LatAm Utilities. Weak Hydrology, Tax Hike Likely in Chile, and ECL Upgrade on Valuation

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1 Industry Comment Thursday, September 5, 213, Pre-Market 1 LatAm Utilities Weak Hydrology, Tax Hike Likely in Chile, and ECL Upgrade on Valuation Ezequiel Fernández López (Scotia Corredores de Bolsa Chile) ezequiel.fernandez@scotiabank.cl Event August power sector data is out for most relevant LatAm systems. More importantly, we are adjusting our price targets due to the likely corporate tax hike in Chile (to 25% from 2% currently). ScotiaView Analyst Link Implications In August, once more Peru outperformed its peers in terms of generation growth. Chile and Colombia normalized, while Brazil posted a new 4% increase in volumes. Spot prices across the continent continue to be high for historical records, on the back of low hydro output. We saw positive signs for ECL, consistent with quarterly EBITDA of US$65M (up 27% QOQ). We are trimming our price target to CLP 8 on the consensus Chile tax hike, but we are upgrading to SP on valuation. No material changes in estimates for ENDESA. However, we are revising our price target to CLP 74 on the higher expected taxes. ENERSIS lower exposure to Chile and latest good news for its distribution units cushion the blow, price target unchanged. AESGENER estimates unchanged, low hydrology in Chile confirms the solid outlook. Reduced price target to CLP 36, also on higher taxes. COLBUN saw negative hydro output readings both in July and August. We are lowering 213 estimates and cutting our price target to CLP 14. Recommendation Our order of preference remains unchanged, overweight AESGENER (SO, combining attractive multiples and solid expansion plans) and ENERSIS (SO, record-cheap implied valuation for distributors). Universe of Coverage Price Rating Risk 1-Yr ROR AESGENER-SN CLP SO Medium % AGUAS-A-SN CLP SP Low % COLBUN-SN CLP SP High % ECL-SN CLP SP Medium 8. 1,946.2% ENDESA-SN CLP SP Medium 74. 1,18.7% ENERSIS-SN CLP SO Medium % For Reg AC Certification and important disclosures see Appendix A of this report. Analysts employed by non-u.s. affiliates are not registered/qualified as research analysts with FINRA in the U.S.

2 2 Weak Hydrology Across LatAm All LatAm countries posted healthy growth rates in generation during August, with the exception of Colombia (2.2% growth). As usual, Peru showed the highest monthly growth. Brazil surprised with its second consecutive generation growth reading above 4%. Spot prices remained high during August due to low hydrology across the continent. Spot markets continued to mark readings above contract prices in Chile, Colombia, and Argentina. With two months of Q3 operational data points already baked in, we see numbers as positive for ECL (thermal), neutral for AESGENER (thermal) and ENDESA (mixed), while negative for COLBUN (hydro). July electricity demand (reported with one-month lag for almost all countries) was auspicious for ENERSIS distribution units. We expect ECL to get quarterly EBITDA back to normal levels, ~US$65 million. Coal generation was solid, gas replaced diesel, and spot purchases should be quite lower than in Q2, virtually all good news. On valuation and a decent Q3 in the making, we are upgrading ECL to Sector Perform (despite the tax hike related price cut). Exhibit 1 LatAm Generation Stats Power Stats - August 213 Brazil Chile SIC Chile SING Colombia Peru Argentina ** Generation, GW 44,288 4,359 1,458 5,26 3,355 11,545 YoY, % 4.3% 4.1% 2.5% 2.2% 5.3%. Hydro Mix, % 79% 3 % 73% 4 32% Contract Prices, US$ per MW * ~55 ~6 Spot Price, US$ per MW Demand Growth YoY, % ** 5.1% 5.8% 8.8% 3.4% 7.1%.8% * Contract prices in Chile reported with a 2-3 month lag. ** Latest available data July 213 Source: CDEC SIC, CDEC SING, ONS, CCEE, XM, COES, MEM, Scotiabank GBM. ENDESA posted hydro output somewhat above our expectations in the SIC system during July and August, while Colombia numbers disappointed. Although this was virtually neutral at the EBITDA level, we believe it is a mild positive as the Chilean operations carry a fuller weight into ENDESA bottom line. With respect to ENERSIS, and in addition to the ENDESA changes, we saw higher-than-expected growth in electricity demand across the continent, especially in Brazil (+5.1% in July). Exhibit 2 Sector Valuation Summary Company Price, CLP Price Target, CLP Rating Mkt Cap, US$b ADTV 6m, US$m EV EBITDA PE 214E 213E 214E 213E 214E Div Yield ENDESA SP % ECL SP % COLBUN SP % AESGENER SO % AGUAS/A SP % ENERSIS SO % TOTAL % Source: Reuters, Company reports, Scotiabank GBM estimates.

3 3 AESGENER data came largely in line with our estimates. The company kept diesel generation in the SIC system to a minimum, posted healthy coal output in the SING system, and delivered solid gas generation in Argentina. Hydro output in Chivor (Colombia) continued to be soft as expected. The negative news came for COLBUN, which during July and August saw very low hydro outputs and diesel making up more than 13% in the generation mix. After confirming that August rains have only partially helped Chile's SIC dams and that the situation looks still very complicated, we have trimmed our 213 EBITDA estimate to US$293M, down from US$361M (both metrics adjusted for the Nehuenco II incident payment). On the positive side, COLBUN should start filling the reservoir of its 316MW Angostura hydro project in September. We expect Angostura to start dispatching energy under testing mode sometime in Q4/13. Exhibit 3 Chilean Generators Expansion Plans All figures adjusted by ownership AESGENER ENDESA COLBUN ECL Current Capacity, MW 4,776 1,936 2,963 2,57 % Hydro 27% 54% 43% % Current Base Capacity, MW 3,929 9,636 2,382 1,743 Projects Under Construction, MW % of total capacity 15.4% 1.% 1.7%.% % of base capacity 18.7% 1.1% 13.3%.% Calendar, MW yr CAGR in Base Capacity 3.5%.2% 2.5%.% Source: Company reports, Scotiabank estimates. Exhibit 4 Main LatAm Countries* Demand, GW Exhibit 5 Main LatAm Countries* Hydro Share, % 1, Generation, GW 1% 1% 8, 8% 8% 6, 4, 4% 4% 2, 2% % 2% -2, -2% % * Argentina + Brazil + Chile + Colombia + Peru Source: CDEC, XM, CAMMESA, ONS, COES * Argentina + Brazil + Chile + Colombia + Peru Source: CDEC, XM, CAMMESA, ONS, COES

4 4 Chile Corporate Tax Increase to 25% Looms on the Horizon Ms. Michelle Bachelet, the consensus president for Chile in 214, has repeatedly announced that the government plans to undertake a tax reform that includes a hike in corporate taxes. An increase to 25% from the current 2% now seems the base case scenario. We expect the move to be carried in a five-year window, starting in 214 and increasing 1 bp per year. The chances of Bachelet not winning now seem very, very slim, according to experts. We invite you to check the replay of yesterday`s Scotiabank conference call with Dr. Patricio Navia on the matter at +1-(416) Ms. Bachelet seems very serious and committed about the tax reform, as it would pave the way for one of her main political objectives: facilitating universal access to tertiary and university education in Chile. Bachelet s party, the Concertación, needs to get 5%+1 of the votes in the legislative election to get the simple majority in Congress and Senate. This simple majority would grant the tax reform approval without any negotiation with other political parties. The legislative elections are scheduled to take place at the same time as the presidential one, November 17, 213. At this point, getting the tax reform approved for the Concertación does not look difficult at all. We are incorporating the new corporate tax scenario in our modelling, which has lowered our longer-term EPS estimates and our price targets as well. Naturally, names most affected by the change are COLBUN, AGUAS ANDINAS, and ECL, which are pure-play Chile companies. However, the model interplays between leverage, discount rate structure, and timing of cash flows also play a part in the adjustment. We have not adjusted our ENERSIS price target as the revision was minor, given its relatively lower exposure to Chile. Besides, we are growing progressively more confident on the performance of its distribution units. Firstly, the readings on electricity demand have been very good despite some macro concerns. Secondly, we have picked up more positive signs in Brazil regarding the distribution units. Renewal processes for Brazilian distribution concessions seem to be progressing and delayed payments related to unrecognized electricity costs are also being addressed in better fashion than what we anticipated. Exhibit 6 Price Target Revision ENERSIS ENDESA AESGENER COLBUN ECL AGUAS/A Old Price Target New Price Target Chile as % of Price Target 42% 59% 65% 1% 1% 1% Source: Reuters, Company reports, Scotiabank estimates.

5 5 ECL: Upgrading to Sector Perform on Valuation and a Decent Q3 in the Making Operational data in July and August was favourable for ECL. We believe Q3 EBITDA should reach US$65M, up from US$51M in Q2 and in line with what we consider normal course of operations. Of note, we expect ECL s main gas facility to go offline for a week in September. We also expect Q3 coal generation to increase almost 1GW sequentially and gas output to reach 4GW, as the Mejillones LNG terminal maintenance is now over. Both higher coal and gas output should almost halve needed purchases in the spot market. We believe that EBITDA should trend to US$27 million in 214, as the company wraps up environmental works in the older coal plants. In combination with better performance from the CTA/CTH plants, this should lead to higher coal output and more reliable performance. Regarding the recent signing of the re-gasification contract, we think it is a positive as it provides certainty regarding access to the Mejillones LNG terminal. However, we believe that this was not in question. Moreover, it is not ideal that the pricing of the service remains not public, since GDF Suez (ECL's controller) is the owner of Mejillones. Although the committed gas quantities seem somewhat low to cover the needs of the EMEL contract beyond 216, we believe the future maturation of some unregulated contracts mitigates the risk of being over-contracted for the long term. What would make us turn more positive in ECL? In the absence of expansion plans due to mining projects weakness, mainly a material dividend increase. We believe that capex should be sensibly lower than D&A charges going forward. Close to 25% of ECL s capacity (diesel and some gas units) are rarely operational, implying limited maintenance needs. This would highlight, despite the weak bottom line that ECL has shown in the last two year, that cash flows could be significantly higher than net income. On this ground, ECL might be able increase distributions after 214, when environmental capex subsides. Finally, a comment on Henry Hub prices and the EMEL contract (~2% of sales). We believe that increasing Henry Hub prices offer some upside to ECL shares. This could sound counterintuitive, as ECL would pay more for its gas provisioning. However, the EMEL indexation formula (which excludes gasification, transport, and re-gasification costs) makes revenue per MW rise higher than total gas provisioning cost on Henry Hub prices increases. Our commodities team maintains a bullish view on HH prices for 214. The approval of gas exports in the United States should lead to tighter demand-supply balance, and we expect HH prices to Exhibit 7 Chilean Generators Benchmark 212 ECL ENDESA AESGENER COLBUN GUACOLDA Revs per MW, US$ Fuel Cost per MW, US$ Core Profit per MW, US$ Sales, GW 9,174 59,2 24,595 11,389 4,524 Core Profit, US$ million 437 2, Net Opex, US$ million * per MW, US$ SG&A, US$ million per MW, US$ EBITDA, US$ million 234 1, EBITDA per MW, US$ D&A, US$ million per MW, US$ EBIT, US$ million 99 1, Source: Company reports, Scotiabank GBM estimates. stand above US$4. per mmbtu, at least an 11% increase from current prices.

6 Mar-12 May-12 Sep-12 Nov-12 Mar-13 May-13 Jun-11 Aug-11 Dec-11 Feb-12 Jun-12 Aug-12 Dec-12 Feb-13 Jun-13 Ago-13 6 AESGENER OPERATIONAL STATS Exhibit 8 AESGENER Chile SIC Output, GW 1, Hydro Coal Gas Diesel Exhibit 9 AESGENER Chile SING Coal Output, GW Source: CDEC-SIC Source: CDEC-SING Exhibit 1 AESGENER Argentina Gas Output, GW Exhibit 11 AESGENER Colombia Hydro Output, GW Source: CAMMESA Source: XM.com Exhibit 12 AESGENER 1H/13 EBITDA Mix Colombia; 3% Chile SIC; 3 Argentina ; 11% Chile SING; 23% Source: Company Reports

7 Mar-12 May-12 Sep-12 Nov-12 Mar-13 May-13 Mar-12 May-12 Sep-12 Nov-12 Mar-13 May-13 Mar-12 May-12 Sep-12 Nov-12 Mar-13 May-13 7 ENDESA OPERATIONAL STATS Exhibit 13 ENDESA Output in Chile, GW 2,5 Hydro Coal Gas Others 2, 1,5 1, 5 Exhibit 14 ENDESA Output in Colombia, GW 1,6 Hydro Thermal 1,4 1,2 1, Source: CDEC-SIC, CDEC-SING Source: XM Exhibit 15 ENDESA Output in Peru, GW 1, Hydro Thermal Exhibit 16 ENDESA Output in Argentina, GW 1,4 Hydro Thermal 1,2 1, Source: COES Source: CAMMESA Exhibit 17 ENDESA H1/13 EBITDA* Mix Brasil 25% Chile 39% Argentina 3% Peru 15% Colombia 18% Source: Company reports. *Ownership Adjusted EBITDA.

8 Mar-12 May-12 Sep-12 Nov-12 Mar-13 May-13 Jun-9 Dec-9 Jun-1 Dec-1 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Jan-1 Jul-1 8 COLBUN OPERATIONAL STATS (operates solely in the Chile SIC system) Exhibit 18 COLBUN Generation, GW Exhibit 19 COLBUN Hydro Generation, GW 1,4 1,2 Hydro Gas Coal Diesel 5 4 Dams Run-of-the-River 1, Source: CDEC SIC. Source: CDEC SIC. ECL OPERATIONAL STATS (operates solely in the Chile SING system) Exhibit 2 COLBUN LTM EV EBITDA 1,2 Coal Gas Diesel 1, 8 Exhibit 21 ECL Relevant Commodity Prices Coal, US$ per Tonne HH, US$ per mmbtu 1 Source: CDEC SING. Source: Bloomberg

9 Mar-11 May-11 Sep-11 Nov-11 Mar-12 May-12 Sep-12 Nov-12 Mar-13 May-13 9 ANNEX A CHILE SIC Metrics Exhibit A.1 SIC Generation, GW Exhibit A.2 SIC Energy Prices, US$ per MW 7,5 Generation, GW 15% 3 6, 12% 25 4,5 9% 2 3, ,5 3% % 5 Spot, US/MW Contract US$/MW Source: CDEC SIC. Source: CDEC SIC, CNE. Contract prices reported with lag. Exhibit A.3 SIC Hydro Share, % Exhibit A.4 SIC Demand, GW 1% 6, 12% Demand, GW 8% 4,5 9% 3, 4% 2% 1,5 3% % % Source: CDEC SIC. Source: CDEC SIC. July latest available data.

10 Mar-11 May-11 Sep-11 Nov-11 Mar-12 May-12 Sep-12 Nov-12 Mar-13 May-13 Mar-11 May-11 Sep-11 Nov-11 Mar-12 May-12 Sep-12 Nov-12 Mar-13 May-13 1 ANNEX B CHILE SING Metrics Exhibit B.1 SING Generation, GW Exhibit B.2 SING Energy Prices, US$ per MW 1,8 1,5 1, Generation, GW -6 15% 12% 9% 3% % -3% Spot, US$/MW Contract, US$/MW Source: CDEC SING. Source: CDEC SING, CNE. Contract prices reported with lag. Exhibit B.3 SING Coal Share, % Exhibit B.4 SING Demand, GW 1% 1,5 Demand, GW 15% 8% 1,2 12% 9 9% 4% 6 2% 3 3% % % Source: CDEC SING. Source: CDEC SING. latest available data.

11 11 ANNEX C Colombia Metrics Exhibit C.1 Colombia Generation, GW Exhibit C.2 Colombia Energy Prices, US$ per MW 6, 4,5 12% 9% Spot, US$/MW Contract, US$/MW 3, 1 1,5 3% 75 5 Generation, GW % 25-1,5-3% Source: XM Source: XM. Exhibit C.3 Colombia Hydro Share, % 1% Exhibit C.4 Colombia Demand, GW 6, 12% 8% 4,5 9% 3, 4% 1,5 3% 2% % Demand, GW % -1,5-3% Source: XM. Source: XM.

12 12 ANNEX D Brazil Metrics Exhibit D.1 Brazil Generation, GW Exhibit D.2 Brazil Energy Prices, US$ per MW 6, 5, 4, Generation, GW 12% 1% 8% 25 2 Spot, US$/MW 3, 15 2, 4% 1 1, 2% % 5-1, -2% Source: ONS Source: CCEE. Exhibit D.3 Brazil Hydro Share, % Exhibit D.4 Brazil Demand, GW 1% 8% 6, 5, 4, Demand, GW 12% 1% 8% 3, 4% 2, 4% 2% 1, 2% % % -1, -2% Source: ONS. Source: EPE, reported with a one-month lag.

13 Mar-11 May-11 Sep-11 Nov-11 Mar-12 May-12 Sep-12 Nov-12 Mar-13 May ANNEX E PERU Exhibit E.1 Peru Generation, GW Exhibit E.2 Peru Energy Prices, US$ per MW 4, 3,2 Generation, GW 1% 8% Spot, US$/MW Node, US$/MW 2,4 1,6 5% % 2 1 % Source: COES Source: COES, MEM. Node price reported with a lag. Exhibit E.3 Peru Hydro Share, % Exhibit E.3 Peru Demand, GW 1% 8% 3,5 3, 2,5 Demand, GW 14% 12% 1% 2, 8% 4% 1,5 1, 4% 2% 5 2% % % Source: COES Source: COES, reported with a one or two month lag.

14 May-11 Sep-11 May-12 Sep-12 May ANNEX F Argentina Metrics Exhibit F.1 Argentina Generation, GW Exhibit F.2 Argentina Avg. Spot Price, US$ per MW 15, 12, Generation, GW 15% 12% , 9% 1 6, 3, 3% 75 % 5-3, -3% 25-6, - Source: CAMMESA. July latest available data. Source: CAMMESA. July latest available data. Exhibit F.3 Argentina Hydro Share, % Exhibit F.4 Argentina Demand, GW 1% 8% 15, 12, 9, Demand, GW 15% 12% 9% 6, 4% 3, 3% 2% -3, % -3% % -6, - Source: CAMMESA. July latest available data. Source: CAMMESA. July latest available data.

15 15 ANNEX I AESGENER Financials Exhibit I.1 AESGENER Financials US$ millions 212 Q1/13 Q2/13 Q3/13E Q4/13E 213E 214E 215E Revenues 2, ,342 2,314 2,332 COGS -1, ,745-1,676-1,67 Gross Profit SG&A Other Results 1 1 EBIT Depreciation EBITDA Equity Investments Net Interest Charges Other Financial Results Pre Tax Income Income Tax Net Income Minority Interest Controller's Net Income # Shares, millions 8,7 8,7 8,7 8,7 8,7 8,7 8,7 8,7 EPS x 1,, US$ Dividends Payout on last year, % 97% 1% 65% DPS x 1,, US$ EBITDA Margin, % 28.4% 29.1% 26.8% 32.4% 34.7% 3.8% % EBIT Margin, % 19.2% 19.7% 17.2% 21.7% 25.2% 21.% 22.7% 23.5% Effective Tax Rate 41.1% 27.8% 32.7% 27.8% 26.3% 28.1% 27.4% 27.8% Net Margin, % 9.% 1.7% 7.2% 13.1% 16.2% 11.8% 13.4% 13.1% ROE, % 8.5% 7.2% 9.1% % 11.1% 12.% 11.2% ROIC, % 6.2% % % 7.8% 7.9% 7.7% Net Debt 1,975 1,92 1,962 2,223 2,189 2,189 2,458 2,669 Net Debt EBITDA 12m Capex FCF Source: Company reports, Scotiabank GBM estimates. Note: We are projecting Cochrane and Alto Maipo capex on a proportional consolidation basis.

16 16 ANNEX II ENDESA Financials Exhibit II.1 ENDESA Financials US$ millions 212 Q1/13 Q2/13 Q3/13E Q4/13E 213E 214E 215E Revenues 4,871 1,36 1,89 1,178 1,19 4,412 4,66 5,55 COGS -3, ,554-2,658-2,776 Gross Profit 1, ,857 1,949 2,279 SG&A EBIT 1, ,426 1,58 1,817 Amortization EBITA 1, ,434 1,516 1,825 Depreciation EBITDA 1, ,818 1,891 2,26 Equity Investments Net Interest Costs Other Financial Results Pre Tax Income 1, ,398 1,474 1,772 Income Tax Net Income ,54 1,258 Minority Interest Controller's Net Income # Shares, millions 8,22 8,22 8,22 8,22 8,22 8,22 8,22 8,22 EPS x 1,, US$ Revenues, YoY -2% -8% -1% -5% -14% -9% 4% 1% EBITDA, YoY -15% 9% 8% -8% -32% 4% 17% Diluted EPS, YoY -48% -1% 8% 45% 43% 2 17% 22% Gross Margin, % 35% 4% 37% 43% 48% 42% 42% 45% EBITDA Margin, % 35% 4% 35% 42% 47% 41% 41% 44% ROE, % 13% 13% 14% 14% 15% 15% 1 17% ROIC, % 1% 9% 1% 1% 11% 11% 11% 13% Net Debt EBITDA 12m Capex FCF ,148 Source: Company reports, Scotiabank GBM estimates.

17 17 ANNEX III ECL Financials Exhibit III.1 ECL Financials US$ millions 212 Q1/13 Q2/13E Q3/13E Q4/13E 213E 214E 215E Revenues 1, ,19 1,224 1,242 COGS ,45-1,51-1,61 Gross Profit SG&A Other Income -4 1 EBIT Amortization EBITA Depreciation EBITDA Other Results 26 Financial Income Interest Charge Other Pre Tax Income Corporate Tax Net Income Minority Investments Controller's Net Income # Shares, millions 1,56 1,56 1,56 1,56 1,56 1,56 1,56 1,56 EPS DPS Revenues, YoY -5.3% -2.4% 9.2% % 5.3% 2.9% 1.5% EBITDA, YoY -22.4% -2..% -.1% 71.7% 3.4% 1.2% 2.4% Diluted EPS, YoY -68.5% -64.4% NM NM -39.4% -47.8% 75.1% 1.7% Gross Margin, % % 8.1% 13.8% 12.2% 12.2% 14.2% 14. EBITDA Margin, % 2.8% 23.4% % 19.1% 2.4% 21.8% 22.% ROE, % 5.2% 5.3% % % 5.% 5.3% ROIC, % 5.3% 6.2% % % 6.% Net Debt Net Debt EBITDA, 12m CAPEX FCF Source: Company reports, Scotiabank GBM estimates.

18 18 ANNEX IV COLBUN Financials Exhibit IV.1 COLBUN Financials US$ million 212 Q1/13 Q2/13 Q3/13E Q4/13E 213E 214E 215E Revenues 1, ,733 1,828 1,91 COGS -1, ,512-1,32-1,344 Gross Profit SG&A EBIT Amortization 1 EBITA Depreciation EBITDA Equity Investments Net Interest Charge Other Results Pre Tax Income Income Tax Net Income Minority Interest Controller's Net Income # Shares, millions 17,536 17,536 17,536 17,536 17,536 17,536 17,536 17,536 EPS x 1,, US$ DPS x 1,, US$ Revenues, YoY 5.7% % 44.3% 14.% 23.% 5.5% 4.% EBITDA, YoY 38.7% % -49.3% -31.8% 3.2% Diluted EPS, YoY % N.M. N.M % -78.4% % 6.9% Gross Margin, % 16.% 19.1% 1.5% 8.9% 13.8% 12.8% 28.8% 29.3% EBITDA Margin, % 2.2% 24.3% % 17.2% 16.9% 34.1% 34.3% ROE, % 3.2% 2.9% 4.5% 4.8% 2.9% 2.7% 8.1% 8.3% ROIC, % 2.5% 3.3% 4.% 2.9% 2.2% 2.2% 6.8% 7.2% Net Debt 1,486 1,458 1,384 1,573 1,659 1,659 1,537 1,438 Net Debt / EBITDA, 12m CAPEX FCF Source: Company reports, Scotiabank GBM estimates.

19 19 ANNEX V ENERSIS Financials Exhibit V.1 ENERSIS Financials US$ millions 212 Q1/13 Q2/13 Q3/13E Q4/13E 213E 214E 215E Revenues 13,518 3,84 3,12 3,222 3,24 12,667 13,12 14,18 COGS -8,549-1,911-1,93-1,956-1,918-7,688-8,5-8,495 Gross Profit 4,969 1,173 1,217 1,266 1,323 4,979 5,52 5,524 SG&A -1, ,68-1,763-1,833 EBIT 3, ,911 3,289 3,69 Amortization 3, ,911 3,289 3,69 EBITA 3, ,136 3,39 3,44 Depreciation 3, ,136 3,39 3,44 EBITDA 4, ,23 3,896 3,9 4,319 Equity Investments Net Interest Costs Other Financial Results Pre Tax Income 2, ,82 3,152 3,64 Income Tax ,15 Net Income 1, ,956 2,196 2,499 Minority Interest 1, ,9 Controller's Net Income ,166 1,39 1,49 # Shares, millions 32,651 49,93 49,93 49,93 49,93 49,93 49,93 49,93 EPS x 1,, US$ peradr x 1,, US$ Revenues, YoY % -8% - -3% -8% - 3% 7% EBITDA, YoY -7% -1% -13% -5% -13% -4% % 11% Diluted EPS, YoY -19% -42% 83% -11% 3% % 12% 14% Gross Margin, % 37% 38% 39% 39% 41% 39% 39% 39% EBITDA Margin, % 3% 3% 31% 31% 32% 31% 3% 31% ROE, % 13% 12% 13% 12% 12% 12% 12% 13% ROIC, % 11% 1% 11% 1% 1% 1% 12% 12% Net Debt EBITDA 12m Capex 1, , ,27 1,511 1,481 FCF 1, ,446 1,77 Source: Company reports, Scotiabank GBM estimates.

20 2 Pertinent Data Rating Risk 1-Yr Target Key Data Year 1 Year 2 Year 3 Valuation AES Gener SA (AESGENER-SN) New 36. Old 37. Valuation: DCF explicit period 22, 8.9% WACC and 2.5% LT growth Key Risks to Price Target: Capex execution, regulatory risk, hydrology Aguas Andinas SA (AGUAS-A-SN) New 36. EPS14E: Old 375. EPS14E: 19.2 Valuation: DCF explicit period 22, 7.7% WACC and 2.% LT growth Key Risks to Price Target: Regulatory risk, hydrology Colbun SA (COLBUN-SN) New 14. EPS13E: US$.6 EPS14E: US$.17 Old 15. EPS13E: US$.8 EPS14E: US$.18 Valuation: DCF explicit period 22, 8.4% WACC and 2.5% LT growth Key Risks to Price Target: Hydrology, commodity prices, operational issues E.CL SA (ECL-SN) New SP 8. EPS13E: US$.3 EPS14E: US$.5 Old SU 85. EPS13E: US$.5 EPS14E: US$.7 Valuation: DCF explicit period 22, 8.3% WACC and 2.5% LT growth Key Risks to Price Target: Mining sector exposure, energy auctions, commodity prices Empresa Nacional de Electricidad SA (ENDESA-SN) New 74. EPS13E: US$.74 EPS14E: US$.87 Old 75. EPS13E: US$.69 EPS14E: US$.9 Valuation: SOTP DCF Model Key Risks to Price Target: Asset restructuring, hydrology, commodity exposure. ENERSIS SA (ENERSIS-SN) New EPS13E: US$.24 EPS14E: US$.27 Old EPS13E: US$.23 EPS14E: US$.26 Valuation: SOTP DCF Model, 1% Holding Discount Key Risks to Price Target: Regulatory, M&A, concession renewals, hydrology Source: Scotiabank GBM estimates. ScotiaView Analyst Link

21 21 Appendix A: Important Disclosures Company Ticker Disclosures (see legend below)* AES Gener SA AESGENER I, M8, V52 Aguas Andinas SA AGUAS-A M8 Colbun SA COLBUN M8 E.CL SA ECL M8 Empresa Nacional de Electricidad SA ENDESA M8 ENERSIS SA ENERSIS M8 I, Ezequiel Fernández López, certify that (1) the views expressed in this report in connection with securities or issuers that I analyze accurately reflect my personal views and (2) no part of my compensation was, is, or will be directly or indirectly, related to the specific recommendations or views expressed by me in this report This research report was prepared by employees of Scotia Capital Inc. and/or its affiliates who have the title of Analyst. All pricing of securities in reports is based on the closing price of the securities principal marketplace on the night before the publication date, unless otherwise explicitly stated. All Equity Research Analysts report to the Head of Equity Research. The Head of Equity Research reports to the Managing Director, Head of Institutional Equity Sales, Trading and Research, who is not and does not report to the Head of the Investment Banking Depart ment. Scotiabank, Global Banking and Markets has policies that are reasonably designed to prevent or control the sharing of material non-public information across internal information barriers, such as between Investment Banking and Research. The compensation of the research analyst who prepared this report is based on several factors, including but not limited to, the overall profitability of Scotiabank, Global Banking and Markets and the revenues generated from its various departments, including investment banking. Furthermore, the research analyst s compensation is charged as an expense to various Scotiabank, Global Banking and Mark ets departments, including investment banking. Research Analysts may not receive compensation from the companies they cover Non-U.S. analysts may not be associated persons of Scotia Capital (USA) Inc. and therefore may not be subject to NASD Rule 2711 restrictions on communications with subject company, public appearances and trading securities held by the analysts. For Scotiabank, Global Banking and Markets Research analyst standards and disclosure policies, please visit gbm.scotiabank.com/disclosures. Scotiabank, Global Banking and Markets Research, 4 King Street West, 33rd Floor, Toronto, Ontario, M5H 1H1. * Legend I M8 V52 Scotia Capital (USA) Inc. or its affiliates has received compensation for investment banking services in the past 12 months. Ezequiel Fernandez Lopez, an analyst, prepared this report and is an employee of the Research Department of Scotia Corredora de Bolsa Chile S.A. Scotia Capital Inc. has been retained by AES Gener as advisor in the sale of a 4% interest in the Alto Maipo project.

22 22 Definition of Scotiabank, Global Banking and Markets Equity Research Ratings & Risk Rankings We have a four-tiered rating system, with ratings of Focus Stock, Sector Outperform, Sector Perform, and Sector Underperform. Each analyst assigns a rating that is relative to his or her coverage universe or an index identified by the analyst that includes, but is not limited to, stocks covered by the analyst. Our risk ranking system provides transparency as to the underlying financial and operational risk of each stock covered. Stat istical and judgmental factors considered are: historical financial results, share price volatility, liquidity of the shares, credit ratings, analyst forecasts, consistency and predictability of earnings, EPS growth, dividends, cash flow from operations, and strength of balance sheet. The Director of Research and the S upervisory Analyst jointly make the final determination of all risk rankings. The rating assigned to each security covered in this report is based on the Scotiabank, Global Banking and Markets research a nalyst s 12-month view on the security. Analysts may sometimes express to traders, salespeople and certain clients their shorter-term views on these securities that differ from their 12-month view due to several factors, including but not limited to the inherent volatility of the marketplace. Ratings Risk Rankings Focus Stock (FS) The stock represents an analyst s best idea(s); stocks in this category are expected to significantly outperform the average 12-month total return of the analyst s coverage universe or an index identified by the analyst that includes, but is not limited to, stocks covered by the analyst. Sector Outperform (SO) The stock is expected to outperform the average 12-month total return of the analyst s coverage universe or an index identified by the analyst that includes, but is not limited to, stocks covered by the analyst. Sector Perform (SP) The stock is expected to perform approximately in line with the average 12- month total return of the analyst s coverage universe or an index identified by the analyst that includes, but is not limited to, stocks covered by the analyst. Sector Underperform (SU) The stock is expected to underperform the average 12-month total return of the analyst s coverage universe or an index identified by the analyst that includes, but is not limited to, stocks covered by the analyst. Other Ratings Tender Investors are guided to tender to the terms of the takeover offer. Under Review The rating has been temporarily placed under review, until sufficient information has been received and assessed by the analyst. Scotiabank, Global Banking and Markets Equity Research Ratings Distribution* Distribution by Ratings and Equity and Equity-Related Financings* Low Low financial and operational risk, high predictability of financial results, low stock volatility. Medium Moderate financial and operational risk, moderate predictability of financial results, moderate stock volatility. High High financial and/or operational risk, low predictability of financial results, high stock volatility. Speculative Exceptionally high financial and/or operational risk, exceptionally low predictability of financial results, exceptionally high stock volatility. For risk-tolerant investors only. Percentage of companies covered by Scotiabank, Global Banking and Markets Equity Research within each rating category. Percentage of companies within each rating category for which Scotiabank, Global Banking and Markets has undertaken an underwriting liability or has provided advice for a fee within the last 12 months. Source: Scotiabank GBM. For the purposes of the ratings distribution disclosure FINRA requires members who use a ratings system with terms different than buy, hold/neutral and sell, to equate their own ratings into these categories. Our Focus Stock, Sector Outperform, Sector Perform, and Sector Underperform ratings are based on the criteria above, but for this purpose could be equated to strong buy, buy, neutral and sell ratings, respectively.

23 23 General Disclosures This report has been prepared by analysts who are employed by the Research Department of Scotiabank, Global Banking and Markets. Scotiabank, together with Global Banking and Markets, is a marketing name for the global corporate and investment banking and capital markets businesses of The Bank of Nova Scotia and certain of its affiliates in the countries where they operate, including Scotia Capital Inc. All other trademarks are acknowledged as belonging to their respective owners and the display of such trademarks is for infor mational use only. Scotiabank, Global Banking and Markets Research produces research reports under a single marketing identity referred to as Globally-branded research under U.S. rules. This research is produced on a single global research platform with one set of rules which meet the most stringent standards set by regulators in the various jurisdictions in which the research reports are produced. 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