Free translation from the original prepared in Spanish for publication in Argentina PAMPA ENERGÍA S.A.

Transcription

1 Special Merger Balance Sheet As of December 31, 2011

2 Special Merger Balance Sheet As of December 31, 2011 (Nota 1) Legal address: Corporate purpose: 3302 Ortiz de Ocampo Street, Building 4, Buenos Aires Investing in undertakings and companies of any nature, whether on its own initiative, on behalf of third parties or by partnering with third parties, and whether in the Republic of Argentina or abroad. Registration dates in the Public Registry of Commerce: Filing date of the Company's by-laws February 21, 1945 Date of the latest amendments to the Company s by-law June 18, 2009 Duration of the Company: June 30, 2044 CAPITAL STOCK (Note 6) Class of shares Authorized for public offering Number of shares Subscribed and paid in Ps. Book-entry N/V Ps., 1 vote per share 1,314,310,895 1,314,310,895 1

3 Special Merger Balance Sheet As of December 31, 2011 (Notes 1 & 2) Ps. ASSETS CURRENT ASSETS Cash and Banks (Nota 4.a) Investments (Nota 4.b) Trade receivables (Nota 4.c) Other receivables (Nota 4.d) Total Current Assets NON CURRENT ASSETS Other receivables (Nota 4.d) Investments (Nota 4.b) Total Non-current Assets Total Assets LIABILITIES CURRENT LIABILITIES Accounts payable (Nota 4.e) Financial debt (Nota 4.f) Salaries and social security payable (Nota 4.g) Taxes payable (Nota 4.h) Other liabilities (Nota 4.i) Total Current Liabilities Total Liabilities SHAREHOLDERS EQUITY (Nota 6) Total Liabilities and shareholders equity The accompanying notes and exhibits are an integral part of this Merger Special financial statements. 2

4 Notes to the Special Merger Balance Sheet As of December 31, 2011 NOTE 1: PURPOSE OF THIS SPECIAL MERGER BALANCE SHEET Pursuant to the provisions of Section 83 of Law Act No. 19,550, Section 165 of General Resolution No. 7/05 of the Companies Inspection Bureau (Inspección General de Justicia) and other applicable rules, and by virtue of the Prior Merger Commitment and partial spin-off of Powerco S.A. entered into on March 9, 2012 among Pampa Energía S.A. ( the Company ), Pampa Generación S.A., Inversora Ingentis S.A. and Powerco S.A., this Special Merger Balance Sheet as of December 31, 2011 is presented. On December 30, 2011, the Company s Board of Directors resolved to initiate proceedings for the Company to jointly absorb Pampa Generación S.A., Inversora Ingentis S.A. and Powerco S.A. s spin off assets and liabilities, concluding that it is beneficial for them to be merged into a single company under the terms of tax neutrality in order to optimize resources by simplifying their administrative and operative structure. This Special Merger Balance Sheet as of December 31, 2011 has been drawn up for its consideration by the Company s Extraordinary Meetings of Shareholders. NOTE 2: BASIS OF PREPARATION AND PRESENTATION OF THE SPECIAL MERGER BALANCE SHEET The Special Merger Balance Sheet as of December 31, 2011 has been prepared through the company's balance sheet as of December 31, In view of their specific purpose, this special merger balance sheet,, do not include the income statement, the statement of changes in shareholders equity, the statement of cash flows or the presentation of comparative figures and certain supplementary information required by professional accounting standards in force in the City of Buenos Aires. Therefore, this Merger Balance sheet and its notes should be read jointly with Pampa Energia S.A s Balance Sheet as of December 31, NOTE 3: ACCOUNTING STANDARDS Below are the most significant accounting standards used by the Company to prepare its special merger balance sheet. 3

5 NOTE 3: (Continued) Basis of preparation and presentation of the Special Merger Balance Sheet: The special merger balance sheet is stated in Argentine pesos and was prepared in accordance with accounting disclosure and valuation accounting standards contained in the Technical Resolutions ( TR ) issued by the Argentine Federation of Professional Councils in Economic Sciences ( FACPCE ) and according to the Resolutions issued by the National Securities Commission ( CNV ). Pursuant to its General Resolution No. 562/09, the CNV incorporated FACPCE s Technical Resolution No. 26 into the CNV Regulations on December 30, 2009 Technical Resolution No. 26 prescribes that certain entities subject to public offering are under an obligation to adopt the International Financial Reporting Standards ( IFRS ) issued by the International Accounting Standards Board ( IASB ). In July 2010, the CNV passed its General Resolution No. 576/10, which introduces certain changes to its previous General Resolution No. 562/09. In December 2010, the FACPCE issued its TR No. 29 whereby it made some changes in its Technical Resolution No. 26 in connection with entities whose securities are admitted to the public offering system seeking to harmonize its provisions with the requirements imposed by CNV s General Resolution No. 562/09. In turn, in October 2011, the CNV issued General Resolution No. 592/11 introducing some modifications to General Resolution No. 576/10. The Company is obligated to adopt the IFRS as from the fiscal year beginning on January 1, On April 7, 2010, the Company s Board of Directors approved a specific Implementation Plan as set forth in the CNV s General Resolution No. 562/10. Pursuant to what has been previously stated, the first completed and intermediate financial statements drawn up by the Company pursuant to the IFRS will be those corresponding to the year ended December 31, 2012 and the quarterly period ended March 31, 2012, respectively. 3.1 Accounting estimates The preparation of financial statements in accordance with professional accounting standards in Argentina requires management of the company to make estimates affecting the amount of assets and liabilities recorded and if applicable, the disclosure of contingencies at the date of filing of this special merger balance sheet. Management of the company makes estimates to calculate, for example, the allowance for doubtful accounts, depreciation, the recoverable value of assets, the income tax charge and provisions for contingencies Actual results might differ from the estimates made at the date of preparation of this special merger balance sheet. 4

6 NOTE 3: (Continued) 3.2 Recognition of the inflation effects The special merger balance sheet has been prepared in constant monetary units, reflecting the overall effects of inflation through August 31, As from that date, in accordance with TR and for requirements of the control authorities, restatement of the financial statements was discontinued until December 31, As from January 1, 2002, in accordance with TR recognition of the effects of inflation has been resumed. In accordance with CNV Resolution 441/03, inflation accounting was discontinued as from March 1, Accounting Polices a) Cash and banks Cash and Banks balances have been recorded at their nominal value. b) Current Investments Short-term investments in mutual funds were valued at quotation value at the date of this special merger balance sheet. c) Non-current investments - Equity investments and goodwill Equity investments in subsidiaries and joint control have been valued by the equity method in accordance with the provisions of the TR No. 21 of the FACPCE. For this, the Company has used the financial statements of its subsidiaries prepared as of the date of this Special Merger Balance Sheet or, failing that, the best available financial information, covering the same period of time and using accounting standards similar to those adopted by the Company. In determining the proportional equity value, the adjustments made to unify the valuation criteria, the elimination of reciprocal interests, the results undisclosed to third parties and the higher value paid for the purchase of shares in affiliates and controlled companies assignable to the acquired assets, the goodwill associated with the acquired subsidiaries and affiliates and other assets and liabilities identified in business combinations have been taken into consideration. The proportional equity value will be adjusted based on its recoverable value if it exceeds this value. Goodwill represents the excess or shortfall in the fair value of identifiable net assets acquired compared with their acquisition cost. Positive goodwill amortization charges are calculated on a regular basis throughout their useful life, representing the best estimate for the period during which the Company expects to receive economic benefits from them. Negative goodwill is amortized on a regular basis throughout a period equal to the weighted average remaining useful life of the issuer s assets subject to depreciation and amortization. 5

7 NOTE 3: (Continued) The Company evaluates the recoverability of its investments and goodwill values associated to them on a periodical basis based on future cash flows and other available information as of the issuance hereof. Goodwill values do not exceed their estimated recoverable value taking into consideration the information provided in the following paragraphs. As regards the controlled company Edenor, despite its current economic and financial situation, this company has prepared its projections in the understanding that, according to the current circumstances, it will be granted better tariffs. In order to allow for the estimation risk resulting from the projection of the above mentioned variables, as well as the delay in the tariff increase and the timely requested acknowledgment of cost increases by MMC, different alternative scenarios have been weighed based on their occurrence probabilities. However, the Company cannot guarantee that the future behavior of these assumptions will not significantly differ from the estimates and assessments made as at the date of preparation of its financial statements. As a result of this process, the Company has evaluated the recoverability of long-term assets associated with the operation of the controlled company Edenor (fixed assets, intangible assets and goodwill values) which resulted in the set up of a recoverability allowance affecting income for a total value of Ps million, net of the deferred tax. As regards the joint-controlled companies Compañía de Transporte de Energía Eléctrica en Alta Tensión Transener S.A. and Empresa de Transporte de Energía Eléctrica por Distribución Troncal de la Provincia de Buenos Aires S.A., cash flows were estimated considering the tariff adjustment guidelines submitted by them to the ENRE and based on the parameters provided for by Act No. 24,065 regulating the negotiation which is currently in process. c) Business combinations: Meaningful acquisitions of companies and net assets were disclosed according to the acquisition method set forth by TR No. 18 and 21. All assets and liabilities acquired from independent third parties have been revalued so as to reflect their current value. In this sense, the Company has identified the acquired assets and liabilities, including the higher value of fixed assets, intangible assets and other assets and liabilities identified at the time of purchase and not recorded by the acquired companies. This identification process and the corresponding current value assessment involve the making of complex judgments and significant estimates. If the paid price exceeds the value of the identified tangible and intangible assets and liabilities, a positive goodwill will be recognized. If the paid price is lower than the value of the identified tangible and intangible assets and liabilities, the deficit will be recognized as a negative goodwill. 6

8 d) Receivables and liabilities Accounts receivable and payable are stated at their nominal value plus financial results accrued at the end of this Special Merger Balance Sheet. The values thus obtained do not differ significantly from those that would have been obtained if accounting standards in force had been applied, according to which they are to be valued based on the best estimate of the amount receivable and payable, respectively, discounted at a rate that reflects the time value of money and the specific risks of the transaction estimated at the date of its addition to assets and liabilities, respectively. e) Foreign currency assets and liabilities Assets and liabilities denominated in foreign currencies are converted at the current exchange rates at the end of this special merger balance sheet. f) Allowances Deducted from assets: for unrecoverable tax credits. These provisions have been set based on the recoverability estimation of the Management, considering the current business plan of the Company and the statutory prescription periods. g) Balances with related parties Receivables and payables with related parties have been valued based on the conditions agreed upon between the involved parties, which do not differ from normal market conditions. h) Shareholders equity accounts As it was mentioned in Note 3.2, the equity accounts are express in constant currency till February 28, Movement after date were express at it nominal value. i) Income tax The Company has recognized the income tax charge by the deferred tax method, recognizing temporary differences between accounting and tax assets and liabilities measurements. To calculate deferred tax assets and liabilities, the tax rate expected to be in effect at the time of reversal or use has been applied to the temporary differences identified considering the regulations in effect at the time of issue of this special merger balance sheet. Management of the Company recognizes tax assets in its special merger balance sheet only to the extent that their realization is considered probable. 7

9 NOTE 3: (Continued) j) Minimum presumed income tax ( MPIT ) The Company is subject to the MPIT. Pursuant to this tax regime, the Company is required to pay the greater of the income tax or the MPIT. Any excess of the MPIT over the income tax may be carried forward and recognized as a tax credit against future income taxes payable over a 10-year period. The MPIT provision is calculated on an individual entity basis at the statutory asset tax rate of 1% and is based upon the taxable assets of each company as of the end of the year, as defined by Argentine law. k) Derivative financial instruments At the time of executing a foreign currency forward exchange contracts and whenever losses are generated, the Company receives cash flows from their principals and constitutes a guarantee of said operations. As a result, the Company recorded a credit accounting with the market and a liability to the principal. Likewise, the changes in the measurements of such contracts valued at their net realizable value or termination cost, as appropriate, produce the acknowledgement of a credit or liability with the Market and simultaneously a liability or credit with the principal. NOTE 4: BREAKDOWN OF MAIN BALANCE SHEET ACCOUNTS OF THE SPECIAL MERGER BALANCE SHEET The composition of the main headings of the present Special Merger Balance Sheet is as follows: Ps. a) Cash and Banks Cash Bank

10 NOTE 4: (Continued) Ps. b) Investments Current Mutual funds Non current Equity in affiliated (Exhibit C) c) Trade receivables Common Balances with companies under section 33 Law No 19,550 and related parties (Note 5) d) Other receivables Current Balances with companies under section 33 Law No 19,550 and related parties (Note 5) Advances to suppliers Rights on arbitral actions Guarantee deposits on derivative financial instruments Others Allowance for other receivables (75.054) Non Current Tax credits Deferred tax asset Balances with companies under section 33 Law No 19,550 and related parties (Note 5) Allowance for other receivables ( ) e) Accounts payable Suppliers

11 NOTE 4: (Continued) Ps. f) Financial Debts Bank overdrafts Financial loans Balances with companies under section 33 Law No 19,550 and related parties (Note 5) g) Salaries and social security payable Salaries and social securities h) Taxes payable Minimum presumed income tax, net of withholding and advances Income tax withholdings i) Other liabilities Balances with companies under section 33 Law No 19,550 and related parties (Note 5) Others

12 NOTE 5: BALANCES WITH COMPANIES UNDER SECTION 33 LAW No 19,550 AND RELATED PARTIES Other receivables Trade receivable Current Non current Financial debt Other liabilities Parent Company: AESEBA S.A Bodega Loma La Lata S.A Central Térmica Güemes S.A Central Térmica Loma de la Lata S.A Central Piedra Buena S.A Empresa Distribuidora y Comercizalizadora Norte S.A Hidroeléctrica Diamante S.A Hidroeléctrica Los Nihuiles S.A IEASA S.A Inversora Diamante S.A Inversora Ingentis S.A Inversora Nihuiles S.A Pampa Generación S.A Pampa Inversiones S.A Pampa Participaciones S.A Pampa Participaciones II S.A Petrolera Pampa S.A Powerco S.A Related Parties: Dolphin Finance S.A Transportadora de Gas del Sur S.A Total

13 NOTE 6: CAPITAL STOCK The breakdown of Shareholders equity is as follows: Concepts Ps. Capital stock Additional paid in capital Reserve for Directors options Legal reserve Retained earnings ( ) Total shareholders equity As of December 31, 2011, the Company s capital stock consists of 1,314,310,895 common shares in bookentry form with a face value of Ps. 1 each and each granting the right to one vote. Public Bid of Shares The Company s shares are listed for trading on the Buenos Aires Stock Exchange, forming part of the Merval Index. Furthermore, on August 5, 2009, the United States Securities and Exchange Commission ( SEC ) authorized the Company for the registration of American Depositary Shares ( ADSs ) representing 25 common shares each. On October 9, 2009, the Company started to market its ADSs on the New York Stock Exchange ( NYSE ). The listing of the ADSs with the NYSE is part of the Company s strategic plan to obtain an increase in the liquidity and volume of its shares. NOTE 7: DISTRIBUTION OF PROFITS a) Legal Reserve As required by the Law nº and corporate by-laws, 5% of profits have to be transferred to the Legal Reserve until 20% of capital is reached. 12

14 NOTE 7: (Continued) b) Dividends Under Law 25,063 enacted in December 1998, cash dividends or dividends in kind received by the Company from its subsidiaries or distributed in excess of retained taxable income at the end of the year previous to the date of payment or distribution, shall be withheld a 35% in a definite and single payment as income tax. The balance of retained earnings as of December 31, 1997, less dividends paid plus determined taxable income as from January 1, 1998, shall be considered retained taxable income for the purpose of this tax. c) Dividends in advance To preserve the Company s equity and mainly guard over the equitable treatment among shareholders, the Company has decided to implement a mechanism considered to be effective and efficient consisting in anticipating dividends which will compensate personal assets tax required to pay over tax authorities in its capacity of substitute taxpayer for such tax. Therefore, on December 3, 2010, the Company s Board of Directors resolved to anticipate dividends in cash under the terms of Argentine Commercial Companies Law for Ps. 18,111,204, which is equivalent to % to the face value of each outstanding share and which was ratified in the Shareholders Meeting held on April 14, Additionally, the dividend payment was realized on March 28, 2011, date on which the value obtained by the equity method was known and based on which personal assets tax should be paid. As of December 31, 2011, the Company s Board of Directors has not been able to implement this mechanism regarding the tax applicable as of that date, since the Company has no accumulated income sufficient to approve the anticipated dividends' amount. The Company is currently evaluating alternative mechanisms to recover the corresponding proportional amount from the shareholders covered by the tax. 13

15 NOTE 8: OPPORTUNITIES ASSIGNMENT AGREEMENT - PURCHASE OPTIONS As approved by the Shareholders Meeting of September 16, 2006, on September 27, 2006 the Company signed an Opportunities Assignment Agreement, whereby certain executives were committed to provide the Company with potential business opportunities encompassed by the Company s investment guidelines, exceeding US$ 5 million. In consideration, the Company granted to those executives purchase options for up to 20% of capital, by virtue of the purchase option agreements signed with such executives on September 27, CNV, through Resolution No. 15,447 dated August 17, 2006, approved the issuance of the purchase options representing 20% of the Company s capital stock, conditioning that authorization to certain actions that were fulfilled on October 9, The Opportunities Assignment and Purchase Option agreements were modified by means of the agreements of September 28, 2007 and June 6, 2008, to the effects of: (i) reduce the rights of the executives under the purchase options, waiving their right to subscribe whenever the Company s capital is increased an additional number of common stock which allows them at any time hold 20% of the capital stock of the Company, as established in the purchase option agreements; and (ii) provide that the 20% limit, applicable to the transfer of purchase options that had not become exercisable stock options in favor of transferees of unexercised stock options shall not apply with respect to any legal entity that is controlled in a 100% by an executive. For the original agreement and subsequent amendments, the Company issued stock options that grant the right to subscribe a 381,548,560 at different exercise prices. Regarding these options, a compensation expense with a credit to an equity reserve was recognized ratably over the effective term of the Opportunities Assignment Agreement amounts to Ps. 35,3 million. On April 16, 2009, in accordance with the resolution of the Ordinary and Extraordinary Shareholders Meeting of April 8, 2009 and the report of the Company s Audit Committee, the Company and certain of its Executives executed an amendment to the Opportunities Assignment Agreement, which extended the term of the Agreement by five years until September 27, In addition, the Company signed a Restated Warrant Agreement with each of the relevant executives amending certain terms of the Warrant Agreements, including the exercise date of the Warrants and the exercise price, which was set at US$ 0.27 per warrant. In accordance with the amendment, one-fifth of the Warrants may be exercised per year as from September 28 to September 28, 2014, and will remain in effect for fifteen years from the date of issuance. 14

16 NOTE 8: (Continued) Considering that TR does not set forth how the effects of the amendments made to the contracts mentioned above should be recognized in the financial statements, the Company has used the provisions set forth in IFRS and United States Generally Accepted Accounting Principles as a reference framework. To this effect, and according to the provisions of both accounting frameworks, when the amendments increase the market value of the contract, this increase should be recognized in profit and loss in the remaining effective period. The increase in the market value of the contracts should be determined as the difference between the market value of the contract prior and immediately after the amendment. Therefore, this calculation has been carried out following the Black-Scholes valuation model and resulted in Ps million of additional compensation expense. Since the amendments extended the effective term of the contract to five years, the Company decided to recognize the original cost until September 28, 2009 and as from that moment recognize the additional cost mentioned before in the five-year term from September 29, 2009 to September 28, Additionally, on August 3, 2009, the Company received a communication from the Executives by which they stated that aiming to emphasizing even more their commitment with the Company s sustained growth, each of them has personally and irrevocably waived their right to exercise any option accrued in their favor (or their transferees) and to receive Company shares of common stock underlying such options before September 28, Consequently, none of the Executives will exercise options accrued and received through September 28, 2012, before September 28, As of December 31, 2011 the equity reserve amounts to Ps million. NOTA 9: GRANTED GUARANTEES Financing of the Loma de la Lata s Expansion Project Corporate bonds issued by Central Térmica Loma de la Lata S.A. ( CTLL ) are guaranteed by Pampa (its controlling shareholder) under a surety bond executed with Deutsche Bank S.A. as Security Agent, joint and several obligor and main debtor of CTLL s payment obligations under the Corporate bonds until the plant s cycle closing Conclusion Date. Furthermore, Corporate bonds are guaranteed with a security interest on CTLL s shares and receivables against the company, as well as other guarantees granted by CTLL. 15

17 NOTE 9: (Continued) Financing of the acquisition of participation in INNISA and INDISA. In October 2006, the Company acquired shares of Inversora Nihuiles and Inversora Diamante, which were partially financed by the seller, Banco de Galicia y Buenos Aires S.A. ( Banco Galicia ) for US$ 4.9 million. This loan accrues interest at 3% and matures on June 7, On May 16, 2011, the Company agreed with Banco Galicia on the renewal of the stated financing until March 7, 2012 for an amount of US$ 5,515,433 at an annual interest rate of 4%. On March 7, 2012, the Company has cancelled all its capital stock plus interest accrued from such financing. Due to such financing, the Company created a first pledge in favor of Banco de Galicia on the shares of Inversora Nihuiles and Inversora Diamante that were acquired from Banco de Galicia. Other guarantees As of December 31, 2011, Other guarantees comprise the following items: 12/31/2011 Regulatory required guarantees 1,400,000 Guarantees required on account of subsidiaries financing 87,625,500 Other guarantees 14,074,080 Total 103,099,580 NOTE 10: CLAIM FOR MINIMUM PRESUMED INCOME TAX Tax refund claim On September 28, 2010 a tax refund claim was filed before the Tax Office Federal Administration of Public Revenue (Dirección General Impositiva Administración Federal de Ingresos Públicos, or AFIP for its Spanish acronym) regarding the minimum presumed income tax for the fiscal years 2008 and This claim seeks the refund of Ps. 6,050,136 and Ps. 8,197,357 corresponding to the fiscal years 2008 and 2009, respectively, including the recovery of payments recorded and the reversal of the payment made on account of the offsetting of several fiscal credits. 16

18 NOTE 10: (Continued) As AFIP didn t answer the claim, on December 30, 2010 the Company brought the tax refund claim before a National First Instance Administrative Litigation Court and simultaneously sought interim injunctive relief so that AFIP may refrain from demanding payment and/or instituting tax execution proceedings and/or imposing measures against the Company. On May 10, 2011, the Court passed judgment disallowing the granting of the interim injunctive relief requested by the Company, and the Company appealed the Court decision. Finally, on August 3, 2011, the Chamber of Appeals upheld the ruling by the First Instance Court regarding the dismissal of the injunctive relief. Declaratory relief On April 25, 2011 a petition for declaratory relief was filed pursuant to Section 322 of the Federal Civil and Commercial Procedural Code against AFIP DGI in order to obtain assurance as to the application of the minimum presumed income tax for the fiscal year 2010 based on the decision by the Supreme Court in re Hermitage passed on June 15, In this established precedent, the Court had declared this tax unconstitutional since it may be unreasonable under certain circumstances and since it breaches the capacity to pay principle. Furthermore, the Company requested the granting of interim injunctive relief so that AFIP may refrain from demanding the payment or instituting tax execution proceedings. On June 30, 2011, the Court hearing the case decided to disallow the interim injunctive relief, which decision was appealed by the Company on August 2. Finally, on September 26, 2011, the Company was served notice of the Chamber decision upholding the disallowance of the injunctive relief. As of December 31, 2011, the Company held a provision for the minimum presumed income tax for fiscal year 2010 amounting to Ps. 9,518,278, including compensatory interest. Both the tax refund claim and the declaratory relief brought by the Company are still pending in Court. Despite the denial of injunctive relief, the Company expects a favorable outcome regarding the substance of the claim. 17

19 Investments in other Companies As of December 31, 2011 Exhibit C Denomination and characteristics of the securities Class Amount (1) Principal activity Financial statement Information on the issuer Ordinary Income (Loss) shares of the period Shareholders equity % of participation Bodega Loma La Lata S.A. Ordinary Operative ( ) ,99 Central Térmica Güemes S.A. Ordinary Operative ,58 Central Térmica Loma de la Lata S.A. Ordinary Operative ( ) ,99 Inversora Piedra Buena S.A. Ordinary Holding ,00 EPCA S.A. Ordinary Holding ( ) ,00 IEASA S.A. Ordinary Holding ( ) ,01 Preferred Inversora Diamante S.A. Ordinary Holding ,60 Inversora Ingentis S.A. Ordinary Holding ,00 Inversora Nihuiles S.A. Ordinary Holding ,27 Pampa Generación S.A. Ordinary Operative ,00 Pampa Inversiones S.A. Ordinary Holding ( ) ,00 Pampa Participaciones S.A. Ordinary Holding ,99 Pampa Participaciones II S.A. Ordinary Holding (46.888) ,87 Pampa Real Estate S.A. Ordinary Real state investment ,99 Petrolera Pampa S.A. Ordinary Holding ( ) ,99 Powerco S.A. Ordinary Holding ( ) ,99 Transelec Argentina S.A. Ordinary Holding ( ) ,02 (1) Corresponding to value 1 for both ordinary and preferred class. 18

20 Investments in other Companies As of December 31, 2011 Exhibit C (Continued) Equity Method Total Society Ordinary Preferred Adjustments (1) permanent Goodwill investment Bodega Loma La Lata S.A Central Térmica Güemes S.A Central Térmica Loma de la Lata S.A Inversora Piedra Buena S.A EPCA S.A IEASA S.A Inversora Diamante S.A ( ) Inversora Ingentis S.A Inversora Nihuiles S.A ( ) ( ) Pampa Generación S.A Pampa Inversiones S.A Pampa Participaciones S.A ( ) Pampa Participaciones II S.A Pampa Real Estate S.A Petrolera Pampa S.A Powerco S.A Transelec Argentina S.A ( ) ( ) Others Advances for acquisition of investment Total (1) Mainly includes adjustments for: Net assets identified on acquisition of subsidiaries and impairment where applicable, Repurchase of Negotiable Obligations issued by other companies Article 33 of Law No. 19,550 and others. 19

21 SPECIAL REPORT ON THE SPECIAL MERGER BALANCE SHEET To the Shareholders, President and Directors of Pampa Energía S.A. Legal address: Ortiz de Ocampo Building No. 4 City of Buenos Aires Tax Code: We have reviewed the special merger balance sheet and its complementary notes and exhibit as of December 31, 2011 of Pampa Energía S.A. ( Pampa Energía or the Company ), which has been prepared to be used in case that the Shareholders' Meeting decides on and approves the balances of the assets and liabilities to be merged with its subsidiaries, by means of the merger process with Inversora Ingentis S.A., Pampa Generación S.A. and Powerco S.A. The special merger balance sheet has been prepared on the basis of the information included in the financial statements of Pampa Energía S.A., which have been examined by us and on which we issued our audit report dated March 9, 2012 with the following qualification for uncertainty: As indicated in Note 3.4 c) to this special merger balance sheet (including the same information mentioned in Note 2.f to the consolidated financial statements of the Company, referred to in our audit report mentioned above), Pampa Energía has made projections to be able to determine the recoverable value of the fixed assets and intangible assets corresponding to Edenor, Transener and Transba, based on its estimate of the final outcome of the restoration of rates requested by these subsidiaries. Cash flows and actual future results may differ from those estimates and assessments made by management at the date that these financial statements were prepared. We are not able to foresee if the premises used by Management to prepare those projections will materialize in the future and, consequently, if the recoverable value of non-current assets corresponding to Edenor, Transener and Transba will exceed their respective net carrying value. The preparation and issuance of this special merger balance sheet are the responsibility of the Company. 2. Our work consisted in: comparing the special merger balance sheet as of December 31, 2011 of Pampa Energía with the Company's financial statements as of December 31, As a result of our review, we report that: the balances in the special merger balance sheet as of December 31, 2011 of Pampa Energía coincide with those included in the financial statements of the Company as of December 31, 2011, on which we issued our audit report with the qualification for uncertainty mentioned in paragraph 1., dated March 9, In accordance with current regulations, we report that: a) the financial statements of Pampa Energía considered for the preparation of the special merger balance sheet are transcribed into the Inventory and Balance Sheet book and as regards those matters that are within our competence, they are in compliance with the provisions of the Commercial Companies Law and pertinent resolutions of the National Securities Commission; b) as of December 31, 2011, there is no debt accrued in favor of the Argentine Integrated Social Security System, as shown by the Company's accounting records. City of Buenos Aires, March 9, 2012 PRICE WATERHOUSE & CO. S.R.L. Andrés Suárez (Partner)