EN Enel Societa Azio

 

 

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 6-K

Report of Foreign Issuer

Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934

For the month of November 2007

Enel Società per Azioni

Viale Regina Margherita 137

00198, Rome

Italy

     Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F þ            Form 40-F o

     Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes o                      No þ

     If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):

 

 

Certain of the information included in this Report is forward looking and is subject to important risks and uncertainties that could cause actual results to differ materially. The Company’s core business includes the generation, distribution and sale of electricity and the distribution and sale of gas. The Company’s outlook is predominately based on its interpretation of what it considers to be the key economic factors affecting its businesses. Forward-looking statements with regard to the Company’s businesses involve a number of important factors that are subject to change, including: the many interrelated factors that affect customers’ demand, including general economic conditions, industry trends, and increased competition in each of the Company’s markets; the Company’s ability to implement successfully its cost reduction program; the Company’s ability to implement its strategy focused on its core energy business; future capital expenditure and investments; legislation, particularly that relating to the regulation of the markets for electricity and other public utility services, tariff regimes, the environment, trade and commerce and infrastructure development; the actions of competitors in various industries in which the Company competes; production difficulties, including capacity and supply constraints; labor relations; interest rates and currency exchange rates; political and civil unrest; and other risks and uncertainties.

The information included in this Report has been given to Commissione Nazionale per le Società e la Borsa (CONSOB), the Italian public authority regulating Italian capital markets, and/or to Borsa Italiana S.p.A. , the company owning and managing the Mercato Telematico Azionario, the Italian automated screen-based trading system on which the ordinary shares of Enel Società per Azioni are listed, or is otherwise furnished pursuant to General Instruction B to the General Instructions to Form 6-K.

Table of contents:

- Press release dated November 13, 2007;

- Press release dated November 14, 2007;

- Press release dated November 15, 2007;

- Report on the third quarter of 2007.

Press Release

NOT FOR RELEASE IN THE UNITED STATES, CANADA OR JAPAN

This announcement is not an offer for sale of the notes in the United States. The notes have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the Securities Act), or any U.S. state securities laws, and may not be offered or sold within the United States or to, or for the account or benefit of, any U.S. person (as defined in Regulation S under the Securities Act (Regulation S)) except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.

TWO BILLION EURO ENEL BOND ISSUE FOR ITALIAN RETAIL INVESTORS

•		Enel returns to the Italian retail investors Bond market with a new issue. This issue features a minimum lot of 5,000 Euro and a 7-year and one month maturity.
•		Investors can choose between fixed rate and floating rate, with the coupons easy to calculate.
•		The bonds are issued free of subscription fees and commissions. The bonds will be listed on the Mercato Telematico delle Obbligazioni (MOT), organised and managed by Borsa Italiana S.p.A., and will therefore be highly liquid, which will facilitate trading on the secondary market.
•		The offering may be increased up to 3 billion EURO in case of excess of demand.

Rome, November 13, 2007 – CONSOB (the Italian Stock Exchange Regulator) approved the prospectus relating to the offering and listing on the Mercato Telematico delle Obbligazioni (MOT), organised and managed by Borsa Italiana S.p.A., of a maximum aggregate amount of 2 billion euro Enel bonds reserved for Italian retail investors. Such amount may be increased up to 3 billion euro in case of excess of demand. The issue was approved by the Enel Board of Directors on July 26, 2007. The Company will mainly use the funds to partially reimburse the financing received for the joint public tender offer launched by Enel Energy Europe (an Enel subsidiary) and Acciona over the entire share capital of Endesa and recently closed successfully.

Offer period and minimum lot size

The offering will take place from November 19, 2007 to December 7, 2007, unless the offer is closed early, in the cases set out in the prospectus. Investors can subscribe for the fixed or floating-rate bonds with a minimum investment of 5,000 euro, equal to 5 bonds with a par value of 1,000 euro each.

Maturity, transparency and flexibility

Both fixed-rate and floating-rate bonds have a 7-year and one month maturity (due on January 2015). The principal will be repaid in full at maturity. Investors will be able to trade their bonds (in any nominal multiple of 1,000 euro) at any time following the offering period at market prices, since the bonds will be listed on the Mercato Telematico delle Obbligazioni (MOT), organised and managed by Borsa Italiana S.p.A, where performance can be tracked daily in specialised newspapers and on the Internet.

Commissions and tax treatment

Subscribers will not be charged of any subscription fees or commissions. The coupon amount relating to the bonds is intended to be gross of any applicable tax due under Italian taxation laws applicable at the time of payment .The current substitutive tax rate applicable to bond interest is equal to 12.5%.

Fixed-rate bonds

Interest will be paid to the bondholders annually in arrears, except for the first interest period, whose coupon will be paid after one year and one month. The coupon amount on the fixed-rate bonds (ENELTF2007-2015) will be announced within 5 days following the offer period by means of a notice published on a financial newspaper with nationwide distribution and calculated as the sum of the linear interpolation of the 7-year mid swap rate and the 8-year mid swap rate at the end of the offer period and an additional spread to be defined at the end of such period. This spread will be included in a range of 40 and 90 basis points.

During the first six months of 2007, the 7-year mid swap rate ranged from a low of 4.0801% to high of 4.8788%; the 8-year mid swap rate ranged from a low of 4.1030% to high of 4.8985% (Source: Bloomberg).

Floating-rate bonds

Interest will be paid to the bondholders semi-annually in arrears, except for the first interest period, whose coupon will be paid after seven months. For the entire life of the floating-rate bonds (ENELTV2007-2015), the coupon amount will be calculated as the sum of the 6-month EURIBOR (or the 7-month EURIBOR for the first interest period only) and an additional spread, which will be included in a range of 40 and 90 basis points, to be determined at the end of the offer period. Interest will be calculated on the basis of the actual number of days in the interest period. The spread will be announced within 5 days following the offering period by means of a notice published on a financial newspaper with nationwide distribution.

During the first six months of 2007, the 6-month EURIBOR rate ranged from a low of 3.857% to high of 4.315% (Source: Bloomberg).

Underwriting and placement syndicate

Enel has appointed Banca IMI (Intesa Sanpaolo Group) and Bayerische Hypo- und Vereinsbank AG, Milan Branch (UniCredit) (UniCredit Group) as lead managers and offering coordinators. The bonds will be placed by a placement and guarantee syndicate coordinated and directed by Banca IMI e UniCredit and composed of Banca Akros S.p.A., BNP Paribas, Centrobanca S.p.A., Dexia Crediop S.p.A. and MPS Capital Services Banca per le Imprese S.p.A., as well as a list of other distributors which will be filed with CONSOB, deposited at the registered office of the Company and published on “Il Sole 24 Ore” or “MF” or another financial newspaper with nationwide distribution within the first day prior to the beginning of the offering period. Such a notice will also specify the distributors which will place the bonds to the public at large on-line.

Press Release

ENEL PRODUZIONE AND DOLOMITI ENERGIA SIGN MEMORANDUM OF UNDERSTANDING TO DEVELOP HYDRO POWER IN THE PROVINCE OF TRENTO

•		Enel Produzione will sell to Dolomiti Energia 51% of a NewCo for 561 million euros, subject to adjustment, to which it will transfer the hydroelectric operations of the Province of Trento, and to which Enel Rete Gas will transfer 100% of Avisio Energia.
•		The agreement is subject to the granting of an extension of at least 10 years of the hydroelectric concessions involved in the deal and approval of the antitrust authorities.
•		Conti: “This is an important agreement for the development of an invaluable source of renewable energy, contributing to the fight against climate change and the energy security of the country”.

Rome, November 14, 2007 — Enel Produzione SpA and Dolomiti Energia SpA, the latter owned by Tecnofin Trentina SpA (28.07%), Trentino Servizi SpA (24.16%), FT Energia SpA (22%), Fondazione Cassa di Risparmio di Trento e Rovereto (10%) and a number of local Trento utilities and private industrial shareholders, late yesterday evening signed a Memorandum of Understanding (“MoU”) for the development of the hydroelectric power sector in the Province of Trento.

“With this agreement”, remarked Enel CEO Fulvio Conti, “Enel Produzione and Dolomiti Energia have begun an important collaborative initiative, which will help enhance the development of an invaluable source of renewable hydroelectric energy, which the Province of Trento has in abundance. It is an essential resource, making a real contribution to the fight against climate change and the energy security of the country”.

The agreement provides for the sale to Dolomiti Energia of 51% of a NewCo to be formed by Enel Produzione. Before the sale, Enel Produzione will spin off its hydroelectric generation operations in the Province of Trento to the NewCo and Enel Rete Gas SpA will transfer 100% of Avisio Energia SpA, which distributes natural gas in 32 municipalities in the Province of Trento.

The operations being transferred to the NewCo include 14 concessions for major hydroelectric derivations and 22 power plants with a total efficient capacity of 1.4 GW and an annual output of 3.6 TWh, as well as 7 mini-hydro plants (small derivations) with a total efficient capacity of 14 MW with an annual output of about 46 GWh.

The price for the 51% stake in the NewCo being sold to Dolomiti Energia has

provisionally been set at 561 million euros and will be paid in full at the time of the sale. The amount may be adjusted in relation to the actual net financial position of the operations transferred to the NewCo at the sale date, as well as the difference between the estimated value of production and actual production of the unit between 2008 and 2010.

Completion of the transaction is also subject to the official definitive extension of the concessions for major hydroelectric derivations that will be transferred to the NewCo, which are currently scheduled to expire on 31 December 2010, by at least 10 years. This extension, once requested by Enel Produzione and provided for by final regulations, will enable the parties to implement fully the business plan they have developed. The sale of the 51% interest in the NewCo to Dolomiti Energia is also subject to receipt of approval of the transaction from the Italian antitrust authorities.

The agreement also gives Dolomiti Energia a call option to acquire an additional interest in the NewCo from Enel Produzione. The option can be exercised by 31 December 2020 subject to the condition that the duration of the concessions for the major hydroelectric concessions held by the unit being transferred to the NewCo is modified.

Exercise of the call option will entitle Dolomiti Energia to acquire 9% of the NewCo if, at the time the option is exercised, its holding in the NewCo is still 51%; otherwise, the capital underlying the call option will be recalculated on a proportionate basis. The strike price of the call option will be based on the initial price of the 51% stake, provisionally set at 561 million euros, subject to adjustment for any extraordinary capital operations or dividend distributions by the NewCo.

The parties to the transaction have undertaken in the MoU to sign the sale contract within 60 days and agree the final text of the NewCo’s bylaws (which will give the two shareholders a reciprocal right of pre-emption) and a shareholders’ agreement under which the parties undertake not to transfer their holdings in the NewCo for a period to be agreed.

Under the MoU, until the date of the shareholders’ meeting called to approve the financial statements for the 2010 financial year, the NewCo will be governed by a board of directors made up of five members, of which two appointed by Dolomiti Energia (one of whom will be elected chairman) and three by Enel Produzione (one of whom will be elected chief executive officer).

In view of these governance arrangements, for the first three years of the shareholders’ agreement Enel Produzione will exercise a dominant influence over the NewCo and, in compliance with the provisions of law and international accounting standards, will therefore consolidate the NewCo on a full line-by-line basis.

Press Release

ENEL: TENDER OFFER FOR RUSSIAN OPERATOR OGK-5 LAUNCHED

•		Enel Investment Holding has launched a public tender offer for the entire share capital of OGK-5 at a price of 4.4275 rubles per share, following the clearance received by the Russian financial markets regulator (FSFR).
•		The tender acceptance period will last 80 days.

Rome, November 15, 2007 – Enel S.p.A. (Enel) announces that its wholly-owned Dutch subsidiary Enel Investment Holding B.V. (EIH) has launched today a mandatory public tender offer for the entire share capital of the generation company OAO OGK-5 (OGK-5) following the clearance received by the Russian financial markets regulator (FSFR). The duty to launch the offer arises from the overcoming the 30% ownership threshold of OGK-5’s share capital by EIH, following the acquisition of a stake of about 7.15% completed on October 26, 2007.

On August 16, 2007, EIH received from the Russian antitrust authority (FAS) the authorization to increase its stake and buy up to 100% of OGK 5’s share capital. This authorization has a validity period of 1 year.

The tender offer affects about 22,231 million OGK-5 shares (equal to 62.85% of the Russian company’s share capital, net of the 37.15% already owned by EIH) and has been launched at a price of 4.4275 rubles per share, fully payable in cash.

The offer price is equal to the highest price paid by the offeror for the acquisition of OGK-5 shares in the last six months. In the event all OGK-5 shareholders accept, the maximum consideration EIH should pay will be about 98,427 million rubles (equal to around 2,742 million euro at the current exchange rate of 35.8926 rubles for 1 euro). The acquisition will be financed with existing credit lines.

OGK-5 shareholders will have 80 days to accept the offer, starting from the official notification of the offer to OGK-5 occurred today.

Set up in 2004 as part of the electricity industry reform, OGK-5 is one of six wholesale generation companies in Russia where the privatization process is underway. Its four thermal plants are strategically located in some of the most developed and fastest growing regions of the country and include:

•

2,400 MW of gas-fired capacity at Konakovskaya in the Tver Region (Central Russia)

	•		1,290 MW of gas-fired capacity at Nevinnomysskaya in the Stavropol Region (Southern Russia)
	•		3,800 MW of coal-fired capacity at Reftinskaya in the Sverdlovsk Region (Urals)
	•		1,182 MW of gas-fired capacity at Sredneuralskaya in the Sverdlovsk Region (Urals).

In the first half of 2007 OGK-5 posted revenues of 13,748 million rubles, an operating profit of 1,370 million rubles and a net income of 1,200 million rubles.

The tender offer for OGK-5 is part of Enel’s strategy aimed at strengthening the Group’s position in the Russian market, where Enel was the first non-Russian player to be awarded generation assets as part of the ongoing liberalization and privatization of the electricity sector.

Enel is a vertically integrated Group in Russia. In addition to the stake in OGK-5, the Enel Group currently owns 40% of the Severnaya Energia consortium (previously named Enineftegaz), with Eni holding the remaining 60%. The consortium has acquired a number of promising natural gas assets (OAO Arcticgaz, Urengoil and OAO Neftegaztechnologia). Moreover, the Enel Group also holds 49.5% of RusEnergoSbyt, the country’s leading independent electricity supplier.

Report on the
3rd Quarter of 2007

Contents

The Enel structure			5
Foreword			6
Summary of results			7
Regulatory and rate issues			9
Significant events in the 3rd Quarter of 2007			11
Subsequent events and outlook			14
Operating review			16
Results by Division			20
• Domestic Sales			24
• Domestic Generation and Energy Management			30
• Domestic Infrastructure and Networks			36
• International			40
• Parent Company and Other Activities			47
Consolidated financial statements
Condensed Consolidated Income Statement			51
Condensed Consolidated Balance Sheet			52
Condensed Consolidated Statement of Cash Flows			53
Statement of Recognized Income and Expenses for the Period			54
Operating performance and financial position			55
Other information			68

Foreword

The consolidated report at September 30, 2007 has been prepared in compliance with the IFRS-EU and with Consob Regulation no. 11971/1999 and subsequent amendments.

The recognition and measurement criteria adopted in the consolidated financial statements at September 30, 2007, which have not been audited, are consistent with those used to prepare the consolidated financial statements at December 31, 2006 and the consolidated financial statements at September 30, 2006, supplemented by the recognition and measurement policies for mining businesses as concerns tangible and intangible assets following the acquisition of former Yukos assets in the 2nd Quarter of 2007. This operation is discussed in greater detail in the half-year report at June 30, 2007.

Summary of results

Highlights of results in the first nine months of 2007

In the first nine months of 2007, revenues came to € 28,760 million, substantially in line (up 0.5%) with the same period of 2006.

The gross operating margin amounted to € 6,711 million, compared with € 6,264 million for the first nine months of 2006, an increase of € 447 million or 7.1%, with growth being registered across all Divisions, partially offset by lower margins for the Parent Company and for Services and Other Activities.

Operating income in the first nine months of 2007 totaled € 4,751 million for the first nine months of 2007, a decrease of € 134 million or 2.7%. The decline essentially reflects the income generated in 2006 from the exchange of 30.97% of Wind for 20.9% of Weather Investments in the amount of € 263 million.

Group net income amounted to € 2,678 million, compared with € 2,640 million in the year-earlier period (up 1.4%), which included the income from the Wind-Weather equity exchange.

Net financial debt at September 30, 2007 came to € 24,769 million, an increase of € 13,079 million over the € 11,690 million at December 31, 2006, mainly related to the significant foreign acquisitions in progress at the balance-sheet date. The ratio of debt to equity at September 30, 2007 was 1.31, compared with 0.61 at the end of 2006.

Group employees at September 30, 2007 numbered 56,057, a decrease of 2,491 employees from the 58,548 at the end of 2006. The decline is mainly due to the negative balance of 2,635 between new hires and terminations.

Regulatory and rate issues

Liberalization of electricity sales

On June 18, 2007, the Government issued Decree Law 73/2007 (ratified with Law 125 of August 3, 2007) in the run up to the subsequent opening of the electricity market to residential customers, which took place on July 1, 2007. The measure establishes:

§		the obligation for corporate separation between distribution and sales activities for distribution companies with more than 100,000 customers;
§		provisions to ensure non-discriminatory access to metering data;
§		provisions to ensure the supply of electricity by distribution companies, or related sales companies, to residential customers and small businesses that do not opt for the free market (the “enhanced protection market”). For these customers, the provisioning of electricity shall be guaranteed by the Single Buyer. The standard conditions and reference prices for the service are determined by the Authority for Electricity and Gas;
§		the presence of a safeguard supplier, selected by tender, for customers not eligible for enhanced protection (businesses with more than 50 employees or annual revenues of more than € 10 million) that do not opt for the free market or that should find themselves without a supplier (the “safeguard market”). Until the completion of the tender (the rules for which will be established in a decree of the Minister for Economic Development), these customers will temporarily be provided service by distribution or related sales companies without any intermediation by the Single Buyer.

In accordance with the provisions specified above, Enel Distribuzione and Deval will no longer be directly providing service to the customers of the regulated market, now replaced by the enhanced protection and safeguard markets described above. Supply to customers that do not exercise the option to receive service on the free market and that are eligible for the enhanced safeguards mechanism (residential customers and small businesses with fewer than 50 employees and annual revenues of less than € 10 million) will be handled by special-purpose companies established within 180 days of the date on which the aforementioned decree went into effect. These newly-established companies will continue to obtain power from the Single Buyer in order to serve these customers.

The “Bersani” bill

As regards the regulations governing derivatives connected with physical markets for electricity and gas, which are contained in the “Bersani” bill, Legislative Decree 164 of September 17, 2007, in implementation of Directive 2004/39/EC concerning markets in financial derivatives, amended the Consolidated Law on Financial Intermediation (Legislative Decree 58 of February 24, 1998), granting access to regulated markets in electricity derivatives to electricity companies as well as financial institutions. The decree also specifies the division of responsibilities between Consob and the Authority for Electricity and Gas for these markets.

Electricity import contracts

Enel has two contracts for the import of electricity, one with EdF (on the French border, terminating on December 31, 2007) and the other with Atel (on the Swiss border, terminating on December 31, 2011). The power imported under the contract with Atel is sold to the Single Buyer at a set price and is used to supply the enhanced protection market.

For 2007, with a decree of December 15, 2006, the Minister for Economic Development decided:

§

to maintain the sale price to the Single Buyer at € 66/MWh in 2007, also providing for the possible indexing of that value to wholesale electricity prices in Italy using a mechanism to be established in accordance with criteria defined by the Authority. With Resolution no. 82/07, the Authority established the procedure for the quarterly adjustment of the price, which has been set at € 66.28/MWh for the 2nd Quarter of 2007, at € 63.75/MWh for the 3rd Quarter and at € 62.46/MWh for the 4th Quarter;

§

to maintain retained the capacity reserve on the Swiss border with regard to the contract with Atel, with the joint agreement of Italian and Swiss authorities;

§

to not maintain the import capacity reserve on the Italian-French border for the long-term contract with EdF. Accordingly, in 2007 the electricity under the contract will be sold by Enel in foreign markets, mainly in France.

Enel’s appeal to the French Administrative Court against the decision of the French regulator (CRE) of December 2005 that it would not reserve any import capacity for the performance of the contract between Enel and EdF for 2006 was denied by the French Council of State in its ruling no. 289687 of March 30, 2007.

Significant events in the 3rd Quarter of 2007

Public tender offer for Endesa

On July 2, 2007, Enel and Acciona, in application of previous market announcements, adjusted the offer price set in the public tender offer launched for 100% of Endesa to take account of the dividend distributed to Endesa shareholders. The new price was therefore set at € 40.16 per share, being the difference between the € 41.30 price per share announced on April 11, 2007 and the dividend of € 1.14 per share approved by the Endesa shareholders on June 20 and paid on July 2, 2007.

On July 5, 2007, the European Commission approved the operation undertaken jointly by Enel and Acciona to acquire exclusive control of Endesa by way of a public tender offer.

On July 25, the Board of Directors of Spain’s Comisión Nacional del Mercado de Valores (CNMV) authorized the takeover bid for 100% of Endesa shares launched by Acciona and Enel Energy Europe (EEE) and on July 27, the Spanish Council of Ministers authorized EEE to exercise the voting rights attaching to the shares it holds subsequent to the closure of the public tender offer made together with Acciona.

On July 30, 2007, the acceptance period for the joint offer for Endesa shares began. It closed on October 1, 2007. The offer price is € 40.16 per share in cash.

On August 3, 2007, Enel and Acciona filed an administrative appeal against a number of the conditions imposed by the resolution of the Board of the Spanish National Energy Commission (CNE) dated July 4, 2007 authorizing the acquisition of Endesa shares through a public tender offer.

On September 25, 2007, the Special Shareholders’ Meeting of Endesa approved amendments to the bylaws, including the removal of the ceiling on the exercise of voting rights attached to shares, previously set at 10%. This thereby removed one of the two conditions determining the effectiveness of the public tender offer.

Acquisition of control of Porto Empedocle regasification terminal

On July 2, 2007, following up on the agreements reached in December 2005, Enel Trade completed the acquisition of 90% of Nuove Energie Srl, which is developing a regasification terminal at Porto Empedocle (Agrigento).

With the acquisition, Enel confirms its objective of building a new regasification terminal, an essential part of diversifying energy sources, boosting the flexibility of supply and enhancing the security of Italy’s gas system.

Construction of the plant will involve an estimated investment of more than € 600 million, with the facility scheduled to enter service in 2011. The process of obtaining

authorizations is at an advanced stage, as the Ministry for the Environment has already issued a positive environmental impact opinion for the land works and given the safety feasibility approval envisaged under the Seveso Law.

Protocol between Enel and the Region of Sardinia on renewables and developing industry on the island

On July 5, 2007, Enel and the Region of Sardinia signed a protocol of understanding to foster the development of renewables and ensure supply of power at competitive prices to strategically important enterprises that operate on the island.

Specifically, under the agreement the parties are mutually committed to expanding existing wind plants or build new wind facilities for a total capacity of 160 MW.

Completion of acquisition of an additional stake in OGK-5

On July 11, 2007, Enel completed the acquisition of an additional 4.96% of OAO OGK-5 (OGK-5), the Russian electricity generation company, for which about $281 million (about € 210 million) was paid on June 22. Thus, Enel indirectly owns 29.99% of the share capital of OGK-5 at September 30, 2007.

On August 16, the FAS (the Russian antitrust authority) authorized Enel to increase its stake to 100% of OGK-5. This authorization is valid for one year.

Enel-Saudi Arabia cooperation agreement

On July 20, 2007 Enel and the Saudi Arabian General Investment Authority (SAGIA) signed a Memorandum of Understanding to foster the introduction of advanced environmentally friendly technologies in that country and the launch of joint research and development projects in the energy sector.

Bond issues

On July 26, 2007, the Enel’s Board of Directors approved the issue of one or more bonds to be placed with institutional investors or retail investors, to be listed (in whole or in part) on one or more regulated markets by June 30, 2008, with a total maximum amount of € 10 billion. The operation is part of the program to refinance Enel’s debt, in particular the € 35 billion credit facility (reduced to € 30 billion in June, to € 28 billion in September and to € 23 billion in October) to finance the announced public tender offer for Endesa shares.

As a result, on September 13, 2007, Enel, through its subsidiary Enel Finance International, carried out a multi-tranche bond issue for a total value of $3.5 billion (about € 2.5 billion), structured as follows:

§

$1 billion (about € 0.7 billion) 5.70% five-year fixed-rate note;

§

$1.5 billion (about € 1.1 billion) 6.25% ten-year fixed-rate note;

§

$1 billion (about € 0.7 billion) 6.80% thirty-year fixed-rate note.

The facility was entirely hedged with cross currency swaps that linked each tranche to a fixed rate in euro.

The bond issue, carried out by a pool of banks, attracted subscriptions of about $6 billion, much greater than the supply.

Investment in solar energy

On August 24, 2007 Enel announced investments of about € 300 million in solar energy by 2010. The program provides for the construction of plants with more than 35 MW of capacity, avoiding emissions of about 30 thousand metric tons of carbon dioxide (CO ₂ ).

Distribution of interim dividend for 2007 approved

On September 5, 2007 the Board of Directors of Enel SpA approved the distribution of an interim dividend of € 0.20 per share. The interim dividend will be paid as from November 22, 2007, with an ex-dividend date of November 19, 2007.

Subsequent events and outlook

Subsequent events

Public tender offer for Endesa

On October 5, 2007, the Comisión Nacional del Mercado de Valores announced that acceptance of the offer amounted to 46.05% of Endesa’s share capital, of which 45.62% (equal to 483,060,017 shares) was tendered in the offer in Spain and 0.43% (equal to 4,541,626 ADS) was tendered in the offer in the United States. As a result, the other condition for the effectiveness of the tender offer, namely the acceptance of the offer by shareholders representing more than 50% of the share capital of Endesa including those shares already held directly and indirectly by the offerors, has been satisfied. In accordance with the agreements between Enel and Acciona, following completion of the takeover, Enel, through EEE, has acquired 42.08% of the share capital of Endesa (equal to 445,522,261 shares), while Acciona has acquired 3.97% (equal to 42,079,382 shares). Therefore, following completion of the takeover bid, Enel owns 67.05% of Endesa’s share capital (equal to 709,923,858 shares), while Acciona directly and indirectly holds 25.01% (equal to 264,793,905 shares).

On October 18, 2007, the Board of Directors of Endesa appointed a number of new board members in order to ensure that its composition reflects the ownership structure resulting from the outcome of the public tender offer.

On October 22, 2007, the Spanish Ministry of Industry, Tourism and Trade partially upheld the administrative appeal filed by Enel and Acciona against certain conditions imposed by the Spanish National Energy Commission (CNE) on the public tender offer for Endesa.

Acquisition of further stake in OGK-5

On October 24, 2007, Enel, through its subsidiary Enel Investment Holding (EIH), entered into an agreement for the purchase from Credit Suisse of about 2,529.4 million shares of OGK-5, representing about 7.15% of the company’s share capital, at a price of 4.2574 rubles per share, for a total of 10,769 million rubles (equal to about € 304 million).

Upon the completion of the acquisition, Enel now holds about 37.15% of OGK-5 and, having exceeded the threshold of 30% will be required under Russian law to launch a public tender offer for the entire share capital of the Russian generation company at a price of not less than 4.4275 rubles per share, the latter being the highest price paid by the offeror over the last six months.

Acquisition of Blue Line

On October 24, 2007, Enel, through its subsidiary Enel Investment Holding, completed the acquisition for about € 1.1 million of 100% of Blue Line, a Romanian company which owns the rights to develop wind-power projects in the Dobrogea region, with an overall future potential capacity of about 200 MW.

The projects are under development and are expected to become operational in 2010.

Outlook

With its acquisition of 67.05% of Endesa and the strengthening of its position in Russia through the acquisition of a stake in the OGK-5 generation company, of which Enel intends to acquire control, Enel has substantially completed its international expansion and thus has been transformed into a multinational company in the energy sector.

The operating cash flows generated by the companies acquired and the Enel Group as a whole will ensure sufficient resources to meet the financial commitments associated with such operations and to continue the dividend policy announced to the markets.

Work also continues on the programs to achieve operating excellence and growth in the domestic free market, as well as the investment plans for research and in the area of renewable energy resources. It is expected that the new international scale achieved and all of the activities envisaged for the various areas will generate positive effects in 2007, with performance for the year forecast to improve on 2006.

Operating review

Electricity generation and demand

Domestic electricity flows

Source: Terna — Rete Elettrica Nazionale (Monthly report — September 2007).

§		Domestic electricity demand in the 3rd Quarter of 2007 was substantially in line with the same period of 2006, while it grew 0.2% in the first nine months of 2007, reaching 252.6 billion kWh at September 30, 2007. Of this total, 85.9% was met by net domestic electricity generation for consumption (87.6% in the first nine months of 2006), with the remaining 14.1% being met by net electricity imports (12.4% in the first nine months of 2006);
§		net electricity imports in the first nine months of 2007 increased by 4.3 billion kWh, essentially owing to the decline in electricity prices in other European countries from their high levels in early 2006, which had prompted electricity companies to reduce imports;
§		mainly as a result of higher imports and the demand for electricity in line with the same period of last year, gross electricity generation declined by 5.1 billion kWh or 2.1% in the first nine months of 2007. The period saw a decrease in hydroelectric generation (down 3.7 billion kWh) and in thermal generation (down 2.3 billion kWh), partially offset by the increase in generation from geothermal and other sources (up 0.9 billion kWh).

Enel generation and sales

Enel generation and sales (domestic)

§		Enel’s net domestic electricity generation fell by 11.7% and by 12.8% in the 3rd Quarter and in the first nine months of 2007, respectively. Specifically, the decrease in the first nine months of 2007 was largely due to the decline in thermal generation (down 8.0 billion kWh) and hydroelectric generation (down 2.4 billion kWh);
§		electricity purchases grew by 2.6% in the first nine months of 2007, primarily due to the 6.6% increase in the 3rd Quarter;
§		sales to wholesalers fell by 3.7% in the 3rd Quarter and by 7.3% in the first nine months of the year, mainly due to the decrease in volumes sold to resellers.

As for overall sales to the final consumer, Enel’s market share in the first nine months of 2007 came to 45.1% (about 45.3% in the corresponding period of 2006). In particular:

§		sales on the enhanced protection and safeguard markets decreased by 15.0% (13.8 billion kWh) in the first nine months of 2007 (down 13.3% and 4.0 billion kWh in the 3rd Quarter), primarily due to the gradual opening of the market, which gave rise to an increase of 87.3% (13.3 billion kWh) in sales on the free market (up 88.8% and 4.8 billion kWh in the 3rd Quarter);
§		total electricity transported on Enel’s distribution network in the first nine months of 2007 remained substantially in line with the same period of 2006, while it rose by 2.2% in the 3rd Quarter.

Enel generation and sales (abroad)

§		Enel’s net electricity generation abroad in the first nine months of 2007 came to 26.0 billion kWh, an increase of 7.5 billion kWh, mainly attributable to the change in the scope of consolidation as a result of the acquisitions of Slovenské elektrárne and the Panamanian companies;
§		electricity sales in the first nine months of 2007 increased by 10.8 billion kWh, mainly thanks to the contribution of the Russian energy trading company RusEnergoSbyt, which has been consolidated since the end of June 2006;
§		energy transported in the first nine months of 2007 came to 9.4 billion kWh, broadly in line with the figure for the corresponding period of 2006.

Main changes in the scope of consolidation

The scope of consolidation in the first nine months of 2007 changed with respect to the first nine months of 2006 as a result of the following main transactions:

§		acquisition of a 66% interest in Slovenské elektrárne, a Slovakian generation company, on April 28, 2006;
§		sale of 30% of Enel Unión Fenosa Renovables on May 30, 2006. Following this sale, the interest in the company fell to 50%, with the Group exercising joint control over the company together with the other shareholders. As a result, the company is being consolidated on a proportionate basis as of that date;
§		acquisition of the remaining 40% interest in Enel Maritza East 3 (formerly Maritza East III Power Company) on June 14, 2006. Following this transaction, the Group holds a 73% stake in Enel Maritza East 3, a Bulgarian generation company;
§		acquisition, on June 14, 2006, of a 100% interest in Maritza O&M Holding Netherlands, a holding company that owns 73% of Enel Operations Bulgaria (formerly Maritza East 3 Operating Company), which is responsible for the maintenance of the Enel Maritza East 3 plant;
§		acquisition, on June 21, 2006, of a 49.5% interest in Res Holdings, which holds a 100% stake in the Russian firm RusEnergoSbyt (energy trading and sales). Enel

		now exercises joint control over the company together with the other shareholders; as a result, the company is consolidated on a proportionate basis;
§		acquisition, on July 13, 2006, of a 100% stake in Erelis, a company that develops wind plants in France;
§		acquisition, on August 1, 2006, of a 100% stake in Enel Panama (formerly Hydro Quebec Latin America), which, together with Globeleq (a private equity fund), exercised joint control over Fortuna, which is consolidated on a proportionate basis. On February 2, 2007, with the acquisition of the entire capital of the Panamanian company Enel Fortuna (formerly Globeleq Holdings Fortuna), Enel acquired full control of Fortuna. Accordingly, as from that date the latter is fully consolidated;
§		acquisition, on October 6, 2006, through Enel Brasil Partecipações, a subsidiary of Enel Latin America, of 100% of ten companies of the Rede Group that own twenty mini-hydro plants;
§		acquisition, on April 4, 2007, of a set of assets in the gas sector by Enineftegaz, a company jointly controlled by Artic Russia (formerly Eni Russia), a joint venture in which Enel has a stake of 40% and Eni 60%. As Enel exercises joint control, Enineftegaz is consolidated on a proportionate basis without taking account of the possible exercise of the call option by Gazprom;
§		acquisition, on July 2, 2007, of 90% of Nuove Energie, a company that builds and operates LNG regasification infrastructures.

The balance sheet effects of the consolidation changes do not affect the comparability of the figures for the reference periods and are discussed in the comments on results by Division.

Results by Division

The Domestic Sales Division, Domestic Generation and Energy Management Division, Domestic Infrastructure and Networks Division and International Division, along with the Parent Company and Services and Other Activities, represent the organizational structure adopted by the Group. The results of these Divisions are considered by management in assessing Group performance.

Following the transfer of the “large electricity users” unit (customers with annual consumption of more than 100 million kWh) from Enel Trade to Enel Energia, effective as of April 1, 2006, the figures for the unit for the 1st Quarter of 2006 were reallocated from the Domestic Generation and Energy Management Division to the Domestic Sales Division for comparative purposes.

Results by Division for the 3rd Quarter of 2007 and 2006

Segment information — 3rd Quarter of 2007 ⁽¹⁾

Segment information — 3rd Quarter of 2006 ⁽¹⁾

Results by Division for the first nine months of 2007 and 2006

Segment information for the first nine months of 2007 ⁽¹⁾

						Domestic				Domestic
						Generat.				Infrastruc.												Services				Eliminations
		Domestic				and Energy				and								Parent				and Other				and
Millions of euro		Sales				Management				Networks				Internat.				Company				Activities				adjustments				Total
Revenues from third parties			16,029				8,856				457				3,029				484				119				(214	)			28,760
Revenues from other segments			37				3,527				3,680				47				176				701				(8,168	)			—
Total revenues			16,066				12,383				4,137				3,076				660				820				(8,382	)			28,760
Net income/(charges) from commodity risk management			(73	)			2				—				72				(1	)			—				—				—
Gross operating margin			191				2,861				2,758				873				(101	)			135				(6	)			6,711
Depreciation, amortization and impairment losses			173				699				634				382				12				60				—				1,960
Operating income			18				2,162				2,124				491				(113	)			75				(6	)			4,751
Net financial income/(expense) and income/(expense) from equity investments accounted for using the equity method			—				—				—				—				—				—				—				(324	)
Taxes			—				—				—				—				—				—				—				1,674
Net income (Group and minority interests)			—				—				—				—				—				—				—				2,753
Operating assets			7,648				17,142				17,459				11,877				904				2,723				(3,611	)			54,142
Operating liabilities			6,166				3,892				3,617				4,192				1,458				2,296				(2,991	)			18,630
Capital expenditure			24				781				1,001				671				5				36				—				2,518
Segment information for the first nine months of 2006 (1)
						Domestic				Domestic
						Generat.				Infrastruc.												Services				Eliminations
		Domestic				and Energy				and								Parent				and Other				and
Millions of euro		Sales				Management				Networks				Internat.				Company				Activities				adjustments				Total
Revenues from third parties			15,848				9,537				529				2,121				695				160				(269	)			28,621
Revenues from other segments			66				2,182				3,551				4				171				622				(6,596	)			—
Total revenues			15,914				11,719				4,080				2,125				866				782				(6,865	)			28,621
Net income/(charges) from commodity risk management			(4	)			(534	)			—				(1	)			(5	)			—				—				(544	)
Gross operating margin			166				2,653				2,524				617				175				141				(12	)			6,264
Income from equity exchange transaction			—				—				—				—				263				—				—				263
Depreciation, amortization and impairment losses			81				684				602				202				10				63				—				1,642
Operating income			85				1,969				1,922				415				428				78				(12	)			4,885
Net financial income/(expense) and income/(expense) from equity investments accounted for using the equity method			—				—				—				—				—				—				—				(491	)
Taxes			—				—				—				—				—				—				—				1,674
Net income (Group and minority interests)			—				—				—				—				—				—				—				2,720
Operating assets (2)			6,948				16,752				16,875				10,008				1,013				1,771				(3,352	)			50,015
Operating liabilities (2)			6,272				4,019				4,042				4,037				1,275				1,128				(2,884	)			17,889
Capital expenditure			22				526				979				228				3				37				—				1,795

The following table reconciles consolidated assets and liabilities and the segment figures.

Domestic Sales

The Domestic Sales Division is responsible for commercial activities, with the objective of creating an integrated package of electricity and gas products and services for end users. The activities are carried out by:

•		Enel Distribuzione and Deval (the operations of the latter are limited to the Valle d’Aosta region) for the sale of electricity on the enhanced protection and safeguard markets;
•		Enel Energia (formerly Enel Gas) for the sale of electricity on the free market and the sale of natural gas to end users;
•		Enel.si, which is responsible for engineering and franchising.

Regulatory and rate issues

Electricity

Rates and rate updates

With Resolution no. 237/07 of September 27, 2007, the Authority for Electricity and Gas established the new dual on-peak/off-peak charges, differentiating between the hours in the F1 time band and those in the F2 and F3 time bands. End users covered by the enhanced protection system and equipped with the appropriate meters, and all customers who had already opted for on-peak/off-peak rates by July 1, 2007 will be able to select the new terms of supply commencing October 1, 2007. With Resolution no. 238/07 of September 27, 2007, the Authority updated electricity rates and price terms for the enhanced protection system for the October-December 2007 quarter, increasing the average charge to end users by about € 3.8/MWh, or 2.4%. In particular, the Authority raised the rate component covering the cost of raw material and ancillary services by 5.6% (up € 5.1/MWh) and lowered the UC1 component, covering past deficits, by about 24% (down € 1.3/MWh).

Rules for the sale of CIP 6 electricity by the Electricity Services Operator (ESO)

The decree of the Minister for Economic Development of December 14, 2006 confirmed for 2007 the sale of CIP 6 energy on the Power Exchange by the ESO and the pro rata assignment of such energy to those requesting it, using contracts for differences, based on average annual electricity consumption. The decree reduced the share going to the Single Buyer to 35%, while the strike price of the contracts for differences was set at € 64/MWh for the 1st Quarter of 2007 and is adjusted during the year in the manner specified by the Authority for Electricity and Gas in relation to developments in the price index referred to in Article 5 of the decree of the Minister for Productive Activities of December 19, 2003. The total quantity assigned for 2007 was 5,400 MW, of which

3,510 MW to the free market (639 MW to Enel) and 1,890 MW to the enhanced protection and safeguard markets.

In Resolution no. 82/07, the Authority also established procedures for adjusting the price for the sale of CIP 6 energy on a quarterly basis. The price was set at € 59.94/MWh for the 2nd Quarter of 2007, € 53.64/MWh for the 3rd Quarter and € 62.60/MWh for the 4th Quarter.

Gas

Rates and rate updates

With Resolution no. 240/07, the Authority for Electricity and Gas updated the natural gas sale cost component (QVD), increasing it by 11.7%. The Authority also announced a subsequent measure systematically revising the remuneration procedures for retail sales activity, both in terms of the level of recognized costs and the breakdown of the price component to cover such costs.

With Resolution no. 242/07, the Authority updated the rates for natural gas supplies for the 4th Quarter of 2007 in accordance with the method introduced in Resolution no. 134/06, raising the raw materials component by 5.7% compared with the previous quarter.

Supplier of last resort

On September 21, 2007, Enel filed an application to participate in the open procedure to select natural gas suppliers of last resort for thermal year 2007-2008. Such suppliers are responsible for ensuring natural gas supplies to end users with a consumption of less than 200,000 cubic meters who have been left without a supplier for reasons beyond their control. The procedure identifies a supplier of last resort for each of the five supply macro-areas into which the country is divided. The retail companies thus selected undertake to supply a specific annual quantity of gas at the price bid in the tender.

With Resolution no. 243/07, the Authority published the ranking of bids, which identifies Enel Energia as supplier of last resort for a maximum quantity of gas totaling 30 million cubic meters in the Emilia Romagna, Liguria, Tuscany, Umbria, Marche and upper Lazio macro-area.

Operating performance of the Domestic Sales Division

3rd Quarter												Millions of euro		First nine months
2007				2006				Change						2007				2006				Change
	5,449				5,138				311			Revenues			16,066				15,914				152
												Net income/(charges) from
	(8	)			2				(6	)		commodity risk management			(73	)			(4	)			(69	)
	76				12				(64	)		Gross operating margin			191				166				25
	41				(20	)			61			Operating income			18				85				(67	)
												Operating assets			7,648				6,948	(1)			700
												Operating liabilities			6,166				6,272	(1)			(106	)
												Employees at period-end (no.)			4,991				5,176	(1)			(185	)
												Capital expenditure			24				22				2
(1)  At December 31, 2006.