Cash and cash equivalents at the beginning of the year		246,007			179,848			126,399
Cash and cash equivalents at the end of the year		130,859			246,007			179,848

	2011			2010			2009

Cash and cash equivalents under Argentine GAAP (Note 19)		132,991			676,843			228,372
Corporate debt securities – Not qualified as cash equivalent under US GAAP (Note 32.I.h)		(2,132	)		(430,836	)		(48,524	)
Cash and cash equivalents under US GAAP		130,859			246,007			179,848

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j)	Fair value measurements

The Company applies ASC Topic 820, Fair Value Measurements (“ASC Topic 820”), which defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The standard outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. Under US GAAP, certain assets and liabilities must be measured at fair value, and ASC Topic 820 details the disclosures that are required for items measured at fair value.

The Company has various financial instruments that must be measured under ASC Topic 820 including: certain money market funds, bonds, marketable securities; and derivatives. None of its current non-financial assets or non-financial liabilities must be measured at fair value on a recurring basis. The Company measures its financial assets and liabilities using inputs from the following three levels of the fair value hierarchy. The three levels are as follows:

	•	Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities accessible at the measurement date.

	•	Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs)

	•	Level 3 includes unobservable inputs that reflect the Company’s assumptions about the assumptions that market participants would use in pricing the asset or liability. The Company develops these inputs based on the best information available, including its own data.

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In accordance with the fair value hierarchy, the following table shows the fair value as of year-end 2011, of those financial assets that must be measured at fair value and were classified as “Investments” and “Loans”:

	Fair value measurements as of December 31, 2011
Description	Balance as of December 31, 2011		Level 1		Level 2		Level 3
Assets
Money market funds		58,903		58,903		—		—
Corporate Debt Securities		2,132		2,132		—		—
Derivatives		1,316				1,316

	Fair value measurements as of December 31, 2010
Description	Balance as of December 31, 2010		Level 1		Level 2		Level 3
Assets
Money market funds		117,458		117,458		—		—
Equity Securities		102,415		102,415
Corporate Debt Securities		430,836		430,836		—		—
Liabilities
Derivatives		7,253				7,253

Company’s financial assets included in Level 1 are valued using market prices on active markets. Level 1 instrument valuations are obtained from real-time quotes for transactions in active exchange markets involving identical assets. Derivative instruments included in Level 2 are valued at fair value obtained from readily-available pricing sources for comparable instruments. As of December 31, 2011 and 2010, the Company did not have any assets or liabilities without observable market values that would require a high level of judgment to determine fair value (level 3).

The unrealized net gains on short-term investments are reported as a component of other comprehensive income.

As of December 31, 2011, the carrying value of the Company’s cash and cash equivalents approximated their fair value which was held primarily in bank deposits and there were no financial liabilities measured at fair value. For the years ended December 31, 2011 and 2010, the Company held no direct investments in auction rate securities, collateralized debt obligations, structured investment vehicles or mortgage-backed securities.

k)	Consolidated Statement of Income classification differences between Argentine GAAP and US GAAP

Net Sales

Under Argentine GAAP, penalties have been deducted from sales. For US GAAP purposes, penalties are included as transmission and distribution expenses and selling expenses (amounting to 81,058, 80,006 and 58,500 for the years ended December 31, 2011, 2010 and 2009).

During the year ended December 31, 2009, the Addendum to the New Framework Agreement entered into by the Government of the Province of Buenos Aires and the Company, was ratified by Decree No. 732 published in the Official Gazette of the Province of Buenos Aires. As a consequence, the allowance for doubtful accounts was partially recovered under Argentina GAAP. Under US GAAP, these sales are recognized since the conditions required are met (amounting 26,956).

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Under Argentine GAAP, the electricity distributed to shantytowns was recorded as sales. Under US GAAP the conditions to recognize revenue are not met, thus, such sales have been eliminated in the Consolidated Statement of Operations (amounting 28,600).

As a result of these differences, net sales under US GAAP would have been 2,853,229, 2,253,650 and 2,163,316 for the years ended December 31, 2011, 2010 and 2009, respectively.

Gross margin

Under Argentine GAAP, transmission and distribution expenses have been included within operating expenses, but excluded from gross margin calculation. Under US GAAP, such expenses have been included within gross margin calculation.

Under US GAAP, interest capitalization adjustment amounting to 5,095 has been included as Transmission and Distribution expenses.

Furthermore, certain other income and expenses such as acrrued litigation, voluntary retirements, and expenses from technical services, amoung others (amounting to 18,024) have been reclassified into Transmission and Distribution expenses in order to enhace disclosure.

As a result of these differences, gross margin under US GAAP would have been 393,859, 452,125 and 535,970 for the years ended December 31, 2011, 2010 and 2009, respectively.

Net operating income

Under Argentine GAAP, certain operating expenses such as accrued litigation, voluntary retirements, expenses from technical services and commissions on municipal taxes collection, have been included as other expenses - net, excluded from operating income. Under US GAAP, such expenses have been included as operating expenses - net.

Under Argentine GAAP the excess of fair value of net assets acquired over consideration paid and non-controlling interest has been considered as negative goodwill and amortized amounting to 12,340. Under US GAAP, these acquisitions gave rise to a bargain purchase amounting to 434,959.

Under Argentine GAAP, loss on assets held for sale includes the difference between carrying amount and fair value less cost to sale of EGSSA (subsidiary of EMDERSA Group), company for which Pampa Energía has offered to buy from Edenor. Under US GAAP, considering that this sale transaction when consummated would be a common control transaction, such loss has been classified as an impairment loss over EGSSA.

As a result of these differences, net operating income (expense) under US GAAP would have been 187,190, 79,746 and 241,295 for the years ended December 31, 2011, 2010 and 2009, respectively.

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Financial income (expense), net

Under Argentine GAAP, the adjustments to present value of the retroactive tariff increase and the Payment Plan Agreement with the Province of Buenos Aires have been included in a separate line below Financial income (expense) and holding gains (losses). Under US GAAP, the amortization of the discount derived from the adjustment to present value of the retroactive tariff increase has been reclassified to interest gain, within Financial income (expense), net.

In addition, under US GAAP, Financial income (expense), net includes the adjustment of Troubled Debt Restructuring and Repurchases of Debt described in Note 32.I.g), the reversal of the gain obtained by the Trust under Argentine GAAP as described in Note 32.I.i) and the adjustment related to unrealized gain (loss) on available-for-sale investments described in Note 32.I.h).

As a result of these disclosure differences, Financial (expense) income, net under US GAAP would have been losses of 236,395, 134,668 and 75,000 for the years ended December 31, 2011, 2010 and 2009, respectively.

Under US GAAP, the results from discontinued operations (EMDERSA and EMDERSA HOLDING) amounting to 42,693, have been deducted from the Consolidated Statement of Operations.

The condensed consolidated statements of operations for the years ended December 31, 2011, 2010 and 2009 under US GAAP are as follows:

	For the year ended December 31,
	2011			2010			2009

Net sales / Services revenues		2,853,219			2,253,650			2,163,316
Electric power purchases		(1,341,591	)		(1,069,747	)		(1,003,362	)
Transmission and Distribution Expenses		(1,117,769	)		(731,778	)		(623,984	)
Gross margin		393,859			452,125			535,970
Operating expenses, net		(136,529	)		(372,379	)		(294,675	)
Net operating (loss) income		257,330			79,746			241,295
Financial income		61,980			88,942			229,210
Financial expenses		(298,375	)		(223,610	)		(304,210	)
Net (loss) income from continued operations before income tax and non-controlling interest		20,935			(54,922	)		166,295
Income tax (expense) / benefit from continued operations		(160,641	)		19,190			(93,214	)
Less: Net gain from continued operations attributable to non-controlling interest		5,825			—			—
Net (loss) gain from continued operations attributable to Edenor shareholders’		(145,531	)		(35,732	)		73,081
Loss from discontinued operations before income tax and non-controlling interest		(160,382	)		—			—
Income tax from discontinued operations		22,952			—			—
Loss on discontinued operations attributable to Edenor shareholders’		(144,281	)		—			—
Less: Net gain on discontinued operations attributable to non-controlling interest		6,851			—			—
Net (loss) income under US GAAP attributable to EDENOR shareholders’		(289,812	)		(35,732	)		73,081
Net gain under US GAAP attributable to non-controlling interest		12,676			—			—
(Loss) Earning per share from continuing operations – Basic and diluted		(0.162	)		(0.040	)		0.081
(Loss) Earning per share from discontinuing operations – Basic and diluted		(0.161	)		—			—

The consolidated condensed balance sheets under US GAAP as of December 31, 2011 and 2010 are as follows:

	As of December 31,
	2011		2010

Asset group held for sale		1,138,757		—
Other current assets		935,489		1,155,425
Property, plant and equipment, net		4,798,446		3,754,590
Other non-current assets (Note 32.I.a)		223,710		274,599
Liability group held for sale		922,226		—
Other current liabilities		1,328,582		818,099
Non-current liabilities (Note 32.I.a)		3,324,687		2,598,499
Equity (Note 32.I.a)		1,520,907		1,768,016

Summary of Consolidated Equity in accordance with US GAAP	For the year ended December 31,
	2011			2010

Common stock		1,902,944			1,902,944
Treasury stock		(6,130	)		(6,130	)
Additional paid-in capital		28,422			24,970
Legal Reserve		64,008			64,008
Accumulated deficit (Note 32.I.a)		(208,023	)		(185,822	)
Net loss for the year attributable to Edenor shareholders’		(289,812	)		(35,732	)
Other Comprehensive Income		(11,051	)		2,299
Accumulated Other Comprehensive Income		(9,753	)		1,479
Non- Controlling Interest		50,302			—

Total Equity (Note 32.I.a)		1,520,907			1,768,016

l)	Valuation of Property, plant and equipment

Under Argentine GAAP, assets transferred through the privatization of SEGBA were valued at their fair value on the privatization date as described in Note 3.g.

F-126

Under US GAAP, following the accommodation allowed as published in the SEC International Reporting and Disclosure Issues in the Division of Corporation Finance as revised on November 1, 2004, when reliable fixed asset records are not available and cannot be reasonably produced, the registrant may use the opening fair value balances as its costs basis. Thereafter, the assets are reported in the usual manner with respect to depreciation and evaluation of impairment.

Based on the foregoing, there is no difference between US GAAP and Argentine GAAP.

Under Argentine GAAP the carrying value of a long-lived asset is considered impaired by the Company when its value in use or its net realizable value, whichever is greater, is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the greater of the value in use or the net realizable value. Value in use is determined by the expected cash flows from the assets discounted at a rate commensurate with the risk involved. Net realizable value is determined by the selling price of the assets less costs to sell. Under U.S. GAAP, the carrying value of a long-lived asset is considered impaired by the Company when the expected cash flows undiscounted and without interest, from such asset is separately identifiable and less than its carrying value. In that event, a loss would be recognized based on the amount by which the carrying value exceeds the fair market value of the long-lived asset. Fair market value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. However, the Company concluded that the carrying value of its long lived assets was not considered impairment under both Argentine GAAP and US GAAP.

m)	ASC 740 Income Taxes

ASC 740 defines the criteria an individual tax position must meet for any part of the benefit of such position to be recognized in the financial statements. This topic establishes “a more-likely-than-not” recognition threshold that must be met before a tax benefit can be recognized in the financial statements. The topic also provides guidance, among other things, on the measurement of the income tax benefit associated with uncertain tax positions, de-recognition, classification, interest and penalties and financial statement disclosures.

As it is required by this topic, the Company has reassessed whether the “more-likely-than-not” recognition threshold has been met before a tax benefit can be recognized and how much of a tax benefits to recognize in the financial statements. The adoption of the topic did not have an impact on the Company’s financial position. There were no unrecognized tax benefits as of December 31, 2010.

The company classifies interest and penalties, if any, in the statement of income under the line “Income tax expense”.

On April 27, 2009, the Company adhered to the income tax regularization plan established in Law No. 26,476. In accordance with the assessment of the tax regularization plan, the Company’s debt was settled at Ps. 12,122 plus interest to be accrued. During the year 2009, the Company paid for this concept an amount of 1,487 and the remaining balance of the Company’s debt totals 10,635. As a consequence of this tax regularization plan, the Company recognized a gain amounting to Ps. 23,341, net of legal fees amounting to Ps. 2.8 million.

F-127

n) Accounting for stock transferred by Argentine government to employees

Under Argentine GAAP, there are no specific rules governing the accounting to be followed by employers when a principal shareholder transfers shares to a company’s employees (Note 17).

Under US GAAP, the Company follows ASC 718 “Stock compensation”. The economic substance of a plan establish by the principal stockholders is substantially the same for the Company and the employee, whether the plan is adopted by the Company or a principal stockholder. Consequently, the Company should account for this type of plan when one is established or financed by a principal stockholder unless (1) the relationship between the stockholder and the company’s employee is one which would normally result in generosity, (2) the stockholder has an obligation to the employee which is completely unrelated to the latter’s employment, or (3) the company clearly does not benefit the transaction. The rationale established in this Interpretation has been applied to other situations in which a principal stockholder for the benefit of the company. ASC 225-10 requires any transaction undertaken by a company’s principal stockholder for the benefit of the company to be accounted for according to its substance and not its form. Under Topic ASC 718, compensation expense is based on the difference, if any, on the date of the grant, between the fair value of the Company’s stock and the exercise price. ASC 718-10 defines a “fair value” based method of accounting for an employee stock option or similar equity investment.

The Argentine Government agreed to establish a Share Ownership Plan, principally for the benefit of the former employees of SEGBA transferred to the Company. Under the terms of the plan, employees eligible to participate acquired the shares of the Company previously held by the Government for an amount significantly less than the market value of the shares on September 1, 1992 (“grant date”). The purchase price formula was originally established during the privatization.

Had the Company been required by SEC regulations to include reconciliation between Argentine GAAP and US GAAP for the fiscal year 1992, it would have included as a reconciling item a charge amounting to 6,653 in the Statement of Income. However, this charge represented a reclassification between equity accounts, and consequently, it had no impact on shareholders’ equity or cash flows determined under US GAAP. The charge was calculated based upon the difference between the estimated total price per share paid by EASA as of the grant date and the purchase price to be paid by eligible employees.

There have been no additional grants of stocks to employees since September 1, 1992.

o)	Comprehensive income

ASC 220, “Comprehensive Income” establishes guidelines for the reporting and display of comprehensive income and its components in a full set of general-purpose financial statements. Comprehensive income represents the change in shareholders’ equity of the Company during the year from transactions and other events and circumstances from non-owner sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners.

The following table summarizes the components of comprehensive (loss) income for the years ended December 31, 2011, 2010 and 2009:

	For the year ended December 31,
	2011			2010			2009


Net (loss) income under US GAAP		(289,812	)		(35,732	)		73,081

Other comprehensive (loss) income:

Unrealized gains and losses - Available for sale securities (net of a tax effect of 154, 2,554 loss and 116 benefit , for 2011, 2010 and 2009, respectively)		286			4,744			(216	)
Pension plan (net of a tax effect of 6,644, 1,316 benefit, and 770 loss, for 2011, 2010 and 2009, respectively)		(11,337	)		(2,445	)		1,430
Comprehensive (loss) income		(300,863	)		(33,433	)		74,295
Less: Other comprehensive income attributable to non-controlling interest		(1,003	)		—			—
Less: Comprehensive income attributable to non-controlling interest		11,673			—			—
Comprehensive (loss) income attributable to Edenor		(290,193	)		(33,433	)		74,295

F-128

The following table summarizes the components of accumulated other comprehensive (loss) income for the years ended December 31, 2011, 2010 and 2009:

	For the year ended December 31,
	2011			2010			2009

Accumulated gross unrealized gain on Available for sale securities		12,850			12,410			5,112
Accumulated estimated tax (loss) on Available for sale securities		(4,498	)		(4,343	)		(1,789	)
Accumulated gross pension plan		(28,117	)		(10,136	)		(4,143	)
Accumulated estimated tax benefit (loss) on pension plan		10,192			3,548			1,450

Accumulated other comprehensive (loss) income		(9,573	)		1,479			630

p)	Business combination

The following table summarizes the consideration paid for EMDERSA and AESEBA and the amounts of the assets acquired recognized at the acquisition date, as well as the fair value at the acquisition date of the non-controlling interest in EMDERSA and AESEBA.

The following breakdown summarizes the acquisitions of both EMDERSA and AESEBA:

Assets	2,366,312
Cash and banks	55,316
Investments	63,727
Trade receivables	246,234
Supplies	4,256
Property, plant and equipment	1,872,050
Others	124,729
Liabilities	(1,135,772	)
Trade accounts payable	(257,770	)
Loans	(451,199	)
Salaries and social security taxes	(69,411	)
Taxes	(176,305	)
Others	(181,087	)
Net assets acquired	1,156,765
Consideration paid	561,953
Non-controlling interest	159,853
Bargain purchase	434,959

F-129

The fair value of the non-controlling interest in both EMDERSA and AESEBA, have been estimated by applying an income approach. This fair value measurement is based on significant inputs that are not observable in the market and thus represents a Level 3 measurement as described in Section 820-10-35.

q)	Proforma (unaudited)

The amounts of EMDERSA and AESEBA's revenues and earnings included in EDENOR's Consolidated Statement of Operations for the year ended December 31, 2011, and the revenue and earnings of the combined entity had the acquisition date been January 1, 2011, or January 1, 2010, are as follows.

	For the year ended December 31,
	2011			2010
Net Sales / Services revenues		3,279,157			2,720,891
Net income (loss)		(354,879	)		233,919

r)	Recently issued accounting pronouncements

In May 2011, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2011-04, "Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs." This update clarifies the application of certain existing fair value measurement guidance and expands the disclosures for fair value measurements that are estimated using significant unobservable (Level 3) inputs. This update is effective on a prospective basis for the Company's annual and interim reporting periods beginning on January 1, 2012. The Company does not expect that adoption of this standard will have a material impact on its consolidated financial statements.

In June 2011, the FASB issued ASU No. 2011-05, "Presentation of Comprehensive Income." ASU No. 2011-05 provides guidance to improve the comparability, consistency and transparency of financial reporting and to increase the prominence of items reported in OCI. The FASB has eliminated the option to present OCI as part of the statement of changes in stockholders' equity. This ASU will require either the addition of OCI to the current statement of operations for one single statement of comprehensive income or the addition of a statement that presents total OCI. This ASU is effective for the interim or annual periods beginning after December 15, 2011.

This accounting standard is not expected to have a material effect on the Company's consolidated financial statements.

In December 2011, the FASB issued ASU No. 2011-11, "Disclosures about Offsetting Assets and Liabilities". The amendments in this Update affect all entities that have financial instruments and derivative instruments that are either (1) offset in accordance with either Section 210-20-45 or Section 815-10-45 or (2) subject to an enforceable master netting arrangement or similar agreement. The requirements amend the disclosure requirements on offsetting in Section 210-20-50. The amendments in this Update require an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. An entity is required to apply the amendments for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. An entity should provide the disclosures required by those amendments retrospectively for all comparative periods presented. This accounting standard is not expected to have a material effect on the Company's consolidated financial statements.

In December 2011, the FASB issued ASU No. 2011-12, "Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05". In June 2011, the FASB issued ASU No. 2011-05, "Comprehensive Income (Topic 220): Presentation of Comprehensive Income". Both ASU's are effective for annual reporting periods beginning after December 15, 2011. ASU 2011-05 eliminates the option to present the components of other comprehensive income as part of the statement of changes in equity. In addition, items of other comprehensive income that are reclassified to profit or loss are required to be presented separately on the face of the financial statements. This guidance is intended to increase the prominence of other comprehensive income in financial statements by requiring that such amounts be presented either in a single continuous statement of income and comprehensive income or separately in consecutive statements of income and comprehensive income. ASU 2011-12 defers the changes in ASU 2011-05 that pertain to how, when and where reclassification adjustments are presented. The Company's adoption of these standards is not expected to have a material impact on its consolidated financial statements.

F-130

Dated Signature Page of the 20-F.

SIGNATURE

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

Empresa Distribuidora y Comercializadora Norte Sociedad Anónima

By:	/s/ Leandro Montero
	Name:	Leandro Montero
	Title:	Chief Financial Officer

Date: April 26, 2012

SIGNATURE

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, as amended, the registrant hereby certifies that it meets all of the requirements for filing on Form 20-F/A and has duly caused and authorized the undersigned to sign this annual report on its behalf.

Empresa Distribuidora y Comercializadora Norte Sociedad Anónima

By:	/s/ Leandro Montero
	Name:	Leandro Montero
	Title:	Chief Financial Officer

Date: December 19, 2012.

Empresa Distribuidora y Comercializadora Norte Sociedad Anónima (EDN) 20-F/A2011 FY Annual report (foreign) (amended)