annual general shareholders meeting 2012

Ignacio S. GalánChairman & CEO

2

2011 in reviewDespite the complex environment, once again

Iberdrola has maintained its

Earnings

Dividends

Financial strength

Today we are the IBEX industrial company with better rating

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Since the start of the crisis, four years ago, Iberdrola is:

The only major European utility that has maintained its earnings and dividend

One of only two large cap IBEX stocks that have maintained their earnings and dividends

4

2011 operating environment: Spain

GDP

ElectricityDemand

+0.7%(-0.3% 4Q)

-2.1%

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2011 operating environment: Spain

High public deficits

Spanish economic imbalances:

Undermining of certain banking groups

Private sector debt burden

Highest unemployment rate in the EU

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2011 operating environment: Spain

Spanish economic strengths

World class companies in key sectors

International presence: Europe and Latam

Positive contribution from exports

Public debt below European average

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2011 operating environment: Spain

More competitive, open and liberalised

Opportunity to transform the economic model...

More oriented towards innovation and foreign markets

Investing more in productive economy and less in speculative activities

More sustainable

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2011 operating environment: Spain

Enhanced productivity… implementing reforms that enable:

Modernisation of labour and tax law

Greater social cohesion

Deleveraging by government, corporates and households

More efficient public spending

Enhanced productivity

Fostering a reindustrialisation process

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Regulatory stability

Resolution of the tariff deficit

2011 operating environment: Spain

The energy sector needs:

Almost 50% of the tariff corresponds to costs that are not related with power supply

The government needs to address the factors that generated the deficit

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2011 operating environment: UK

GDP

ElectricityDemand

+0.7%(-0.2% 4Q)

-4%

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Stability in the networks business

Distribution: current tariff framework stable until 2015

Transmission: current tariff framework stable until 2021

2011 operating environment: UK

Significant progress on the regulatory front

Subsea power linkScotland-England (420 km)

Line

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Ongoing progress on Electricity Market Reform (EMR)

Substitution of existing generation assets

Delivery of environmental targets

Security of supply

2011 operating environment: UK

Significant progress on the regulatory front

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GDP

ElectricityDemand

+1.7%

-0.8%

2011 operating environment: US

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2011 operating environment: US

Renewables business affected by:

Continuity in the networks business

Current tariff frameworks in New York and Maine stable until 2014

Regulation:

Low power prices due to emergence of new energy sources (shale gas)

Elimination of economic incentives to investment

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2011 operating environment:Mexico & Brazil

GDPMexico

+4%

GDPBrazil

+3.4%

Brazil

+2.7%

ElectricityDemand

Mexico

+5%ElectricityDemand

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2011 operating environment: Brazil

Supply points (mn) 2.3

ElectricityDistribution areas

Workforce

Elektro TOTALNeoenergia

•Sao Paulo•Mato Grosso do Sul

3,900

9.4

5,100

11.7

5 states

9,000

Capacity in operation and under

construction (MW)

_ 4,200* 4,200

•Rio Grande do Norte•Bahia•Pernambuco

* Includes 145 MW of Iberdrola wind power capacity in Brazil** 39%-consolidated

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2011 in review: Investment

Eur 8,200 mn of investments

Corporate investments: Eur 4,200 mn

Networks

Merger with Iberdrola Renovables

Organic growth: Eur 4,000 mn

Elektro acquisition (Brazil)

Generation

Renewables

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2011 in review: Spain

San Esteban hydro plant

Development of smart grids in Castellón, Bilbao, Valencia…

Extension of La Muela II, San Esteban and San Pedro

power stations

La Muela II hydro plant

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2011 in review: UK

NetworksEur 6,000 mn investment

programme approved by the regulator

Wind farms •Enlargement of Whitelee •Start-up of offshore wind farm

in the Irish Sea

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2011 in review: USA

Maine transmission line

Installation of smart meters in Maine

New wind farms in Washington, Pennsylvania, Ohio, Iowa and California

Manzana wind farm

(California)Lewiston substation (Maine)

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2011 in review: Brazil and Mexico

BrazilHydroelectric plants

Dardanelos hydro plant:

Mexico

La Venta III wind farm

La Venta III wind farm

•Dardanelos in operation•Start of construction at Belo Monte

and Telespires10 wind farms

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2011 results

Iberdrola maintained its results thanks to:

Geographically diversified business model

Weight of the regulated and renewable businesses

Efficiency improvements

Maintaining financial strength

EBITDA by business

Renewables

Liberalised(Generation)

51%

Regulated(Networks)19%

30%

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2011 results

Total installed capacity of over 46,000 MW

Installed capacity, 2011

30%

21%7%

10%

29% 3%

Hydroelectric

Wind

Nuclear

Cogeneration

Gas

Coal

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2011 results

Group output exceeded 145,000 GWh

Output by country

44%

28%

16%

11%1%

United States

Spain

Latin America

United Kingdom

Output by technology

20%

12%

17%

39%

9% 3%

Hydroelectric

Wind

Nuclear

Cogeneration

Gas

Coal

Carbon emissions were cut by 20% vs. 2007 to reachhalf the average of European utilities

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2011 results

Energy distributed up 2.3% to 205,000 GWh …

200,329

204,887+2.3%

2010 2011

Energy distributed (GWh)

… with higher quality of service (best performance ever recorded in Spain)

Energy distributed by region/country

United States

United Kingdom

Spain

47%

17%

15%

20%Latin America

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2011 results

Revenue rose 4% to Eur 32,000 mn…

Revenue by region/country

11,645

12,025+3.3%

2010 2011

Gross Margin (Eur mn)

...while Gross Margin exceeded Eur 12,000 mn

United States

United Kingdom

Spain

48%

27%

10%

14%1%Latin America

Other

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2011 results

Record EBITDA...

7,5287,650+1.6%

2010 2011

EBITDA (Eur mn)

… despite an increase in other taxes (+22%)

29%

50%

19%2%

EBITDA by business

Renewables

Regulated

Deregulated

Other

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2011 results

Recurring Net Profit rose by 1.2%

2,582

2,614+1.2%

2010 2011

Recurring Net Profit (€ mn

Net profit was Eur 2,805 mn despite Eur 400 mn of non-recurring provisions and lower divestments (down Eur 226 mn)

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5,718

6,047+5.8%

2010 2011

Operating cash flow (Eur mn)

2011 resultsOperating cash flow over

Eur 6,000 mn (+5.8%) for the first time

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2011 results

Average debt maturity extended to 6.3 years

Eur mn

2,778

4,0513,532

13,874

2015 2017 and beyond**

4,369

20162013 2014

Maturity profileof Iberdrola's debt*

6.26.3

2010 2011

Average debt maturity

Liquidity reaches nearly Eur 10,000 mn and covers financing requirements for 30 months (average interest rate: 4.5%)

2012

* Excludes drawn down credit lines** Includes outstanding promissory notes

1,880

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2011 resultsProposed shareholder remuneration of at least

€0.331/ share…

€0.146/share

€0.03/share

Dividend distributed in January*:

Dividend to be distributed in July**:

€0.15/share

* Purchase price of the December Scrip Dividend programme ** Pending shareholder approval

€0.005/shareGSM attendance bonus:

… in line with the previous year

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Year 2011

Iberdrola, an engine for economic growth

Over Eur 8,200 mn in investments

Over Eur 5,300 mn in purchases

Tens of thousands of jobs created or maintained at suppliers

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5,800 additional employees in 2011

Average age under 43

Half of the workforce holds a university degree

Iberdrola creates jobs, with a team of 33,000 professionals

Increasing presence of women to reach 23% of our workforce

Year 2011

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Strong commitment to training…

1,500 internal promotions

Geographic mobility and career development opportunities

700 apprentices and trainees

… providing 1,200,000 training hours in 2011 (+22%)

Year 2011

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Fundación Iberdrola: supporting education, art, culture and biodiversity

Cristo de la Misericordia Hinojosa de Duero chapel (Salamanca)

Cristo de la Misericordia Hinojosa de Duero chapel (Salamanca)

Scholarship programme in universities of Spain,

the UK and US

Atlantic Romanesque Planin Castile and León

and Portugal

Capercaillie Protection schemes in Spain and

Scotland

Scholarship award ceremony 2011

Year 2011

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Environmental investments of Eur 1,300 mn

Emission of 40 million tonnes of CO2 avoided

More efficient waste management

Long-standing commitment to the environment

Iberdrola, continued presence in the Dow Jones Sustainability and FTSE4Good indices

Year 2011

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Iberdrola invested Eur 140 million in innovation

Through Perseo Iberdrola has allocated over Eur 23 mn to energy sector research

Marine energy and smart grids

EU Seventh Framework Programme

Year 2011

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Year 2011

Supporting paralympic sports

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Corporate governance

Iberdrola, at the forefront of best practices

Regulations of the Board of Directors

Corporate policies

By-Laws

Regulations for the General Shareholders' Meeting

Code of Ethics and creation of the Ethics Mail Boxes

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Iberdrola, a long-term industrial project creating wealth and jobs…

… and a company that is increasinglysustainable, responsible and committed

Ignacio S. GalánChairman & CEO