Following the publication of Royal Decree-Law 9/2013, of 12 July, by which urgent measures have been adopted to ensure the financial stability of the electricity system, the method of remuneration for electricity transmission activity has been fixed specifically for the period between the coming into force of this Royal Decree-law until 31 December, 2013 and for the year 2014.

Based on initial estimates made by the Company, the remuneration corresponding to the 2013 of transmission activity, which was set at a bit over €1.62 billion in February this year, will be reduced by an amount of approximately 100 million euros. In 2014, the transmission tariff will be around €1.6 billion.

The new remuneration shall be definitive for both fiscal years, notwithstanding that, in turn, the amounts relating to the availability incentive, investment remuneration, and operation and maintenance associated with unique investment shall be assessed and approved.

Shortly, the Ministry of Industry, Energy and Tourism will submit, for Government approval, a Royal Decree regulating the remuneration model of the transmission activity in the future.

For Red Eléctrica, the estimated adjustment of €100 million represents a significant negative impact and is in addition to the various cuts made since April 2012, estimated at over €440 million. Fundamentally, these cuts have been materialising in the one-year delay of revenues incoming from the putting in service of assets, which had a effect on the balance sheets of REE of nearly €200 million in 2012 and around €100 million in 2013. Also, it should be taken into account a further reduction of €45 million in remuneration received in both the 2012 and 2013 results due to the change of model, based on net assets and an additional €50 million for other additional items.

As a result, the impact of all these adjustments, under the Government's energy reforms between 2012 and 2013, on REE has amounted to nearly 18% of the remuneration of the Company.

Notwithstanding the aforementioned, the Company positively values the definitive elimination of the tariff deficit which will result in lower regulatory risk and a proper assessment of our business in the medium and long term.

Finally, Red Eléctrica expresses their confidence in their solid operational and economic base, which, as markets have recognised, will enable to mitigate the effects of these cuts and face the remaining future challenges regarding efficiency, flexibility, financial soundness and the anticipation capacity.