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o | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
OR | ||
x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended: December 31, 2004 | ||
OR | ||
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from to | ||
Commission file number: 1-14688 |
Federal Republic of Germany (Jurisdiction of Incorporation or Organization) | E.ON-Platz 1, D-40479 Düsseldorf, GERMANY (Address of Principal Executive Offices) |
Title of each class | Name of each exchange on which registered | |
American Depositary Shares representing | ||
Ordinary Shares with no par value | New York Stock Exchange | |
Ordinary Shares with no par value | New York Stock Exchange* |
* | Not for trading, but only in connection with the registration of American Depositary Shares. |
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• | “E.ON,” the “Company,” the “E.ON Group” or the “Group” refers to E.ON AG and its consolidated subsidiaries. | |
• | “VEBA” refers to VEBA AG and its consolidated subsidiaries prior to its merger with VIAG AG and the name change from VEBA AG to E.ON AG. “VIAG” or the “VIAG Group” refers to VIAG AG and its consolidated subsidiaries prior to its merger with VEBA. | |
• | “PreussenElektra” refers to PreussenElektra AG and its consolidated subsidiaries, which merged with Bayernwerk AG and its consolidated subsidiaries to form E.ON’s German and continental European energy business in the Central Europe market unit consisting of E.ON Energie AG and its consolidated subsidiaries (“E.ON Energie”). | |
• | “E.ON Ruhrgas” refers to E.ON Ruhrgas AG (formerly Ruhrgas AG or “Ruhrgas”) and its consolidated subsidiaries, which collectively comprise E.ON’s gas business in the Pan-European Gas market unit. Until December 31, 2003, Ruhrgas and its consolidated subsidiaries formed E.ON’s former Ruhrgas division. | |
• | “E.ON UK” refers to E.ON UK plc (formerly Powergen UK plc or “Powergen”) and its consolidated subsidiaries, which collectively comprise E.ON’s U.K. energy business in the U.K. market unit. Until December 31, 2003, Powergen and its consolidated subsidiaries, including LG&E Energy, which was held by Powergen until its transfer to a direct subsidiary of E.ON AG in March 2003, formed E.ON’s former Powergen division (“Powergen Group”). | |
• | “Sydkraft” refers to Sydkraft AB and its consolidated subsidiaries, and “E.ON Finland” refers to E.ON Finland Oyj and its consolidated subsidiaries, which collectively comprise E.ON’s Nordic energy business in the Nordic market unit. | |
• | “LG&E Energy” refers to LG&E Energy LLC and its consolidated subsidiaries, which collectively comprise E.ON’s U.S. energy business in the U.S. Midwest market unit. Until December 31, 2003, LG&E Energy formed the U.S. business of the Powergen Group. | |
• | “Viterra” refers to Viterra AG and its consolidated subsidiaries, which collectively comprise E.ON’s real estate business in the other activities segment. | |
• | “Degussa” refers to Degussa AG and its consolidated subsidiaries, in which E.ON now owns a minority interest, and which collectively comprised E.ON’s former Degussa division. | |
• | “VEBA Oel” refers to VEBA Oel AG and its consolidated subsidiaries, which collectively comprised E.ON’s former oil division. | |
• | “Stinnes” refers to Stinnes AG and its consolidated subsidiaries, which collectively comprised E.ON’s former distribution/logistics division. | |
• | “VAW” refers to VAW aluminium AG and its consolidated subsidiaries, which collectively comprised E.ON’s former aluminum division. | |
• | “MEMC” refers to MEMC Electronic Materials, Inc. and its consolidated subsidiaries, which collectively comprised E.ON’s former silicon wafers division. |
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Item 1. | Identity of Directors, Senior Management and Advisers | 1 | |||||
Item 2. | Offer Statistics and Expected Timetable | 1 | |||||
Item 3. | Key Information | 1 | |||||
SELECTED FINANCIAL DATA | 1 | ||||||
DIVIDENDS | 2 | ||||||
EXCHANGE RATES | 3 | ||||||
RISK FACTORS | 4 | ||||||
Item 4. | Information on the Company | 13 | |||||
HISTORY AND DEVELOPMENT OF THE COMPANY | 13 | ||||||
VEBA-VIAG MERGER | 13 | ||||||
POWERGEN GROUP ACQUISITION | 13 | ||||||
RUHRGAS ACQUISITION | 14 | ||||||
GROUP STRATEGY | 18 | ||||||
OTHER SIGNIFICANT EVENTS | 21 | ||||||
CAPITAL EXPENDITURES | 22 | ||||||
BUSINESS OVERVIEW | 22 | ||||||
INTRODUCTION | 22 | ||||||
CENTRAL EUROPE | 26 | ||||||
PAN-EUROPEAN GAS | 44 | ||||||
U.K. | 62 | ||||||
NORDIC | 73 | ||||||
U.S. MIDWEST | 85 | ||||||
OTHER ACTIVITIES | 92 | ||||||
DISCONTINUED OPERATIONS | 94 | ||||||
REGULATORY ENVIRONMENT | 96 | ||||||
ENVIRONMENTAL MATTERS | 110 | ||||||
OPERATING ENVIRONMENT | 115 | ||||||
ECONOMIC BACKGROUND | 115 | ||||||
RISK MANAGEMENT | 117 | ||||||
ORGANIZATIONAL STRUCTURE | 118 | ||||||
PROPERTY, PLANTS AND EQUIPMENT | 118 | ||||||
GENERAL | 118 | ||||||
PRODUCTION FACILITIES | 118 | ||||||
INTERNAL CONTROLS | 120 | ||||||
Item 5. | Operating and Financial Review and Prospects | 120 | |||||
OVERVIEW | 120 | ||||||
ACQUISITIONS AND DISPOSITIONS | 122 | ||||||
CRITICAL ACCOUNTING POLICIES | 128 | ||||||
NEW ACCOUNTING PRONOUNCEMENTS | 132 | ||||||
RESULTS OF OPERATIONS | 132 | ||||||
BUSINESS SEGMENT INFORMATION | 133 | ||||||
YEAR ENDED DECEMBER 31, 2004 COMPARED WITH YEAR ENDED DECEMBER 31, 2003 | 134 | ||||||
YEAR ENDED DECEMBER 31, 2003 COMPARED WITH YEAR ENDED DECEMBER 31, 2002 | 148 |
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INFLATION | 157 | |||||
EXCHANGE RATE EXPOSURE AND CURRENCY RISK MANAGEMENT | 157 | |||||
LIQUIDITY AND CAPITAL RESOURCES | 157 | |||||
RESEARCH AND DEVELOPMENT | 165 | |||||
TREND INFORMATION | 165 | |||||
OFF-BALANCE SHEET ARRANGEMENTS | 165 | |||||
CONTRACTUAL OBLIGATIONS | 167 | |||||
Item 6. | Directors, Senior Management and Employees | 168 | ||||
Item 7. | Major Shareholders and Related Party Transactions | 180 | ||||
Item 8. | Financial Information | 181 | ||||
CONSOLIDATED FINANCIAL STATEMENTS | 181 | |||||
LEGAL PROCEEDINGS | 181 | |||||
DIVIDEND POLICY | 182 | |||||
SIGNIFICANT CHANGES | 182 | |||||
Item 9. | The Offer and Listing | 182 | ||||
Item 10. | Additional Information | 185 | ||||
MEMORANDUM AND ARTICLES OF ASSOCIATION | 185 | |||||
MATERIAL CONTRACTS | 196 | |||||
EXCHANGE CONTROLS | 196 | |||||
TAXATION | 197 | |||||
DOCUMENTS ON DISPLAY | 201 | |||||
Item 11. | Quantitative and Qualitative Disclosures about Market Risk | 201 | ||||
Item 12. | Description of Securities other than Equity Securities | 206 | ||||
PART II | ||||||
Item 13. | Defaults, Dividend Arrearages and Delinquencies | 206 | ||||
Item 14. | Material Modifications to the Rights of Security Holders and Use of Proceeds | 206 | ||||
Item 15. | Controls and Procedures | 206 | ||||
Item 16A. | Audit Committee Financial Expert | 207 | ||||
Item 16B. | Code of Ethics | 207 | ||||
Item 16C. | Principal Accountant Fees and Services | 207 | ||||
Item 16E. | Purchases of Equity Securities by the Issuer and Affiliated Purchasers | 209 | ||||
PART III | ||||||
Item 17. | Financial Statements | 210 | ||||
Item 18. | Financial Statements | 210 | ||||
Item 19. | Exhibits | 210 |
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Year Ended December 31, | ||||||||||||||||||||||||
2004(1) | 2004 | 2003 | 2002 | 2001 | 2000 | |||||||||||||||||||
(in millions, except share amounts) | ||||||||||||||||||||||||
Statement of Income Data: | ||||||||||||||||||||||||
Sales | $ | 66,476 | €49,103 | €46,427 | €36,624 | €36,886 | €38,374 | |||||||||||||||||
Sales excluding electricity and natural gas taxes(2) | 60,576 | 44,745 | 42,541 | 35,691 | 36,192 | 38,385 | ||||||||||||||||||
Income/(Loss) from continuing operations before income taxes | 9,204 | 6,799 | 5,538 | (759 | ) | 2,629 | 5,095 | |||||||||||||||||
Income/(Loss) from continuing operations after income taxes(3) | 6,568 | 4,852 | 4,414 | (97 | ) | 2,581 | 3,328 | |||||||||||||||||
Income/(Loss) from continuing operations | 5,886 | 4,348 | 3,950 | (720 | ) | 2,129 | 2,939 | |||||||||||||||||
Income/(Loss) from discontinued operations(4) | (12 | ) | (9 | ) | 1,137 | 3,306 | (55 | ) | 628 | |||||||||||||||
Net income | 5,874 | 4,339 | 4,647 | 2,777 | 2,048 | 3,570 | ||||||||||||||||||
Basic earnings/(Loss) per share from continuing operations | 8.96 | 6.62 | 6.04 | (1.10 | ) | 3.15 | 4.74 | |||||||||||||||||
Basic earnings (Loss) per share from discontinued operations, net(4) | (0.01 | ) | (0.01 | ) | 1.74 | 5.07 | (0.08 | ) | 1.01 | |||||||||||||||
Basic earnings per share from net income(5) | 8.95 | 6.61 | 7.11 | 4.26 | 3.03 | 5.75 |
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Year Ended December 31, | ||||||||||||||||||||||||
2004(1) | 2004 | 2003 | 2002 | 2001 | 2000 | |||||||||||||||||||
(in millions, except share amounts) | ||||||||||||||||||||||||
Balance Sheet Data: | ||||||||||||||||||||||||
Total assets | $ | 154,417 | €114,062 | €111,850 | €113,503 | €101,659 | €106,215 | |||||||||||||||||
Long-term financial liabilities | 18,330 | 13,540 | 14,884 | 17,576 | 9,308 | 7,611 | ||||||||||||||||||
Stockholders’ equity(6) | 45,434 | 33,560 | 29,774 | 25,653 | 24,462 | 28,033 | ||||||||||||||||||
Number of authorized shares | 692,000,000 | 692,000,000 | 692,000,000 | 692,000,000 | 763,298,875 |
(1) | Amounts in this column are unaudited and have been translated solely for the convenience of the reader at an exchange rate of $1.3538 =€1.00, the Noon Buying Rate on December 31, 2004. |
(2) | Laws in Germany and other European countries in which E.ON operates require the seller of electricity to collect electricity taxes and remit such amounts to tax authorities. Similar laws also require the seller of natural gas to collect and remit natural gas taxes to tax authorities. |
(3) | Before minority interest of€504 million for 2004, as compared with€464 million,€623 million,€452 million and€389 million for 2003, 2002, 2001 and 2000, respectively. |
(4) | For more details, see “Item 5. Operating and Financial Review and Prospects — Acquisitions and Dispositions — Discontinued Operations” and Note 4 of the Notes to Consolidated Financial Statements. |
(5) | Includes earnings per share from the first-time application of new U.S. GAAP standards of€0.00,€(0.67),€0.29 and€(0.04) for 2004, 2003, 2002 and 2001, respectively. |
(6) | After minority interests. |
Dividends Paid | ||||||||
per Ordinary | ||||||||
Share with no | ||||||||
par value | ||||||||
Year Ended December 31, | € | $(1) | ||||||
2000 | 1.35 | 1.18 | ||||||
2001 | 1.60 | 1.49 | ||||||
2002 | 1.75 | 1.96 | ||||||
2003 | 2.00 | 2.39 | ||||||
2004(2) | 2.35 | 3.18 |
(1) | Translated into dollars at the Noon Buying Rate on the dividend payment date, which typically occurred during the second quarter of the following year, except for the 2004 amount, which has been translated at the Noon Buying Rate on December 31, 2004. |
(2) | The dividend amount for the year ended December 31, 2004 is the amount proposed by E.ON’s Supervisory Board and Board of Management and has not yet been approved by its stockholders. Prior to the payment of the dividends, a resolution approving such amount must be passed by E.ON’s stockholders at the annual general meeting to be held on April 27, 2005. |
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Period | Average(1) | High | Low | Period-End | |||||||||||||
2000 | 0.9207 | 0.9388 | |||||||||||||||
2001 | 0.8909 | 0.8901 | |||||||||||||||
2002 | 0.9495 | 1.0485 | |||||||||||||||
2003 | 1.1411 | 1.2597 | |||||||||||||||
2004 | 1.2478 | 1.3538 | |||||||||||||||
September | 1.2417 | 1.2052 | |||||||||||||||
October | 1.2783 | 1.2271 | |||||||||||||||
November | 1.3288 | 1.2703 | |||||||||||||||
December | 1.3625 | 1.3224 | |||||||||||||||
2005 | |||||||||||||||||
January | 1.3476 | 1.2954 | |||||||||||||||
February | 1.3274 | 1.2773 |
(1) | The average of the Noon Buying Rates for the relevant period, calculated using the average of the Noon Buying Rates on the last business day of each month during the period. |
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• | Standardized documentation of risks and control systems; | |
• | Evaluation of risks according to the degree of severity and the probability of occurrence, and an annual assessment of the effectiveness of existing control systems; and | |
• | Analysis of the results and structured disclosure in a risk report. |
The Company’s core energy operations face strong competition, which could depress margins. |
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• | As described above, EU directives provide that the regulatory authority to be introduced in Germany should have the power to set or approve network access tariffs or, alternatively, the methodologies used for calculating them. This could lead to lower grid fees for E.ON’s electricity and gas transportation and distribution businesses in Germany. | |
• | In Germany, state cartel authorities in Bavaria, Hesse and Thuringia and the Federal Cartel Office have launched investigations of certain utilities with allegedly high gas tariffs to determine whether these gas prices constitute market abuse. These investigations affect some utilities in which Thüga and E.ON Energie hold interests. The Bavarian state cartel office and the Federal Cartel Office have since decided to end their investigations, while the proceedings in Hesse and Thuringia remain pending. The Company cannot currently predict the outcome of the pending investigations. | |
• | Regulators in the United Kingdom have established a price control framework for electricity distribution customers that is in effect through March 31, 2005; new price controls will take effect in April 2005 for the five year period ending March 2010. | |
• | In the United States, the rates for LG&E Energy’s retail electric and gas customers in Kentucky, its principal area of operations, are set by state regulators and remain in effect until such time that an adjustment is sought and approved. LG&E Energy’s affected utilities applied for and received increases in regulated tariffs effective as of July 1, 2004, although such increases remain the subject of continuing regulatory review and governmental inquiry. |
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Item 4. | Information on the Company. |
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• | the issuance of securities; | |
• | the acquisition of securities, utility assets and other businesses; and | |
• | lending to or guaranteeing obligations of any other company in the registered holding company corporate structure. |
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• | In September 2003, E.ON Energie sold its 80.5 percent interest in Gelsenwasser to a joint venture company owned by the municipal utilities of the cities of Dortmund and Bochum. Gelsenwasser has been accounted for as a discontinued operation in the Consolidated Financial Statements. | |
• | In October 2003, E.ON Energie transferred its 5.26 percent stake in VNG to E.ON Ruhrgas, which already owned an interest in this Leipzig-based gas distributor. In December 2003, E.ON Ruhrgas agreed to sell 32.1 percent of VNG to EWE, and offered its remaining 10.0 percent stake in VNG to eleven municipalities in eastern Germany. These sales were subject to the fulfillment of a number of conditions and were completed in January 2004. | |
• | In November 2003, E.ON Energie and E.ON Ruhrgas sold their respective 22.0 percent stakes in Bayerngas to the municipal utilities of the cities of Munich, Augsburg, Regensburg and Ingolstadt, and to the city of Landshut. | |
• | In November 2003, E.ON Energie sold its 100 percent interest in E.ON-Energiebeteiligungs-Gesellschaft mbH to EWE. E.ON Energiebeteiligungs-Gesellschaft mbH held E.ON’s 32.36 percent interest in swb, comprising all of the shares previously held by E.ON Energie and E.ON Ruhrgas. | |
• | In January 2004, E.ON Energie sold its 27.4 percent stake in EWE to EWE’s majority shareholders Energieverband Elbe-Weser Beteiligungsholding GmbH and Weser-Ems Energiebeteiligungen GmbH. |
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• | In the Pan-European Gas market unit, E.ON intends to leverage its increased gas operations to improve its negotiating position with producers of natural gas, and to take advantage of pan-European gas arbitrage opportunities. For information about E.ON’s planned capital investment in E.ON Ruhrgas, see “Item 5. Operating and Financial Review and Prospects — Liquidity and Capital Resources.” | |
• | In the Central Europe market unit, E.ON expects to benefit from joint market management with regional energy companies, the integration of continental European gas trading activities and the sharing of technical expertise among the power and gas businesses. In order to integrate the Company’s continental European gas trading activities conducted by D-Gas B.V. (“D-Gas”), E.ON Energie transferred their gas trading operations to E.ON Ruhrgas in 2004. | |
• | In the U.K. market unit, E.ON intends to use the Pan-European Gas division to enhance E.ON UK’s gas supply and gas storage options, as well as support its trading activities. An important first step was the conclusion of a 10-year gas supply contract between E.ON Ruhrgas and E.ON UK. E.ON Ruhrgas started supplying E.ON UK with gas in October 2004. | |
• | In the Nordic market unit, E.ON also intends to use the Pan-European Gas market unit to enhance Sydkraft’s gas supply options and expects to be able to use a joint approach for future gas infrastructure |
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development. E.ON Ruhrgas and Sydkraft have also entered into a gas supply contract, pursuant to which E.ON Ruhrgas will start to supply Sydkraft with natural gas in autumn 2005. |
On.top |
• | Central Europe, led by E.ON Energie AG; | |
• | Pan-European Gas, led by E.ON Ruhrgas AG; | |
• | U.K., led by E.ON UK plc; | |
• | Nordic, led by E.ON Nordic AB; and | |
• | U.S. Midwest, led by LG&E Energy LLC. |
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• | The transfer by E.ON Energie to E.ON Ruhrgas of its: |
• | 67.7 percent interest in Thüga; | |
• | up to 40.0 percent interest in the Austrian company RAG Beteiligungs-Aktiengesellschaft, which owns a 75 percent share in the Austrian exploration and production company Rohöl-Aufsuchungs Aktiengesellschaft (to be completed in 2005); | |
• | 18.8 percent interest in the Latvian gas supplier JSC Latvijas Gaze; | |
• | 14.3 percent interest in the Lithuanian gas distributor AB Lietuvos Dujos; and its | |
• | gas trading business D-Gas. |
• | The transfer by E.ON Ruhrgas to E.ON Energie of its downstream gas activities in the Czech Republic and Hungary, including its: |
• | 4.45 percent interest in the Czech gas distribution company Jihomoravská plynárenská a.s. (“JMP”); | |
• | 27.6 percent interest in the Czech gas distribution company Západoceská plynárenská a.s. (“ZCP”); | |
• | 24.0 percent interest in the Czech gas distribution company Prazská plynárenská Holding a.s. (“PPH”); | |
• | 0.05 percent interest in the Czech gas distribution company Prazská plynárenská a.s. (“PP”); | |
• | 14.3 percent interest in the Czech gas distribution company Stredoceska plynárenská a.s. (“STP”); | |
• | 9.57 percent interest in the Czech gas distribution company Severomoravská plynárenská a.s. (“SMP”); | |
• | 16.52 percent interest in the Czech gas distribution company Východoceská plynárenská a.s. (“VCP”); | |
• | 49.8 percent interest in the Hungarian gas distribution company Déldunántuli Gázszolgáltató Részvenytársaság (“DDGÁZ”); and its | |
• | 16.3 percent interest in the Hungarian gas distribution company Fövárosi Gázmüvek Részvénytársaság (“FÖGÁZ”). |
• | The transfer by E.ON Energie to E.ON AG of its 100 percent interest in E.ON Scandinavia (which has since been re-named E.ON Nordic), including its: |
• | 55.2 percent interest in Sydkraft, including Sydkraft’s interest in Graninge AB (“Graninge”) and its interest in the Baltic Cable; and a | |
• | 65.6 percent interest in E.ON Finland. |
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Strategy |
• | Creating value from the convergence of European energy markets (e.g., as the United Kingdom becomes a net importer of gas and can take advantage of greater pipeline capacity connecting it to continental Europe, E.ON will be able to supply its retail gas business in the United Kingdom from its Pan-European Gas supply business). | |
• | Creating value from the convergence of the electricity and gas value chains (e.g., offering retail electricity and gas customers energy from a single source), thus providing E.ON with opportunities to realize economies of scale in servicing costs while increasing customer loyalty, thus reducing its customer “churn rate”. | |
• | Enhancing operational performance through identifying and transferring best practice for common activities throughout the Group’s different market units (e.g., effective programs for enhancing E.ON’s electricity generation, distribution and retailing businesses). | |
• | Improving the Group’s competitive position in its target markets through pursuing selective investments which contribute to these objectives or provide stand alone value creation opportunities, as described below; and | |
• | Tapping value-enhancing growth potential in new markets such as Russia and Italy. |
• | Central Europe — Fortifying strong market positions and developing new growth potential through: |
• | consolidation of distribution activities and capitalizing on opportunities from power-gas convergence; | |
• | re-investment in power generation to maintain the strong market position; | |
• | hedging exposure to price risks through vertical integration of generation and distribution operations; and | |
• | participation in the privatization of power and downstream gas companies in eastern Central Europe, as well as selective investments in power generation. |
• | Pan-European Gas — Strengthening and diversifying E.ON Ruhrgas’ current position through: |
• | selective equity investments in gas production in the North Sea and Russia; | |
• | participation in infrastructure projects to enhance gas supply position in Europe; and | |
• | selective acquisitions of mid- and downstream companies in Europe. |
• | U.K. — Enhancing profitability of the U.K. businesses through: |
• | investing in flexible generation assets and low carbon intensive generating technologies, such as Combined Cycle Gas Turbine (“CCGT”), to maintain a low cost hedge for changes in retail electricity demand; | |
• | investing in the generation of power from renewable resources to capture value from the British government’s renewable obligation mandate; and | |
• | investing in gas storage assets to hedge against potentially volatile gas price movements as the United Kingdom starts to become a net importer of gas. |
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• | Nordic — Strengthening E.ON’s position in a consolidating market through: |
• | expanding presence in power generation; | |
• | enhancing scale through synergistic acquisitions in distribution and district heating; and | |
• | continued participation in gas supply and infrastructure developments. |
• | U.S. Midwest — Focusing on optimizing LG&E Energy’s current operations in Kentucky and delivering additional performance improvements. This could include investments in generation capacity if the demand for electricity grows and the U.S. regulatory authorities enable the Company to earn a return on investment that meets its stringent criteria. |
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2004 | 2003 | ||||||||||||||||
(€ in | (€ in | ||||||||||||||||
millions) | % | millions) | % | ||||||||||||||
Central Europe(1)(2) | 20,752 | 42.3 | 19,253 | 41.5 | |||||||||||||
Pan-European Gas(3) | 14,426 | 29.4 | 12,973 | 27.9 | |||||||||||||
U.K | 8,490 | 17.3 | 7,923 | 17.1 | |||||||||||||
Nordic(4) | 3,347 | 6.8 | 2,824 | 6.1 | |||||||||||||
U.S. Midwest(2) | 1,913 | 3.9 | 1,971 | 4.2 | |||||||||||||
Corporate Center(2)(5) | (813 | ) | (1.7 | ) | (596 | ) | (1.3 | ) | |||||||||
Core Energy Business | 48,115 | 98.0 | 44,348 | 95.5 | |||||||||||||
Other Activities(2)(6) | 988 | 2.0 | 2,079 | 4.5 | |||||||||||||
Total Revenues(7) | 49,103 | 100.0 | 46,427 | 100.0 | |||||||||||||
(1) | Includes electricity taxes of€1,051 million in 2004 and€1,015 million in 2003. |
(2) | Excludes the sales of certain activities now accounted for as discontinued operations. For more details, see “Item 5. Operating and Financial Review and Prospects — Acquisitions and Dispositions — Discontinued Operations” and Note 4 of the Notes to Consolidated Financial Statements. |
(3) | Includes the sales of the former Ruhrgas activities from the date of consolidation on February 1, 2003. Sales include natural gas and electricity taxes of€2,923 million in 2004 and€2,555 million in 2003. |
(4) | Sales include electricity and natural gas taxes of€395 million in 2004 and€324 million in 2003. |
(5) | Includes primarily the parent company and effects from consolidation, as well as the results of the former telecommunications division, as explained above. |
(6) | Includes sales of Viterra and sales of Degussa until January 2003, prior to its deconsolidation. For more details, see “— Other Activities — Degussa,” “Item 5. Operating and Financial Review and Prospects — Overview” and Note 4 of the Notes to Consolidated Financial Statements. |
(7) | Excludes intercompany sales. |
2003 | 2002 | ||||||||||||||||
(€ in | (€ in | ||||||||||||||||
millions) | % | millions) | % | ||||||||||||||
E.ON Energie(1)(2) | 22,642 | 48.7 | 19,142 | 52.3 | |||||||||||||
Ruhrgas(3) | 12,085 | 26.1 | — | — | |||||||||||||
Powergen(2)(4) | 9,894 | 21.3 | 4,422 | 12.1 | |||||||||||||
Other/consolidation(2)(5) | (273 | ) | (0.6 | ) | 81 | 0.2 | |||||||||||
Core Energy Business | 44,348 | 95.5 | 23,645 | 64.6 | |||||||||||||
Viterra(2) | 1,085 | 2.3 | 1,214 | 3.3 | |||||||||||||
Degussa(2)(6) | 994 | 2.2 | 11,765 | 32.1 | |||||||||||||
Other Activities | 2,079 | 4.5 | 12,979 | 35.4 | |||||||||||||
Total Revenues(7) | 46,427 | 100.0 | 36,624 | 100.0 | |||||||||||||
(1) | Sales include electricity taxes of€1,371 million in 2003 and€933 million in 2002. |
(2) | Excludes the sales of certain activities now accounted for as discontinued operations. For more details, see “Item 5. Operating and Financial Review and Prospects — Acquisitions and Dispositions — Discontinued Operations” and Note 4 of the Notes to Consolidated Financial Statements. |
(3) | Includes the sales of the former Ruhrgas activities from the date of consolidation on February 1, 2003. Sales for the period include natural gas taxes of€2,525 million. |
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(4) | Includes the sales of the Powergen Group from the date of consolidation on July 1, 2002. |
(5) | Includes primarily the parent company and effects from consolidation, as well as the results of the former telecommunications division. |
(6) | In 2003, includes sales of Degussa for the month of January only, prior to its deconsolidation. For more details, see “— Other Activities — Degussa”, “Item 5. Operating and Financial Review and Prospects — Overview” and Note 4 of the Notes to Consolidated Financial Statements. |
(7) | Excludes intercompany sales. |
Overview |
• | In January 2004, E.ON Energie sold its 4.99 percent shareholding in the Spanish utility Union Fenosa S.A. (“Union Fenosa”) on the market. | |
• | In June 2003, the general assembly of E.ON Bayern AG (“E.ON Bayern”) passed a resolution authorizing E.ON Energie, its controlling shareholder, to use a squeeze out procedure to acquire that portion of E.ON Bayern stock held by minority shareholders. Following registration of the acquired shares in the commercial register on July 1, 2004, E.ON Energie now holds 100.0 percent of E.ON Bayern. |
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• | In October 2004, E.ON Energie qualified as “preferred bidder” for the acquisition of a majority stake in the Romanian electricity distribution company Electrica Moldova S.A. (“Electrica Moldova”) from the Romanian government. E.ON Energie currently expects to sign an agreement in the first half of 2005, and to close the transaction in the second half of 2005. In 2003, the company sold approximately 4.1 TWh of electricity to 1.3 million customers. | |
• | In December 2004, E.ON Energie increased its stake in the German regional electricity distribution company Avacon by 13.1 percent to 69.6 percent in a multistage process involving acquisition of the intermediate holding companies Ferngas Salzgitter GmbH (“Ferngas Salzgitter”) and FSG Holding GmbH (“FSG Holding”). E.ON Energie increased its stake in FSG Holding to 100 percent by acquiring a 10.0 percent interest from Bayerische Landesbank and the remaining 90.0 percent from three Group companies (E.ON Ruhrgas’ RGE Holding GmbH (45.0 percent), Thüga-Konsortium Beteiligungs GmbH (35.0 percent) and Thüga (10.0 percent)). In addition, E.ON Energie purchased direct shareholdings in Ferngas Salzgitter from Brigitta Erdgas und Erdöl GmbH (“BEB”) (13.0 percent), Erdgas-Verkaufs-Gesellschaft Münster (“EGM”) (13.0 percent) and RGE Holding GmbH (39.0 percent). Following these acquisitions, FSG Holding was merged into E.ON Energie and Ferngas Salzgitter into Avacon. | |
• | During 2004, Thüga transferred minority shareholdings in several German municipal utilities in Thuringia to E.ON Energie. For more information, see “— Pan-European Gas — Downstream Shareholdings — Thüga.” | |
• | During 2004, E.ON Energie signed agreements to increase its stake in DDGÁZ to 50.01 percent, pending approval by the Hungarian authorities. | |
• | In February 2005, E.ON Energie acquired 67.0 percent stakes in each of the two Bulgarian electricity distribution companies Elektrorazpredelenie Varna and Elektrorazpredelenie Gorna Oryahovitza. The companies operate in northeastern Bulgaria. In 2004, the companies sold an aggregate of approximately 5 TWh of electricity to 1.1 million customers. |
• | Leading entity for the management and coordination of the group activities. |
• | Centralized strategic, controlling and service functions. |
Western Europe |
• | Power generation by conventional power plants. |
• | Waste incineration. |
• | Renewables. |
• | District heating. |
• | Industrial power plants. |
• | Power generation by nuclear power plants. |
• | Power generation by hydroelectric power plants. |
• | Power generation by conventional power plants. |
• | District heating. |
• | Operation of high voltage grids (380 kilovolt-110 kilovolt). |
• | System operation, including provision of regulating and balancing power. |
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• | Supply of electricity and energy services to large industrial customers, as well as to regional and municipal distributors. |
• | Centralized wholesale functions. |
• | Optimization of energy procurement costs. |
• | Physical energy trading and trading of energy-based financial instruments and related risk management. |
• | Optimization of the value of the power plants’ assets in the market place. |
• | Emissions trading. |
(shareholding percentages range from 62.9 to 100.0 percent).
• | Distribution and sale of electricity, gas, heat and water to retail customers. |
• | Energy support services. |
• | Waste incineration. |
• | Customer service and electricity and heat supply to utilities and industrial customers in the Ruhr region. |
Eastern Europe |
• | Generation, distribution, marketing and sale of electricity and gas in Hungary through its group companies. |
• | Distribution, marketing and sale of electricity and gas in the Czech Republic through its group companies. |
• | Distribution, marketing and sale of electricity in Slovakia. |
• | Group internal and external consulting and planning services in the energy sector. |
• | Marketing of expertise in the area of conventional, renewable, cogeneration and nuclear power generation and pipeline business. |
• | Infrastructure services. |
(1) | The remaining 43.0 percent is held by E.ON Ruhrgas. |
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Operations |
Generation: | the production of electricity at power stations; | |
Transmission: | the bulk transfer of electricity across an interregional power grid, which consists mainly of overhead transmission lines, substations and some underground cables (at this level there is a market for bulk trading of electricity, through which sales and purchases of electricity are made between generators, regional distributors, and other suppliers of electricity); | |
Distribution and Sale: | the transfer and sale of electricity from the interregional power grid and its delivery, across local distribution systems, to customers; and | |
Trading: | the buying and selling of electricity and related products for purposes of portfolio optimization, arbitrage and risk management. |
2004 | 2003 | |||||||||||||
million | million | % | ||||||||||||
Sources of Power | kWh | kWh(1) | Change | |||||||||||
Own production | 131,278 | 137,107 | -4.3 | |||||||||||
Purchased power | 123,035 | 103,907 | +18.4 | |||||||||||
from power stations in which E.ON Energie has an interest of 50 percent or less | 11,223 | 10,564 | +6.2 | |||||||||||
from other suppliers | 111,812 | 93,343 | +19.8 | |||||||||||
Total power procured(2) | 254,313 | 241,014 | +5.5 | |||||||||||
Power used for operating purposes, network | ||||||||||||||
losses and pump storage | (10,239 | ) | (9,234 | ) | +10.9 | |||||||||
Total | 244,074 | 231,780 | +5.3 | |||||||||||
(1) | Adjusted to reflect the new market unit structure. |
(2) | Excluding physically-settled electricity trading activities at EST. EST’s physically-settled electricity trading activities amounted to 110,914 million kWh and 138,981 million kWh in 2004 and 2003, respectively. |
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Total | Total | ||||||||||||
2004 | 2003 | % | |||||||||||
million | million | Change in | |||||||||||
Sale of Power(1) to | kWh | kWh(2) | Total | ||||||||||
Non-consolidated interregional, regional and municipal utilities | 130,862 | 129,814 | +0.8 | ||||||||||
Industrial and commercial customers | 72,077 | 62,554 | +15.2 | ||||||||||
Residential and small commercial customers | 41,135 | 39,412 | +4.4 | ||||||||||
Total | 244,074 | 231,780 | +5.3 | ||||||||||
(1) | Excluding physically-settled electricity trading activities at EST. EST’s physically-settled electricity trading activities amounted to 110,914 million kWh and 138,981 million kWh in 2004 and 2003, respectively. |
(2) | Adjusted to reflect the new market unit structure. |
Power Generation |
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Capacity Attributable | |||||||||||||||||
Total | to E.ON Energie | ||||||||||||||||
Capacity | Start-up | ||||||||||||||||
Power Plants | Net MW | %(1) | MW | Date | |||||||||||||
Nuclear | |||||||||||||||||
Brokdorf | 1,370 | 80.0 | 1,096 | 1986 | |||||||||||||
Brunsbüttel | 771 | 33.3 | 257 | 1976 | |||||||||||||
Emsland | 1,329 | 12.5 | 166 | 1988 | |||||||||||||
Grafenrheinfeld | 1,275 | 100.0 | 1,275 | 1981 | |||||||||||||
Grohnde | 1,360 | 83.3 | 1,133 | 1984 | |||||||||||||
Gundremmingen B | 1,284 | 25.0 | 321 | 1984 | |||||||||||||
Gundremmingen C | 1,288 | 25.0 | 322 | 1984 | |||||||||||||
Isar 1 | 878 | 100.0 | 878 | 1977 | |||||||||||||
Isar 2 | 1,400 | 75.0 | 1,050 | 1988 | |||||||||||||
Krümmel | 1,260 | 50.0 | 630 | 1983 | |||||||||||||
Unterweser | 1,345 | 100.0 | 1,345 | 1978 | |||||||||||||
Total | 13,560 | 8,473 | |||||||||||||||
Lignite | |||||||||||||||||
Buschhaus | 350 | 100.0 | 350 | 1985 | |||||||||||||
Kassel | 33 | 50.0 | 17 | 1988 | |||||||||||||
Lippendorf S | 891 | 50.0 | 446 | 1999 | |||||||||||||
Schkopau | 900 | 55.6 | 500 | 1995 | |||||||||||||
Total | 2,174 | 1,313 | |||||||||||||||
Hard Coal | |||||||||||||||||
Bexbach 1 | 714 | 11.1 | 79 | 1983 | |||||||||||||
Buer (CHP) | 70 | 100.0 | 70 | 1985 | |||||||||||||
Datteln 1 | 95 | 100.0 | 95 | 1964 | |||||||||||||
Datteln 2 | 95 | 100.0 | 95 | 1964 | |||||||||||||
Datteln 3 | 113 | 100.0 | 113 | 1969 | |||||||||||||
Farge | 343 | 100.0 | 343 | 1969 | |||||||||||||
GKW Weser/ Veltheim 2 | 93 | 74.0 | 69 | 1965 | |||||||||||||
GKW Weser/ Veltheim 3 | 320 | 74.0 | 237 | 1970 | |||||||||||||
Heyden | 865 | 100.0 | 865 | 1987 | |||||||||||||
Kiel | 323 | 50.0 | 162 | 1970 | |||||||||||||
Knepper C | 345 | 100.0 | 345 | 1971 | |||||||||||||
Maasvlakte 1 (NL)(2) | 520 | 100.0 | 520 | 1988 | |||||||||||||
Maasvlakte 2 (NL)(2) | 520 | 100.0 | 520 | 1987 | |||||||||||||
Mehrum C | 690 | 50.0 | 345 | 1979 | |||||||||||||
Rostock | 508 | 50.4 | 256 | 1994 | |||||||||||||
Scholven B | 345 | 100.0 | 345 | 1968 | |||||||||||||
Scholven C | 345 | 100.0 | 345 | 1969 |
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Capacity Attributable | |||||||||||||||||
Total | to E.ON Energie | ||||||||||||||||
Capacity | Start-up | ||||||||||||||||
Power Plants | Net MW | %(1) | MW | Date | |||||||||||||
Hard Coal (continued) | |||||||||||||||||
Scholven D | 345 | 100.0 | 345 | 1970 | |||||||||||||
Scholven E | 345 | 100.0 | 345 | 1971 | |||||||||||||
Scholven F | 676 | 100.0 | 676 | 1979 | |||||||||||||
Shamrock | 132 | 100.0 | 132 | 1957 | |||||||||||||
Staudinger 1 | 249 | 100.0 | 249 | 1965 | |||||||||||||
Staudinger 3 | 293 | 100.0 | 293 | 1970 | |||||||||||||
Staudinger 5 | 510 | 100.0 | 510 | 1992 | |||||||||||||
Wilhelmshaven | 747 | 100.0 | 747 | 1976 | |||||||||||||
Zolling | 449 | 100.0 | 449 | 1986 | |||||||||||||
Total | 10,050 | 8,550 | |||||||||||||||
Natural Gas | |||||||||||||||||
Burghausen | 120 | 100.0 | 120 | 2001 | |||||||||||||
Emden GT | 52 | 100.0 | 52 | 1972 | |||||||||||||
Erfurt | 75 | 32.9 | 25 | — | |||||||||||||
Franken I/1 | 383 | 100.0 | 383 | 1973 | |||||||||||||
Franken I/2 | 440 | 100.0 | 440 | 1976 | |||||||||||||
Galileistraat (NL) | 209 | 100.0 | 209 | 1988 | |||||||||||||
Gendorf | 40 | 50.0 | 20 | 2002 | |||||||||||||
GKW Weser/ Veltheim 4 GT | 400 | 74.0 | 296 | 1975 | |||||||||||||
Grenzach-Wyhlen | 40 | 69.9 | 28 | 2004 | |||||||||||||
GT Ummeln | 60 | 74.0 | 44 | 1973 | |||||||||||||
Huntorf | 290 | 100.0 | 290 | 1977 | |||||||||||||
Irsching 3 | 415 | 100.0 | 415 | 1974 | |||||||||||||
Jena-Süd | 199 | 73.0 | 145 | 1996 | |||||||||||||
Kirchlengern | 180 | 62.9 | 113 | 1980 | |||||||||||||
Kirchmöser | 178 | 100.0 | 178 | 1994 | |||||||||||||
Leiden (NL) | 81 | 100.0 | 81 | 1986 | |||||||||||||
Maasvlakte UCML (NL) | 70 | 100.0 | 70 | 2004 | |||||||||||||
Obernburg | 100 | 50.0 | 50 | 1995 | |||||||||||||
Robert Frank 4 | 487 | 100.0 | 487 | 1973 | |||||||||||||
RoCa 3 (NL)(2) | 220 | 100.0 | 220 | 1996 | |||||||||||||
Staudinger 4 | 622 | 100.0 | 622 | 1977 | |||||||||||||
The Hague (NL) | 78 | 100.0 | 78 | 1982 | |||||||||||||
Other (<40 MW installed capacity) | 313 | n/a | 283 | n/a | |||||||||||||
Total | 5,052 | 4,649 | |||||||||||||||
Fuel Oil | |||||||||||||||||
Audorf | 87 | 100.0 | 87 | 1973 | |||||||||||||
Hausham GT 1 | 25 | 100.0 | 25 | 1982 | |||||||||||||
Hausham GT 2 | 25 | 100.0 | 25 | 1982 | |||||||||||||
Hausham GT 3 | 25 | 100.0 | 25 | 1982 |
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Capacity Attributable | |||||||||||||||||
Total | to E.ON Energie | ||||||||||||||||
Capacity | Start-up | ||||||||||||||||
Power Plants | Net MW | %(1) | MW | Date | |||||||||||||
Fuel Oil (continued) | |||||||||||||||||
Hausham GT 4 | 25 | 100.0 | 25 | 1982 | |||||||||||||
Ingolstadt 3 | 386 | 100.0 | 386 | 1973 | |||||||||||||
Ingolstadt 4 | 386 | 100.0 | 386 | 1974 | |||||||||||||
Itzehoe | 87 | 100.0 | 87 | 1972 | |||||||||||||
Wilhelmshaven | 56 | 100.0 | 56 | 1973 | |||||||||||||
Zolling GT 1 | 25 | 100.0 | 25 | 1976 | |||||||||||||
Zolling GT 2 | 25 | 100.0 | 25 | 1976 | |||||||||||||
�� | |||||||||||||||||
Total | 1,152 | 1,152 | |||||||||||||||
Hydroelectric | |||||||||||||||||
Aufkirchen | 27 | 100.0 | 27 | 1924 | |||||||||||||
Bittenbrunn | 20 | 100.0 | 20 | 1969 | |||||||||||||
Bergheim | 24 | 100.0 | 24 | 1970 | |||||||||||||
Braunau-Simbach | 100 | 50.0 | 50 | 1953 | |||||||||||||
Egglfing | 81 | 100.0 | 81 | 1944 | |||||||||||||
Eitting | 26 | 100.0 | 26 | 1925 | |||||||||||||
Ering | 73 | 100.0 | 73 | 1942 | |||||||||||||
Erzhausen | 220 | 100.0 | 220 | 1964 | |||||||||||||
Feldkirchen | 38 | 100.0 | 38 | 1970 | |||||||||||||
Gars | 25 | 100.0 | 25 | 1938 | |||||||||||||
Geisling | 25 | 100.0 | 25 | 1985 | |||||||||||||
Happurg | 160 | 100.0 | 160 | 1958 | |||||||||||||
Hemfurth | 20 | 100.0 | 20 | 1915 | |||||||||||||
Jochenstein | 132 | 50.0 | 66 | 1955 | |||||||||||||
Kachlet | 54 | 100.0 | 54 | 1927 | |||||||||||||
Langenprozelten | 164 | 100.0 | 164 | 1975 | |||||||||||||
Neuötting | 26 | 100.0 | 26 | 1951 | |||||||||||||
Nußdorf | 48 | 76.5 | 37 | 1982 | |||||||||||||
Oberaudorf-Ebbs | 60 | 50.0 | 30 | 1992 | |||||||||||||
Passau-Ingling | 86 | 50.0 | 43 | 1965 | |||||||||||||
Pfrombach | 22 | 100.0 | 22 | 1929 | |||||||||||||
Reisach | 105 | 100.0 | 105 | 1955 | |||||||||||||
Rosenheim | 35 | 100.0 | 35 | 1960 | |||||||||||||
Roßhaupten | 46 | 100.0 | 46 | 1954 | |||||||||||||
Schärding-Neuhaus | 96 | 50.0 | 48 | 1961 | |||||||||||||
Stammham | 23 | 100.0 | 23 | 1955 | |||||||||||||
Straubing | 22 | 100.0 | 22 | 1994 | |||||||||||||
Tanzmühle | 28 | 100.0 | 28 | 1959 | |||||||||||||
Teufelsbruck | 25 | 100.0 | 25 | 1938 | |||||||||||||
Töging | 85 | 100.0 | 85 | 1924 | |||||||||||||
Vohburg | 23 | 100.0 | 23 | 1992 | |||||||||||||
Walchensee | 124 | 100.0 | 124 | 1924 |
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Capacity Attributable | |||||||||||||||||
Total | to E.ON Energie | ||||||||||||||||
Capacity | Start-up | ||||||||||||||||
Power Plants | Net MW | %(1) | MW | Date | |||||||||||||
Hydroelectric (continued) | |||||||||||||||||
Waldeck 1 | 120 | 100.0 | 120 | 1931 | |||||||||||||
Waldeck 2 | 440 | 100.0 | 440 | 1975 | |||||||||||||
Wasserburg | 24 | 100.0 | 24 | 1938 | |||||||||||||
Other run-of-river, pump storage and storage | 781 | n/a | 734 | n/a | |||||||||||||
Total | 3,408 | 3,113 | |||||||||||||||
Others | 281 | 191 | |||||||||||||||
Total | 35,677 | 27,441 | |||||||||||||||
Mothballed/ Shutdown/ Reduced | |||||||||||||||||
Arzberg 5 | 104 | 100.0 | 104 | 1966 | |||||||||||||
Arzberg 6 | 252 | 100.0 | 252 | 1974 | |||||||||||||
Arzberg 7 | 121 | 100.0 | 121 | 1979 | |||||||||||||
Aschaffenburg 21 | 150 | 100.0 | 150 | 1963 | |||||||||||||
Aschaffenburg 31 | 143 | 100.0 | 143 | 1971 | |||||||||||||
Emden 4 | 433 | 100.0 | 433 | 1972 | |||||||||||||
Franken II/1 | 206 | 100.0 | 206 | 1966 | |||||||||||||
Franken II/2 | 206 | 100.0 | 206 | 1967 | |||||||||||||
Irsching 1 | 151 | 100.0 | 151 | 1969 | |||||||||||||
Irsching 2 | 312 | 100.0 | 312 | 1972 | |||||||||||||
Offleben | 280 | 100.0 | 280 | 1988 | |||||||||||||
Pleinting 1 | 292 | 100.0 | 292 | 1968 | |||||||||||||
Pleinting 2 | 402 | 100.0 | 402 | 1976 | |||||||||||||
Rauxel 2 | 164 | 100.0 | 164 | 1967 | |||||||||||||
Scholven G(3) | 672 | 50.0 | 336 | 1974 | |||||||||||||
Scholven H(3) | 672 | 50.0 | 336 | 1975 | |||||||||||||
Schwandorf B(4) | 99 | 100.0 | 99 | 1959 | |||||||||||||
Schwandorf C(4) | 99 | 100.0 | 99 | 1961 | |||||||||||||
Schwandorf D | 292 | 100.0 | 292 | 1972 | |||||||||||||
Stade | 640 | 66.7 | 417 | 1972 | |||||||||||||
Staudinger 2 | 249 | 100.0 | 249 | 1965 | |||||||||||||
Westerholt 1(5) | 138 | 100.0 | 138 | 1959 | |||||||||||||
Westerholt 2(5) | 138 | 100.0 | 138 | 1961 | |||||||||||||
Total | 6,215 | 5,320 | |||||||||||||||
(1) | Percentage of total capacity attributable to E.ON Energie. |
(2) | Power station operated by E.ON Benelux under long-term cross-border leasing arrangement. |
(3) | Not included in October 2000 shutdown program discussed below. |
(4) | Closed down before the shutdown program discussed below; already dismantled. |
(5) | Dismantling in process and finished, respectively. |
(CHP) | Combined Heat and Power Generation. |
(NL) | Located in the Netherlands. |
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• | Nuclear Phase-out:The operators of the nuclear plants have agreed to a specified number of operating kWh for each nuclear plant. This number has been calculated on the basis of 32 years of plant operation using a high load factor. The operators may trade allotted kWh among themselves. This means that if one nuclear plant closes before it has produced the allotted amount of kWh, the remaining kWh may be transferred to another nuclear power plant. | |
• | Termination of Fuel Reprocessing:The transport of spent fuel elements for reprocessing will be allowed until June 30, 2005 at the latest. Following this deadline, the operators must store spent fuel in interim facilities on the premises of the nuclear plants. Such storage requires the approval and construction of interim storage facilities. The construction of E.ON’s interim storage facilities is progressing and the Company expects to finish construction by the end of 2006. For the period from July 2005 until construction is finished, the Company plans to store the spent fuel elements at the plants in so-called in-plant fuel pools. The Company expects the capacity of these fuel pools will be sufficient to store the spent fuel elements until the storage facilities are completed. E.ON believes the transition period from reprocessing to on-site storage allows it to satisfy its obligations under its reprocessing contracts with Cogema and BNFL. |
• | The accrual period for decommissioning costs has been extended from 19 to 25 years. This requires E.ON Energie to release a portion of the provisions it had previously established for tax purposes based on the shorter accrual period. | |
• | Certain parts of the provisions concerning MOX fuel elements have to be reversed. The costs must be capitalized as incurred instead. |
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• | Those portions of the provisions that have been established in past years relating to the financing and operational costs for final storage of nuclear waste have been disallowed. The costs of these items will now be tax-deductible when they are actually expensed. | |
• | In accordance with the new general rule for long-term provisions, all types of provisions for nuclear power must now be discounted. The Tax Relief Act sets the discount rate at 5.5 percent. This also applies to provisions that have previously been established, which must be released to the extent they do not reflect this discounting. |
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Transmission |
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Distribution and Sale |
![(SUPPLY AREA MAP)](https://capedge.com/proxy/20-F/0000950124-05-001404/k92543k9254300.gif)
Germany | Germany | ||||||||||||
2004 | 2003 | % | |||||||||||
million | million | Change | |||||||||||
Sale of Power to | kWh | kWh(1) | in Total | ||||||||||
Non-consolidated interregional, regional and municipal utilities | 112,575 | 111,243 | +1.2 | ||||||||||
Industrial and commercial customers(2) | 56,274 | 51,925 | +8.4 | ||||||||||
Residential and small commercial customers | 30,352 | 31,086 | -2.4 | ||||||||||
Total | 199,201 | 194,254 | +2.5 | ||||||||||
(1) | Adjusted to reflect the new market unit structure. |
(2) | The increase in the sale of power to industrial and commercial customers is primarily attributable to the gain of new customers. |
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![(SUPPLY STRUCTURE CHART)](https://capedge.com/proxy/20-F/0000950124-05-001404/k92543k9254301.gif)
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Trading |
2004 | 2003 | % | |||||||||||
million | million | Change | |||||||||||
Trading of Power | kWh | kWh | in Total | ||||||||||
Power sold(1) | 162,671 | 208,939 | -22.1 | ||||||||||
Power purchased(1) | 146,755 | 202,680 | -27.6 | ||||||||||
Total | 309,426 | 411,619 | -24.8 | ||||||||||
(1) | Any negative balance of power purchased as compared to power sold is satisfied by the delivery of electricity generated by E.ON Energie. |
Other |
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Competitive Environment |
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Overview |
• | In October 2004, E.ON Ruhrgas signed an agreement with the Romanian government for the acquisition of a 51.0 percent stake in the Romanian gas supplier Distrigaz Nord. Distrigaz Nord is active in gas distribution in northern Romania. The transaction is expected to close in the first half of 2005. | |
• | In November 2004, ERI signed an agreement for the acquisition of 75.0 percent minus 1 share each of the gas trading and gas storage businesses of the Hungarian oil and gas company MOL and its 50.0 percent interest in the gas import subsidiary Panrusgáz. In addition, MOL received a put option to sell to ERI up to 75.0 percent minus 1 share of its gas transmission business and put options to sell to ERI the remaining 25.0 percent plus 1 share in the MOL gas trading and gas storage companies. The transaction is subject to antitrust approval and is expected to close in the second half of 2005. | |
• | In December 2004, E.ON Ruhrgas made use of its right of first refusal to purchase an additional 4.0 percent interest in the project company Interconnector (UK) Limited (“Interconnector”), which operates an undersea gas pipeline linking the United Kingdom and Belgium, from another shareholder. The transaction is expected to close in the first quarter of 2005. |
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Operations |
Supply: | The purchase of natural gas under long-term contracts with foreign and domestic producers, including the Russian gas company Gazprom, the world’s largest gas producer in terms of volume, in which E.ON Ruhrgas holds a small shareholding. E.ON Ruhrgas also engages in gas exploration and production activities and, to supplement its supply as well as its sales business, in a limited amount of trading activities; | |
Transmission System: | The transmission of gas within Germany via a network of approximately 11,000 km of pipelines in which E.ON Ruhrgas holds an interest; | |
Storage: | The storage of gas in a number of large underground natural gas storage facilities; and | |
Sales: | The sale of gas within Germany to regional and supraregional distributors, municipal utilities and industrial customers, as well as the delivery of gas to a number of customers in other European countries. |
February- | |||||||||||||
Total 2004 | Total 2003 | December 2003 | |||||||||||
Purchases | billion kWh | % | billion kWh | % | billion kWh | % | |||||||
Imports | 537.4 | 83.2 | 506.6 | 82.6 | 446.2 | 82.5 | |||||||
German sources | 108.6 | 16.8 | 106.8 | 17.4 | 94.7 | 17.5 | |||||||
Total | 646.0 | 100.0 | 613.4 | 100.0 | 540.9 | 100.0 | |||||||
Sales | |||||||||||||
Domestic distributors | 328.7 | 51.2 | 326.7 | 52.9 | 282.0 | 52.8 | |||||||
Domestic municipal utilities | 156.1 | 24.3 | 159.5 | 25.8 | 136.3 | 25.5 | |||||||
Domestic industrial customers | 69.0 | 10.8 | 66.0 | 10.7 | 59.3 | 11.1 | |||||||
Sales abroad | 87.6 | 13.7 | 65.2 | 10.6 | 56.9 | 10.6 | |||||||
Total | 641.4 | 100.0 | 617.4 | 100.0 | 534.5 | 100.0 | |||||||
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February- | |||||||||||||||||||||||||
Total 2004 | Total 2003 | December 2003 | |||||||||||||||||||||||
Sources of Gas | billion kWh | % | billion kWh | % | billion kWh | % | |||||||||||||||||||
Germany | 108.6 | 16.8 | 106.8 | 17.4 | 94.7 | 17.5 | |||||||||||||||||||
Russia | 201.3 | 31.2 | 186.7 | 30.4 | 167.7 | 31 | |||||||||||||||||||
Norway | 169.6 | 26.3 | 174.4 | 28.4 | 156.4 | 28.9 | |||||||||||||||||||
The Netherlands | 124.1 | 19.2 | 100.6 | 16.4 | 81.6 | 15.1 | |||||||||||||||||||
United Kingdom | 22.8 | 3.5 | 27.3 | 4.5 | 24.8 | 4.6 | |||||||||||||||||||
Denmark | 19.3 | 3.0 | 17.6 | 2.9 | 15.7 | 2.9 | |||||||||||||||||||
Others(1) | 0.3 | 0.0 | — | — | — | — | |||||||||||||||||||
Total | 646.0 | 100.0 | 613.4 | 100.0 | 540.9 | 100.0 | |||||||||||||||||||
(1) | Italy and France. |
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Trading |
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Exploration and Production |
Liquefied Natural Gas |
Transmission System and Storage |
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E.ON | ||||
Ruhrgas Share | ||||
Project Company | % | |||
DEUDAN (DEUDAN — Deutsch/ Dänische Erdgastransport-Gesellschaft mbH & Co. KG) | 25.0 | |||
EGL (Etzel Gas-Lager Statoil Deutschland GmbH & Co) | 74.8 | |||
GHG (GHG-Gasspeicher Hannnover Gesellschaft mbH) | 13.2 | |||
MEGAL (MEGAL GmbH Mittel-Europäische-Gasleitungsgesellschaft) | 50.0 | |||
METG (Mittelrheinische Erdgastransportleitungsgesellschaft mbH)(1) | 100.0 | |||
NETG (Nordrheinische Erdgastransportleitungsgesellschaft mbH & Co. KG) | 50.0 | |||
NETRA (NETRA GmbH Norddeutsche Erdgas Transversale & Co. KG) | 41.7 | |||
TENP (Trans Europa Naturgas Pipeline GmbH) | 51.0 |
(1) | As of January 1, 2004, the wholly-owned project company Süddeutsche Erdgas Transport Gesellschaft mbH (SETG) was merged into METG. |
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![(E.ON RUHRGAS MAP)](https://capedge.com/proxy/20-F/0000950124-05-001404/k92543k9254305.gif)
Maintained | |||||||||
Total | by E.ON Ruhrgas | ||||||||
Pipelines | km | km | |||||||
Owned by E.ON Ruhrgas | 6,456 | 6,185 | |||||||
Co-owned pipelines | 1,550 | 605 | |||||||
DEUDAN (PC) | 110 | 0 | |||||||
EGL (PC) | 67 | 67 | |||||||
MEGAL (PC) | 1,080 | 1,080 | |||||||
METG (PC) | 425 | 425 | |||||||
NETG (PC) | 285 | 144 | |||||||
NETRA (PC) | 341 | 106 | |||||||
TENP (PC) | 966 | 966 | |||||||
Companies in which E.ON Ruhrgas holds a stake through its subsidiaries ERI and Thüga | — | 2,015 | |||||||
Owned by third parties | — | 1,072 | |||||||
Total in Germany | 11,280 | 12,665 | |||||||
(PC) | project company |
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Installed Capacity | |||||||||||||||||||||
of Compressor Units | |||||||||||||||||||||
Compressor Units | Monitored and | ||||||||||||||||||||
Total Installed | Monitored and | Maintained | |||||||||||||||||||
Compressor | Compressor | Capacity | Maintained by | by E.ON Ruhrgas | |||||||||||||||||
Owned by | Stations | Units | MW | E.ON Ruhrgas | MW | ||||||||||||||||
E.ON Ruhrgas (transportation and storage) | 15 | 44 | 384 | 44 | 384 | ||||||||||||||||
DEUDAN (PC) (transportation) | 2 | 4 | 16 | 0 | 0 | ||||||||||||||||
EGL (PC) (storage) | 1 | 2 | 13 | 0 | 0 | ||||||||||||||||
GHG Hannover (PC) (storage) | 1 | 3 | 4 | 0 | 0 | ||||||||||||||||
MEGAL (PC) (transportation) | 5 | 17 | 179 | 17 | 179 | ||||||||||||||||
METG (PC) (transportation) | 2 | 9 | 99 | 9 | 99 | ||||||||||||||||
NETG (PC) (transportation) | 2 | 5 | 50 | 2 | 20 | ||||||||||||||||
NETRA (PC) (transportation) | 1 | 2 | 21 | 0 | 0 | ||||||||||||||||
TENP (PC) (transportation) | 4 | 15 | 151 | 15 | 151 | ||||||||||||||||
Total in Germany | 33 | 101 | 917 | 87 | 833 | ||||||||||||||||
(PC) | project company |
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E.ON Ruhrgas’ | |||||||||||||||||||
Share in | E.ON Ruhrgas’ | ||||||||||||||||||
E.ON Ruhrgas’ | Maximum | Share in | |||||||||||||||||
Share in | Withdrawal | Storage Facility | |||||||||||||||||
Working | Rate | or in the | Operated by | ||||||||||||||||
Capacity | thousand | Project Company | E.ON | ||||||||||||||||
Underground Storage Facilities | million m3 | m3/hour | Owned by | % | Ruhrgas | ||||||||||||||
Bierwang(P) | 1,300 | 1,200 | E.ON Ruhrgas | 100.0 | Yes | ||||||||||||||
Empelde(C) | 19 | 39 | GHG-Gasspeicher | 13.2 | — | ||||||||||||||
Hannover Gesellschaft mbH (PC) | |||||||||||||||||||
Epe(C) | 1,661 | 2,450 | E.ON Ruhrgas | 100.0 | Yes | ||||||||||||||
Eschenfelden(P) | 48 | 87 | E.ON Ruhrgas/N-ERGIE AG | 66.7 | Yes | ||||||||||||||
Etzel(C) | 387 | 987 | Etzel Gas-Lager | 74.8 | — | ||||||||||||||
Statoil Deutschland GmbH & Co(PC) | |||||||||||||||||||
Hähnlein(P) | 80 | 100 | E.ON Ruhrgas | 100.0 | Yes | ||||||||||||||
Krummhörn(C)(1) | 0 | 0 | E.ON Ruhrgas | 100.0 | Yes | ||||||||||||||
Sandhausen(P) | 15 | 23 | E.ON Ruhrgas/Gasversorgung | 50.0 | Yes | ||||||||||||||
Süddeutschland GmbH | |||||||||||||||||||
Stockstadt(P) | 135 | 135 | E.ON Ruhrgas | 100.0 | Yes | ||||||||||||||
Breitbrunn(P) | 965 | (2) | 520 | RWE Dea AG/ | Leased | (3) | Yes | (4) | |||||||||||
ExxonMobil | |||||||||||||||||||
Gasspeicher Deutschland | |||||||||||||||||||
GmbH(3)/ E.ON Ruhrgas (4) | |||||||||||||||||||
Inzenham-West(P) | 500 | 300 | RWE Dea AG | Leased | — | ||||||||||||||
Nüttermoor(C) | 97 | 100 | EWE AG | Leased | — | ||||||||||||||
Total | 5,207 | 5,941 | |||||||||||||||||
(C) | salt cavern |
(P) | porous rock |
(PC) | project company |
(1) | Currently out of service for repairs/adjustments. |
(2) | 900 million m3 was contractually guaranteed in 2004; 965 million m3 is the current working gas capacity available to E.ON Ruhrgas. |
(3) | Underground section. |
(4) | Above ground part, particularly the storage compressor station. |
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Sales |
![(RUHRGAS SALES REGION MAP)](https://capedge.com/proxy/20-F/0000950124-05-001404/k92543k9254306.gif)
February- | |||||||||||||||||||||||||
Total 2004 | Total 2003 | December 2003 | |||||||||||||||||||||||
Sale of Gas to: | billion kWh | % | billion kWh | % | billion kWh | % | |||||||||||||||||||
Distributors | 328.7 | 59.3 | 326.7 | 59.2 | 282.0 | 59.1 | |||||||||||||||||||
Municipal utilities | 156.1 | 28.2 | 159.5 | 28.9 | 136.3 | 28.5 | |||||||||||||||||||
Industrial customers | 69.0 | 12.5 | 66.0 | 11.9 | 59.3 | 12.4 | |||||||||||||||||||
Total | 553.8 | 100.0 | 552.2 | 100.0 | 477.6 | 100.0 | |||||||||||||||||||
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Downstream Shareholdings |
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• | In May 2004, ERI and E.ON Energie started to simplify the shareholder structure of Avacon: ERI transferred its 39.0 percent stake in Ferngas Salzgitter, which had a 16.43 percent interest in Avacon, and its 45.0 percent stake in FSG Holding, which had a 25.0 percent stake in Ferngas Salzgitter, to E.ON Energie. For additional details, see “— Central Europe — Overview.” | |
• | In May 2004, ERI acquired a 40.13 percent interest in the Slovakian company Nafta a.s. from RWE Gas AG and as part of a compulsory tender offer following this purchase acquired a further 0.14 percent of Nafta a.s. | |
• | In August 2004, ERI acquired the remaining 25.0 percent of therminvest Sp.z o.o. (“therminvest”) from EWFE G.S. and now owns 100 percent of therminvest. | |
• | In October 2004, as part of the privatization of the Lithanian gas distributor AB Lietuvos Dujos, ERI participated in a capital increase. As a result, ERI’s shareholding in AB Lietuvos Dujos increased by 3.21 percent to 38.91 percent. | |
• | In November 2004, the gas trading business of Nova Naturgas AB (“Nova Naturgas”), in which ERI has a 29.59 percent interest, was sold to the Danish gas company DONG. | |
• | In November 2004, ERI signed contracts to acquire shareholdings in certain businesses of the Hungarian gas company MOL. For details, see “— Overview.” | |
• | During the second half of 2004, ERI increased its shareholding in the Polish district heating company Szczencinska Energetyke Cieplna Sp.z o.o. (“SECS”) by 5.76 percent to 32.0 percent through the acquisition of employee shares. |
Share held | ||||
by ERI | ||||
Shareholding | % | |||
Ferngas Nordbayern GmbH(1) | 53.10 | |||
Gas-Union GmbH(1) | 25.93 | |||
Saar Ferngas AG(1) | 20.00 | |||
HEAG Südhessische Energie AG (HSE)(2) | 21.21 | |||
EWR GmbH(2) | 20.00 | |||
Stadtwerke Neuss Energie und Wasser GmbH(2) | 15.00 |
(1) | Interest held via ERI’s fully-owned subsidiary RGE Holding GmbH. |
(2) | As part of the internal restructuring described above, these shareholdings in municipal utilities are expected to be transferred to Thüga in 2005. |
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Share held | ||||
by ERI | ||||
Shareholding | % | |||
Gasnor AS, Norway | 14.00 | |||
Nova Naturgas AB, Sweden | 29.59 | |||
Gasum Oy, Finland | 20.00 | |||
AS Eesti Gaas, Estonia | 33.66 | |||
JSC Latvijas Gaze, Latvia | 47.23 | |||
AB Lietuvos Dujos, Lithuania | 38.91 | |||
therminvest Sp.z o.o., Poland | 100.00 | |||
Inwestycyjna Spolka Energetyczna Sp.z o.o. (IRB), Poland | 50.00 | |||
Szczencinska Energetyka Cieplna Sp.z o.o. (SECS), Poland | 32.00 | |||
EUROPGAS a.s., Czech Republic(1) | 50.00 | |||
Colonia-Cluj-Napoca-Energie S.R.L. (CCNE), Romania | 33.33 | |||
E.ON Ruhrgas Mittel- und Osteuropa GmbH(2) | 100.0 | |||
Nafta a.s., Slovakia | 40.27 | |||
S.C. Congaz S.A., Romania | 28.59 | |||
Ekopur d.o.o., Slovenia(3) | 100.00 | |||
SOTEG — Société de Transport de Gaz S.A., Luxembourg | 20.00 | |||
CICG Holding S.A., Switzerland | 4.00 |
(1) | EUROPGAS a.s. holds 50.0 percent of SPP Bohemia a.s. and an indirect interest of 48.18 percent of Moravské naftové doly a.s. (MND) in the Czech Republic. |
(2) | The shareholding was transferred from E.ON Ruhrgas to ERI with effect from December 31, 2004, midnight. E.ON Ruhrgas Mittel- und Osteuropa GmbH has an indirect interest of 24.50 percent in SPP, Slovakia. |
(3) | Ekopur d.o.o. holds 6.52 percent of Geoplin d.o.o. in Slovenia. |
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• | In January 2004, as part of a lease agreement, Thüga transferred its electricity supply operations in parts of Bavaria to E.ON Bayern with effect from January 1, 2004. | |
• | In April 2004, Thüga acquired 100 percent of the Italian gas distribution and sales companies Metanifera Prealpina S.r.l. and Metanifera Prealpina com S.r.l., which together serve nearly 30,000 gas customers in Italy. | |
• | In May 2004, Thüga acquired 100 percent of the Italian gas distributor Fin.Vicu-Group, which serves approximately 100,000 gas customers in Italy. | |
• | In June 2004, Thüga acquired a 19.9 percent stake in the Udine-based Italian municipal utility AMGA Azienda Multiservizi S.p.A., which serves approximately 90,000 gas customers in Italy. | |
• | In June 2004, Thüga acquired the remaining 25.0 percent stake in Delta Gas S.r.l., an Italian gas distribution company, and now holds all of the shares of this company. | |
• | In December 2004, Thüga sold its 15.05 percent stake in MVV to EnBW as a result of an agreement between E.ON AG and EnBW. | |
• | During 2004, Thüga transferred its shareholdings in the following five Thuringian municipal utilities to the German distributor TEAG, a majority shareholding of E.ON Energie: Energieversorgung Apolda GmbH (25.1 percent), Energieversorgung Greiz GmbH (24.5 percent), Energieversorgung Nordhausen GmbH (27.9 percent), Energiewerke Zeulenroda GmbH (24.5 percent) and Stadtwerke Weimar Stadtversorgungs-GmbH (25.1 percent). |
Other |
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Competitive Environment |
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Research and Development |
Overview |
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Operations |
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Total | Total | ||||||
2004 | 2003 | % | |||||
Sources of Power | million kWh | million kWh | Change | ||||
Own production(1) | 34,916 | 35,881 | -2.7 | ||||
Purchased power from power stations in which E.ON UK has an interest of 50 percent or less(1) | 2,047 | 4,289 | -52.3 | ||||
Power purchased from other suppliers | 47,087 | 53,622 | -12.2 | ||||
Power used for operating purposes, network losses and pump storage | (1,976) | (2,238) | +11.7 | ||||
Net power supplied(2) | 82,074 | 91,554 | -10.4 | ||||
Sales of Power | |||||||
Mass market sales (residential customers and small and medium sized enterprises) | 36,189 | 37,450 | -3.4 | ||||
Industrial and commercial sales(3) | 26,528 | 34,550 | -23.2 | ||||
Market sales | 19,357 | 19,554 | -1.0 | ||||
Net power sold(2) | 82,074 | 91,554 | -10.4 | ||||
(1) | The decrease in power supplied by power stations in which E.ON UK has an interest of 50 percent or less is due to E.ON UK becoming the sole owner of the CDC power station in January 2004. This change also led to a corresponding increase in own production, partially offsetting the overall decrease in own production. |
(2) | Excluding proprietary trading volumes. For information on proprietary trading volumes, see “— Energy Trading.” |
(3) | During 2004, the industrial and commercial sales business focused on securing profitable customers, which resulted in lower sales volumes in 2004 compared with 2003. |
Total | Total | ||||||
2004 | 2003 | % | |||||
Sources of Gas | million kWh | million kWh | Change | ||||
Long-term gas supply contracts | 49,494 | 55,090 | -10.2 | ||||
Market purchases | 126,400 | 115,581 | +9.4 | ||||
Total gas supplied(1) | 175,894 | 170,671 | +3.1 | ||||
Sale and Use of Gas | |||||||
Gas used for own generation | 39,023 | 37,167 | +5.0 | ||||
Sales to industrial and commercial customers | 35,946 | 35,611 | +0.9 | ||||
Sales to retail mass market customers | 66,221 | 66,788 | -0.8 | ||||
Market sales | 34,704 | 31,105 | +11.6 | ||||
Total gas used and sold(1) | 175,894 | 170,671 | +3.1 | ||||
(1) | Excluding proprietary trading volumes. For information on proprietary trading volumes, see “— Energy Trading.” |
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Market Environment |
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• | In April 2002, the U.K. government enacted a renewables obligation requiring electricity retailers to source an increasing amount of the electricity they supply to retail customers from renewable sources. In the period from April 1, 2002 until March 31, 2003, this renewables obligation amounted to 3.0 percent of the power supplied by electricity retailers to their retail customers; in the period from April 1, 2003 until March 31, 2004, the renewables obligation increased to 4.3 percent; in the period from April 1, 2004 until March 31, 2005, the renewables obligation increased to 4.9 percent; and in the period from April 1, 2005 until March 31, 2006, the renewables obligation will increase to 5.5 percent, rising to a figure of 10.4 percent by 2010/2011. The government has announced its intention to increase the renewables obligation percentage to 15.4 percent by 2015/2016, though the increase has not yet been approved by Parliament. The requirement applies to all retail sales over a twelve-month period beginning on April 1 of each year, and Renewables Obligation Certificates (“ROCs”) are issued to generators as evidence of qualified sourcing. ROCs are tradeable, and retailers who fail to present Ofgem with ROCs representing the full amount of their renewables obligation are required to make a balancing payment in the amount of any shortfall into a buy-out fund. Receipts from the buy-out fund are re-distributed to holders of ROCs. | |
• | To implement the EU’s Emissions Trading Directive, the United Kingdom introduced a greenhouse gas emissions allowance trading scheme at the beginning of 2005. This scheme will require companies to annually match carbon dioxide (CO2) emissions with allowances issued free of charge by the government. Carbon dioxide emissions from fossil fuel-fired power plants with a thermal input exceeding 20 MW are included in this scheme. During 2004, the government published a National Allocation Plan containing initial proposals for the allocation of emission allowances to current power plants, including those owned by E.ON UK. E.ON UK expects emissions allowances for its power plants to be allocated during 2005. | |
• | The application in the United Kingdom of the EU Large Combustion Plant Directive may prevent coal-powered generation facilities that have not been fitted with specified sulphur oxide and nitrous oxide reduction measures from operating for more than a total of 20,000 hours starting in 2008. |
Energy Wholesale |
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Power Generation |
E.ON UK’s Share | |||||||||||||||||
Total | Attributable | ||||||||||||||||
Capacity | Capacity | Start-up | |||||||||||||||
Power Plants | Net MW | % | MW | Date | |||||||||||||
Hard Coal | |||||||||||||||||
Ironbridge U1(1) | 485 | 100.0 | 485 | 1970 | |||||||||||||
Ironbridge U2(1) | 485 | 100.0 | 485 | 1970 | |||||||||||||
Kingsnorth U1(1) | 485 | 100.0 | 485 | 1970 | |||||||||||||
Kingsnorth U2(1) | 485 | 100.0 | 485 | 1971 | |||||||||||||
Kingsnorth U3(1) | 485 | 100.0 | 485 | 1972 | |||||||||||||
Kingsnorth U4(1) | 485 | 100.0 | 485 | 1973 | |||||||||||||
Ratcliffe U1(2) | 500 | 100.0 | 500 | 1968 | |||||||||||||
Ratcliffe U2(2) | 500 | 100.0 | 500 | 1969 | |||||||||||||
Ratcliffe U3(2) | 500 | 100.0 | 500 | 1969 | |||||||||||||
Ratcliffe U4(2) | 500 | 100.0 | 500 | 1970 | |||||||||||||
Total | 4,910 | 4,910 | |||||||||||||||
Natural Gas | |||||||||||||||||
Cottam Development Centre (CDC) Module(3) | 400 | 100.0 | 400 | 1999 | |||||||||||||
Connahs Quay U1 | 345 | 100.0 | 345 | 1996 | |||||||||||||
Connahs Quay U2 | 345 | 100.0 | 345 | 1996 |
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E.ON UK’s Share | |||||||||||||||||
Total | Attributable | ||||||||||||||||
Capacity | Capacity | Start-up | |||||||||||||||
Power Plants | Net MW | % | MW | Date | |||||||||||||
Natural Gas (continued) | |||||||||||||||||
Connahs Quay U3 | 345 | 100.0 | 345 | 1996 | |||||||||||||
Connahs Quay U4 | 345 | 100.0 | 345 | 1996 | |||||||||||||
Corby Module | 401 | 50.0 | 200 | 1993 | |||||||||||||
Total | 2,181 | 1,980 | |||||||||||||||
Oil | |||||||||||||||||
Grain U1 | 650 | 100.0 | 650 | 1982 | |||||||||||||
Grain U4 | 650 | 100.0 | 650 | 1984 | |||||||||||||
Total | 1,300 | 1,300 | |||||||||||||||
Other (including hydroelectric and wind farms) | |||||||||||||||||
Grain Aux GT1 | 28 | 100.0 | 28 | 1979 | |||||||||||||
Grain Aux GT4 | 27 | 100.0 | 27 | 1980 | |||||||||||||
Kingsnorth Aux GT1 | 17 | 100.0 | 17 | 1967 | |||||||||||||
Kingsnorth Aux GT4 | 17 | 100.0 | 17 | 1968 | |||||||||||||
Ratcliffe Aux GT2 | 17 | 100.0 | 17 | 1967 | |||||||||||||
Ratcliffe Aux GT4 | 17 | 100.0 | 17 | 1968 | |||||||||||||
Taylors Lane GT2 | 68 | 100.0 | 68 | 1981 | |||||||||||||
Taylors Lane GT3 | 64 | 100.0 | 64 | 1979 | |||||||||||||
Hydroelectric | 50 | 100.0 | 50 | 1962 | |||||||||||||
Wind farms(4) | 197 | various | 183 | various | |||||||||||||
Total | 502 | 488 | |||||||||||||||
CHP schemes | 587 | 100.0 | 587 | various | |||||||||||||
Total Capacity | 9,480 | 9,265 | |||||||||||||||
Shutdown/ Mothballed | |||||||||||||||||
Drakelow U9 | 333 | 100.0 | 333 | 1965 | |||||||||||||
Drakelow U10 | 333 | 100.0 | 333 | 1965 | |||||||||||||
Drakelow U12 | 333 | 100.0 | 333 | 1967 | |||||||||||||
High Marnham U1 | 189 | 100.0 | 189 | 1959 | |||||||||||||
High Marnham U2 | 189 | 100.0 | 189 | 1960 | |||||||||||||
High Marnham U3 | 189 | 100.0 | 189 | 1960 | |||||||||||||
High Marnham U4 | 189 | 100.0 | 189 | 1961 | |||||||||||||
High Marnham U5 | 189 | 100.0 | 189 | 1962 | |||||||||||||
Killingholme Mod 1 | 450 | 100.0 | 450 | 1992 | |||||||||||||
Killingholme Mod 2 | 450 | 100.0 | 450 | 1993 | |||||||||||||
Total | 2,844 | 2,844 | |||||||||||||||
(1) | Biomass material co-fired during 2004. |
(2) | In November 2003, E.ON UK obtained permission from the responsible government agency to begin an 18 month trial co-burning petcoke, a mixture of coal and oil, at Ratcliffe power station. |
(3) | In January 2004, E.ON UK acquired the outstanding 50.0 percent interest in the CDC Module from Siemens Power Ventures, becoming the sole owner of the plant. |
(4) | Scroby Sands wind farm commissioned as of December 31, 2004. |
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Energy Trading |
• | Purchasing of coal, gas and oil for power stations; | |
• | Dispatching generation and selling the electrical output and ancillary services provided by E.ON UK’s power stations; | |
• | Purchasing gas and electricity as required for E.ON UK’s retail portfolio; | |
• | Managing the net position and risks of E.ON UK’s generation and retail portfolio; | |
• | Managing renewable obligations for the retail portfolio through long-term purchases and trading of ROCs; | |
• | Purchasing and/or trading of other environmental products, including Levy Exempt Certificates (issued in relation to the U.K. Climate Change Levy) and emissions products (including carbon permits); |
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• | Trading of weather derivatives, which assist in hedging volume variability in E.ON UK’s retail business; and | |
• | Achieving portfolio optimization and risk management. |
2004 | 2003 | 2004 | 2003 | |||||||||||||
Electricity | Electricity | Gas | Gas | |||||||||||||
Proprietary Trading Volumes | billion kWh | billion kWh | billion kWh(1) | billion kWh | ||||||||||||
Energy bought | 20.9 | 20.2 | 86.55 | 153.75 | ||||||||||||
Energy sold | 20.9 | 20.2 | 86.55 | 153.75 | ||||||||||||
Gross volume | 41.8 | 40.4 | 173.1 | 307.5 | ||||||||||||
(1) | Proprietary gas trading volumes decreased significantly in 2004, as risk limit restraints limited trading, reflecting both higher prices and higher volatility in the gas market in 2004. |
Retail |
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Distribution |
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Total | Total | ||||||||||||
2004 | 2003 | % | |||||||||||
Distribution of Power to | million kWh | million kWh | Change | ||||||||||
Large non-domestic customers(1) | 26,610 | 13,684 | +94.5 | ||||||||||
Domestic and small non-domestic customers(1) | 30,583 | 15,665 | +95.2 | ||||||||||
Total | 57,193 | 29,349 | +94.9 | ||||||||||
(1) | The increase in volumes is primarily attributable to the first-time inclusion of Midlands Electricity. |
Asian Asset Management |
Midlands Electricity Non-Distribution Assets |
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Overview |
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Operations |
Total 2004 | Total 2003 | % | |||||
Sources of Power | million kWh | million kWh | Change | ||||
Own generation | 33,110 | 25,595 | +29.4 | ||||
Purchased power from jointly owned power stations | 11,030 | 10,013 | +10.2 | ||||
Power purchased from outside sources | 7,376 | 6,742 | +9.4 | ||||
Total power procured(1) | 51,516 | 42,350 | +21.6 | ||||
Power used for operating purposes, network losses and pump storage | (2,054) | (1,806) | -13.7 | ||||
Total | 49,462 | 40,544 | +22.0 | ||||
Sales of Power | |||||||
Residential customers | 9,132 | 6,613 | +38.1 | ||||
Commercial customers | 14,454 | 13,496 | +7.1 | ||||
Sales partners(2)/Nordpool | 25,876 | 20,435 | +26.6 | ||||
Total(1) | 49,462 | 40,544 | +22.0 | ||||
(1) | Excluding physically-settled electricity trading activities. Nordic’s physically-settled electricity trading activities (including both purchases and sales) amounted to 44 million kWh and 40 million kWh in 2004 and 2003, respectively. |
(2) | Sales partners are co-owners in E.ON Nordic’s majority-owned power plants, primarily nuclear power plants, to which E.ON Nordic sells electricity at prices equal to the cost of production. |
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Total 2004 | Total 2003 | % | |||||
Sources of Gas | million kWh | million kWh | Change | ||||
Long-term gas supply contracts | 9,252 | 9,014 | +2.6 | ||||
Market purchases | 402 | 602 | -33.2 | ||||
Total gas supplied | 9,654 | 9,616 | +0.4 | ||||
Sale and Use of Gas | |||||||
Gas used for own generation | 2,539 | 2,637 | -3.7 | ||||
Sales to industrial and distribution customers | 6,963 | 6,798 | +2.4 | ||||
Sales to residential customers | 152 | 181 | -16.0 | ||||
Market sales | 0 | 0 | — | ||||
Total gas used and sold(1) | 9,654 | 9,616 | +0.4 | ||||
(1) | Total gas used and sold increased in 2004 due to the first-time full year inclusion of Graninge. This effect was, however, almost entirely offset by lower sales in the existing operations, mainly reflecting lower consumption of selected industrial customers and slightly higher average temperatures in 2004. |
Market Environment |
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Power Generation |
Sydkraft’s/E.ON | ||||||||||||||||
Finland’s Share | ||||||||||||||||
Total | Attributable | |||||||||||||||
Capacity | Capacity | Start-up | ||||||||||||||
Power Plants | Net MW | % | MW | Date | ||||||||||||
Nuclear | ||||||||||||||||
Barsebäck 2(S) | 600 | 25.8 | 155 | 1977 | ||||||||||||
Forsmark 1(S) | 961 | 9.3 | 90 | 1980 | ||||||||||||
Forsmark 2(S) | 954 | 9.3 | 89 | 1981 | ||||||||||||
Forsmark 3(S) | 1,185 | 10.8 | 128 | 1985 |
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Sydkraft’s/E.ON | |||||||||||||||||
Finland’s Share | |||||||||||||||||
Total | Attributable | ||||||||||||||||
Capacity | Capacity | Start-up | |||||||||||||||
Power Plants | Net MW | % | MW | Date | |||||||||||||
Nuclear (continued) | |||||||||||||||||
Oskarshamn I(S) | 467 | 54.5 | 255 | 1972 | |||||||||||||
Oskarshamn II(S) | 602 | 54.5 | 328 | 1974 | |||||||||||||
Oskarshamn III(S) | 1,160 | 54.5 | 632 | 1985 | |||||||||||||
Ringhals 1(S) | 835 | 25.8 | 215 | 1976 | |||||||||||||
Ringhals 2(S) | 872 | 25.8 | 225 | 1975 | |||||||||||||
Ringhals 3(S) | 920 | 25.8 | 237 | 1981 | |||||||||||||
Ringhals 4(S) | 915 | 25.8 | 236 | 1983 | |||||||||||||
Total | 9,471 | 2,590 | |||||||||||||||
Hydroelectric | |||||||||||||||||
Balforsen(S) | 88 | 100.0 | 88 | 1958 | |||||||||||||
Bergeforsen(S) | 160 | 44.0 | 70 | 1955 | |||||||||||||
Bjurfors nedre(S) | 78 | 100.0 | 78 | 1959 | |||||||||||||
Blasjön(S) | 60 | 50.0 | 30 | 1957 | |||||||||||||
Degerforsen(S) | 63 | 100.0 | 63 | 1965 | |||||||||||||
Edensforsen (Aseleälven)(S) | 67 | 93.7 | 63 | 1956 | |||||||||||||
Edsele(S) | 60 | 100.0 | 60 | 1965 | |||||||||||||
Forsse(S) | 52 | 100.0 | 52 | 1968 | |||||||||||||
Gulsele (Aseleälven)(S) | 64 | 65.0 | 42 | 1955 | |||||||||||||
Hällby (Aseleälven)(S) | 84 | 65.0 | 55 | 1970 | |||||||||||||
Hammarforsen(S) | 79 | 100.0 | 79 | 1928 | |||||||||||||
Harjavalta(1)(FIN) | 76 | 13.2 | 10 | 1945 | |||||||||||||
Harrsele(S) | 223 | 50.6 | 113 | 1957 | |||||||||||||
Hjälta(S) | 178 | 100.0 | 178 | 1949 | |||||||||||||
Järnvägsforsen(S) | 100 | 94.9 | 95 | 1975 | |||||||||||||
Korselbränna (Fjällsjöälven)(S) | 130 | 100.0 | 130 | 1961 | |||||||||||||
Kvistforsen(1)(S) | 140 | 100.0 | 140 | 1962 | |||||||||||||
Moforsen(S) | 135 | 100.0 | 135 | 1968 | |||||||||||||
Olden (Langan)(S) | 112 | 100.0 | 112 | 1974 | |||||||||||||
Pengfors(S) | 52 | 65.0 | 34 | 1954 | |||||||||||||
Ramsele(S) | 157 | 100.0 | 157 | 1958 | |||||||||||||
Rätan(S) | 60 | 100.0 | 60 | 1968 | |||||||||||||
Selsfors(S) | 61 | 10.6 | 6 | 1944 | |||||||||||||
Stensjön (Harkan)(S) | 95 | 50.0 | 48 | 1968 | |||||||||||||
Storfinnforsen(S) | 112 | 100.0 | 112 | 1953 | |||||||||||||
Trangfors(S) | 73 | 100.0 | 73 | 1975 | |||||||||||||
Other (<50 MW installed capacity) | 1,403 | n/a | 1,044 | n/a | |||||||||||||
Total | 3,962 | 3,127 | |||||||||||||||
Fuel Oil | |||||||||||||||||
Barsebäck GT(S) | 84 | 100.0 | 84 | 1974 | |||||||||||||
Bravalla(S) | 240 | 100.0 | 240 | 1972 | |||||||||||||
Halmstad G11(S) | 78 | 100.0 | 78 | 1973 | |||||||||||||
Halmstad G12(S) | 172 | 100.0 | 172 | 1993 |
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Sydkraft’s/E.ON | |||||||||||||||||
Finland’s Share | |||||||||||||||||
Total | Attributable | ||||||||||||||||
Capacity | Capacity | Start-up | |||||||||||||||
Power Plants | Net MW | % | MW | Date | |||||||||||||
Fuel Oil (continued) | |||||||||||||||||
Kainuun Voima (FIN) | 56 | 50.0 | 28 | 1989 | |||||||||||||
Karlshamn G1(S) | 332 | 70.0 | 232 | 1971 | |||||||||||||
Karlshamn G2(S) | 332 | 70.0 | 232 | 1971 | |||||||||||||
Karlshamn G3(S) | 326 | 70.0 | 228 | 1973 | |||||||||||||
Karskär G4(S) | 125 | 50.0 | 63 | 1968 | |||||||||||||
Öresundsverket GT(S) | 126 | 100.0 | 126 | 1971 | |||||||||||||
Oskarshamn GT(S) | 80 | 54.5 | 44 | 1973 | |||||||||||||
Other (<50 MW installed capacity) | 100 | n/a | 64 | n/a | |||||||||||||
Total | 1,995 | 1,563 | |||||||||||||||
Natural Gas | |||||||||||||||||
Heleneholm G11, G12(S)(CHP) | 130 | 100.0 | 130 | 1966 + 1970 | |||||||||||||
Suomenoja GT (FIN) | 50 | 100.0 | 50 | 1989 | |||||||||||||
Total | 180 | 180 | |||||||||||||||
Hard Coal | |||||||||||||||||
Suomenoja(2)(FIN) | 80 | 100.0 | 80 | 1977 | |||||||||||||
Wind Power | |||||||||||||||||
Sweden | 17 | n/a | 17 | n/a | |||||||||||||
Denmark | 166 | n/a | 33 | n/a | |||||||||||||
Total | 183 | 50 | |||||||||||||||
Other Power Plants | |||||||||||||||||
Abyverket G1, G2, G3(S)(CHP) | 151 | 100.0 | 151 | 1962-1974 | |||||||||||||
Händelö (Norrköping)(S)(CHP) | 100 | 100.0 | 100 | 1983 | |||||||||||||
Joensuu Bio(2)(FIN) | 65 | 100.0 | 65 | 1986 | |||||||||||||
Kainuun Voima (FIN) | 82 | 50.0 | 41 | 1989 | |||||||||||||
Karskär G3(S) | 48 | 50.0 | 24 | 1968 | |||||||||||||
Total | 446 | 381 | |||||||||||||||
Shutdown | |||||||||||||||||
Barsebäck 1(S)(Nuclear) | — | 25.8 | — | 1975 | |||||||||||||
Total | 16,317 | 7,971 | |||||||||||||||
(1) | Power plant expected to be transferred to Sydkraft’s minority shareholder Statkraft in 2005 according to an agreement in principle. |
(2) | Power plant of E.ON Finland. |
(FIN) | Located in Finland. |
(S) | Located in Sweden. |
(CHP) | Combined Heat and Power Generation. |
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Electricity Distribution |
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![(E.ON NORDIC MAP)](https://capedge.com/proxy/20-F/0000950124-05-001404/k92543k9254307.gif)
Gas Supply |
83
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Gas Distribution |
Retail |
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Trading |
2004 | 2003 | ||||||||||||
million | million | ||||||||||||
Trading of Power | kWh | kWh | % Change | ||||||||||
Power sold | 56,758 | 70,650 | -19.7 | ||||||||||
Power purchased | 48,764 | 69,537 | -29.9 | ||||||||||
Total | 105,522 | 140,187 | –24.7 | ||||||||||
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Operations |
Market Environment |
86
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Regulated Business |
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Power Generation |
LG&E Energy’s Share | |||||||||||||||||
Total | Attributable | ||||||||||||||||
Capacity | Capacity | Start-up | |||||||||||||||
Power Plants | Net MW | % | MW | Date | |||||||||||||
Hard Coal | |||||||||||||||||
Cane Run 4(1) | 155 | 100.0 | 155 | 1962 | |||||||||||||
Cane Run 5(1) | 168 | 100.0 | 168 | 1966 | |||||||||||||
Cane Run 6(1) | 240 | 100.0 | 240 | 1969 | |||||||||||||
E.W. Brown 1(2) | 101 | 100.0 | 101 | 1957 | |||||||||||||
E.W. Brown 2(2) | 167 | 100.0 | 167 | 1963 | |||||||||||||
E.W. Brown 3(2) | 429 | 100.0 | 429 | 1971 | |||||||||||||
Ghent 1(2) | 475 | 100.0 | 475 | 1974 | |||||||||||||
Ghent 2(2) | 484 | 100.0 | 484 | 1977 | |||||||||||||
Ghent 3(2) | 493 | 100.0 | 493 | 1981 | |||||||||||||
Ghent 4(2) | 493 | 100.0 | 493 | 1984 | |||||||||||||
Green River 3(2) | 68 | 100.0 | 68 | 1954 | |||||||||||||
Green River 4(2) | 95 | 100.0 | 95 | 1959 | |||||||||||||
Mill Creek 1(1) | 303 | 100.0 | 303 | 1972 | |||||||||||||
Mill Creek 2(1) | 301 | 100.0 | 301 | 1974 | |||||||||||||
Mill Creek 3(1) | 391 | 100.0 | 391 | 1978 | |||||||||||||
Mill Creek 4(1) | 477 | 100.0 | 477 | 1982 | |||||||||||||
Trimble County(1) | 511 | 75.0 | 383 | 1990 | |||||||||||||
Tyrone 3(2) | 71 | 100.0 | 71 | 1953 | |||||||||||||
Total | 5,422 | 5,294 | |||||||||||||||
Natural Gas | |||||||||||||||||
Cane Run 11(1) | 14 | 100.0 | 14 | 1968 | |||||||||||||
E.W. Brown 5(3) | 117 | 100.0 | 117 | 2001 | |||||||||||||
E.W. Brown 6(3) | 154 | 100.0 | 154 | 1999 | |||||||||||||
E.W. Brown 7(3) | 154 | 100.0 | 154 | 1999 | |||||||||||||
E.W. Brown 8(2) | 106 | 100.0 | 106 | 1995 | |||||||||||||
E.W. Brown 9(2) | 106 | 100.0 | 106 | 1994 | |||||||||||||
E.W. Brown 10(2) | 106 | 100.0 | 106 | 1995 | |||||||||||||
E.W. Brown 11(2) | 106 | 100.0 | 106 | 1996 | |||||||||||||
E.W. Brown IAC(3) | 98 | 100.0 | 98 | 2000 | |||||||||||||
Haefling 1(2) | 12 | 100.0 | 12 | 1970 | |||||||||||||
Haefling 2(2) | 12 | 100.0 | 12 | 1970 | |||||||||||||
Haefling 3(2) | 12 | 100.0 | 12 | 1970 | |||||||||||||
Paddy’s Run 11(1) | 12 | 100.0 | 12 | 1968 | |||||||||||||
Paddy’s Run 12(1) | 23 | 100.0 | 23 | 1968 |
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LG&E Energy’s Share | |||||||||||||||||
Total | Attributable | ||||||||||||||||
Capacity | Capacity | Start-up | |||||||||||||||
Power Plants | Net MW | % | MW | Date | |||||||||||||
Natural Gas (continued) | |||||||||||||||||
Paddy’s Run 13(3) | 158 | 100.0 | 158 | 2001 | |||||||||||||
Trimble County 5(3) | 160 | 100.0 | 160 | 2002 | |||||||||||||
Trimble County 6(3) | 160 | 100.0 | 160 | 2002 | |||||||||||||
Trimble County 7(3) | 160 | 100.0 | 160 | 2004 | |||||||||||||
Trimble County 8(3) | 160 | 100.0 | 160 | 2004 | |||||||||||||
Trimble County 9(3) | 160 | 100.0 | 160 | 2004 | |||||||||||||
Trimble County 10(3) | 160 | 100.0 | 160 | 2004 | |||||||||||||
Waterside 7(1) | 11 | 100.0 | 11 | 1964 | |||||||||||||
Waterside 8(1) | 11 | 100.0 | 11 | 1964 | |||||||||||||
Zorn 1(1) | 14 | 100.0 | 14 | 1969 | |||||||||||||
Total | 2,186 | 2,186 | |||||||||||||||
Oil | |||||||||||||||||
Tyrone Unit 1(2) | 27 | 100.0 | 27 | 1947 | |||||||||||||
Tyrone Unit 2(2) | 31 | 100.0 | 31 | 1948 | |||||||||||||
Total | 58 | 58 | |||||||||||||||
Hydroelectric | |||||||||||||||||
Dix Dam(2) | 24 | 100.0 | 24 | 1925 | |||||||||||||
Ohio Falls(1) | 48 | 100.0 | 48 | 1928 | |||||||||||||
Total | 72 | 72 | |||||||||||||||
LG&E Energy Regulated Business Total | 7,738 | 7,610 | |||||||||||||||
Shutdown | |||||||||||||||||
Green River 1(2) | 22 | 100.0 | 22 | 1950 | |||||||||||||
Green River 2(2) | 22 | 100.0 | 22 | 1950 | |||||||||||||
Total | 44 | 44 | |||||||||||||||
(1) | Power stations owned by LG&E. |
(2) | Power stations owned by KU. |
(3) | Power stations jointly owned by LG&E and KU. |
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Transmission |
Distribution/ Retail |
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Total 2004 | Total 2003 | ||||||||
Sales of Electric Power to | million kWh | million kWh | |||||||
Residential | 10,084 | 9,836 | |||||||
Commercial and industrial customers | 16,276 | 15,738 | |||||||
Municipals | 1,959 | 1,903 | |||||||
Other retail | 3,576 | 3,523 | |||||||
Off-system sales | 4,199 | 4,409 | |||||||
Total | 36,094 | 35,409 | |||||||
Non-regulated Businesses |
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Overview |
Residential Real Estate |
92
Table of Contents
Real Estate Development |
Overview |
93
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Operations |
Fine & | Coatings & | |||||||||||
Construction | Industrial | Performance | Advanced | Specialty | ||||||||
Chemicals | Chemicals | Materials | Fillers | Polymers | ||||||||
Admixture Systems North America | Building Blocks | Superabsorbents | Coatings & Colorants | High Performance Polymers | ||||||||
Admixture Systems Europe | Exclusive Synthesis & Catalysts | Care Specialties | Aerosil & Silanes | Specialty Acrylics | ||||||||
Admixture Systems Asia/Pacific | Peroxygen Chemicals | Oligomers & Silicones | Advanced Fillers & Pigments | Methacrylates | ||||||||
Construction Systems Americas | C4-Chemistry | Food Ingredients | Plexiglas | |||||||||
Construction Systems Europe | Feed Additives |
Oil |
94
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Distribution/ Logistics |
Aluminum |
Silicon Wafers |
Other |
95
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Overview |
96
Table of Contents
The First Electricity and Gas Directives |
The German Energy Law |
The Second Electricity and Gas Directives |
97
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• | The contribution of each energy source to the overall fuel mix of the supplier over the preceding year; and | |
• | A reference to where information is publicly available on the environmental impact of the supplier’s activities, including the amount of CO2 and radioactive waste produced. |
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Revisions of the German Energy Law |
• | if network access fees are increased before the amended Energy Law comes into force, the REGTP is required to institute market abuse proceedings immediately after the amended Energy Law comes into force; | |
• | introduction of an approval procedure for increases in network access fees after entry into force of the amended Energy Law and before the introduction of an incentive regulation; and | |
• | immediate creation of conditions for an incentive regulation and introduction within two years (at the latest) after the amended Energy Law has entered into force. |
European Regulation on Cross-Border Trading |
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Greenhouse Gas Emissions Trading |
100
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Legislative Package on Energy Infrastructure and Security of Supply |
• | Directive proposal on measures to safeguard security of electricity supply and infrastructure investment.This proposed directive provides for the introduction of minimum technical standards for grid operators to provide security of electricity supply. In addition, transmission system operators will be required to submit their investment plans for cross border interconnection to the national authorities on a regular basis. | |
• | Directive proposal on energy end-use efficiency and energy services.This proposed directive sets an annual reduction target of one percent for energy used in each member state, which would be achieved by boosting energy efficiency measures in the EU. | |
• | Regulation proposal on conditions for access to gas transmission networks.This proposed regulation covers access to all gas transmission networks in the EU, and addresses a number of issues such as access charges, third party access services, capacity allocation mechanisms, congestion management, transparency requirements, balancing and imbalance charges, secondary markets, and information and confidentiality provisions. The regulation proposal also requires the establishment of a committee of national experts chaired by the EU Commission, which will have the authority to revise the rules annexed to the regulation. |
Security of Energy Supply (Gas) |
• | Member states must adopt adequate minimum security of supply standards, and | |
• | A “three step procedure” will take effect in the event of a major supply disruption for a significant period of time. Under the “three step procedure”, the gas industry should take measures as a first response to such a disruption, followed by national measures taken by member states. In the event of inadequate measures at the national level, the Gas Coordination Group, consisting of representatives of member states, the gas industry and relevant consumers under the chairmanship of the European Commission, would then decide on necessary measures. |
Markets in Financial Instruments Directive |
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The Electricity Feed-in Law and the Renewable Energy Law |
• | Fixed tariffs for renewable energies:Tariffs for renewable energies are fixed. For wind turbines coming online in 2005, the tariff is fixed at 8.53€cent/kWh. This tariff is limited in time, with a general term of five years that may be extended up to 20 years depending upon the actual production volume of the installation. After five years, the tariff is reduced to 5.39€cent/kWh if 150 percent or more of a reference production, which is the potential production of the installed wind turbine operating with a constant wind speed of five meters per second over five years, has been produced. In addition, the fixed tariff is reduced by two percent for new wind turbines every year. For wind turbines coming online in 2006, this means a reduction to 8.36€cent/kWh and 5.28€cent/kWh respectively. | |
• | National burden sharing:The Renewable Energy Law assumes that the subsidy obligation would be passed on in full to the supplying companies. At the transmission company level, there is an equalization process covering the whole country. Each transmission company first determines how much electricity it takes up under the Renewable Energy Law and how much electricity in total flows in its region to end users. An equalization will then be effected among all transmission companies so that all transmission companies take on and subsidize proportionally equivalent amounts of renewable electricity under the statute. The transmission company will then pass these quantities of electricity and the corresponding costs on to the suppliers delivering electricity to end users in its region in proportion to their respective sales. |
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Co-Generation Protection Law |
• | CHP plants that were commissioned before 1990 received 1.53€cent/kWh in 2002 and 2003 and 1.38 €cent/kWh in 2004, and will receive 1.38€cent/kWh in 2005 and 0.97 €cent/kWh in 2006; | |
• | CHP plants that were commissioned after 1990 received 1.53€cent/kWh in 2002 and 2003 and 1.38 €cent/kWh in 2004, and will receive 1.38€cent/kWh in 2005, 1.23€cent/kWh in 2006 and 2007, 0.82 €cent/kWh in 2008, and 0.56€cent/kWh in 2009; | |
• | CHP plants that are modernized received 1.74€cent/kWh in 2002 and 2003 and 1.74€cent/kWh in 2004, and will receive 1.69€cent/kWh in 2005 and 2006, 1.64€cent/kWh in 2007 and 2008, and 1.59 €cent/kWh in 2009 and 2010; and | |
• | Small CHP plants with an installed capacity of less than two MW received 2.56€cent/kWh in 2002 and 2003 and 2.4€cent/kWh in 2004, and will receive 2.4€cent/kWh in 2005, 2.25€cent/kWh in 2006 and 2007, 2.1€cent/kWh in 2008 and 2009, and 1.94€cent/kWh in 2010. |
Electricity Grid Access |
Electricity Rate Regulation |
103
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Gas Grid Access |
Gas Rates |
104
Table of Contents
Electricity |
105
Table of Contents
Gas |
Sweden |
106
Table of Contents
Finland |
107
Table of Contents
Retail Electric Rate Regulation |
108
Table of Contents
Retail Gas Rate Regulation |
Transmission Developments |
Other Regulations |
109
Table of Contents
110
Table of Contents
111
Table of Contents
112
Table of Contents
113
Table of Contents
114
Table of Contents
Germany |
115
Table of Contents
Europe |
United Kingdom |
116
Table of Contents
Sweden/ Finland |
United States |
117
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Percentage | Percentage | |||||||||||
Country of | Ownership Interest | Voting Interest | ||||||||||
Name of Subsidiary | Incorporation | held by E.ON | held by E.ON | |||||||||
E.ON Energie AG (energy) | Germany | 100.0 | % | 100.0 | % | |||||||
E.ON Ruhrgas AG (energy) | Germany | 100.0 | % | 100.0 | % | |||||||
E.ON UK Limited (energy) | U.K. | 100.0 | % | 100.0 | % | |||||||
E.ON Nordic AB (energy) | Sweden | 100.0 | % | 100.0 | % | |||||||
LG&E Energy LLC (energy) | USA | 100.0 | % | 100.0 | % | |||||||
Viterra AG (real estate) | Germany | 100.0 | % | 100.0 | % |
Central Europe |
Pan-European Gas |
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U.K. |
Nordic |
U.S. Midwest |
119
Table of Contents
Other Activities |
120
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121
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• | In May, E.ON Energie increased its 46.0 percent interest in EAM, a regional utility based in Kassel, Germany, to a majority interest. E.ON Energie fully consolidated EAM as of June 1, 2002. As of December 31, 2002, E.ON Energie held 73.3 percent of EAM. | |
• | In June, E.ON Energie purchased a 100 percent interest in EWB from the Finnish utility Fortum. EWB was a holding company with a 100 percent ownership interest in Elektrizitätswerk Wesertal GmbH (“EWW”), a regional utility in Hameln, Germany. Both companies were fully consolidated as of July 1, 2002. | |
• | In July, E.ON Energie acquired an additional 30.1 percent interest in Elektrizitätswerk Minden-Ravensberg (“EMR”), a regional utility in Herford, Germany, from municipal shareholders, giving E.ON Energie a total interest in EMR of 55.2 percent. EMR was fully consolidated as of August 1, 2002. | |
• | In September, E.ON Energie acquired a 49.0 percent interest in ZSE, the largest regional utility company in Slovakia. ZSE is accounted for under the equity method. | |
• | In November, E.ON Energie acquired an additional 62.9 percent interest in ÉDÁSZ, a regional Hungarian utility, thereby increasing its stake in ÉDÁSZ to 90.6 percent. ÉDÁSZ was fully consolidated effective December 1, 2002. |
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• | In January, E.ON and E.ON Energie sold their indirect shareholdings of 6.5 percent each in STEAG AG (“STEAG”), a German independent power producer, to RAG. | |
• | In March, E.ON Energie reduced its shareholding in Sydkraft by transferring 5.8 percent of its interest to Statkraft. | |
• | In July, E.ON Energie disposed of its entire 24.5 percent interest in Watt AG, a Swiss utility, to Nordostschweizerische Kraftwerke AG. |
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• | In July 2003, E.ON Energie and E.ON Ruhrgas each agreed to sell a 22.0 percent stake in Bayerngas to the municipal utilities of the cities of Munich, Augsburg, Regensburg and Ingolstadt, and to the city of Landshut, for a total of€127 million. The transaction was completed in November 2003. E.ON Energie realized a gain on the disposal in the amount of€22 million. No gain was realized on the sale of the E.ON Ruhrgas stake, as these shares had been recorded at their fair value at the time of E.ON’s acquisition of Ruhrgas. | |
• | In September 2003, E.ON Energie sold its 80.5 percent interest in Gelsenwasser to a joint venture company owned by the municipal utilities of the cities of Dortmund and Bochum. Gelsenwasser was accounted for as a discontinued operation in the Consolidated Financial Statements. For further information, see “Discontinued Operations” below. | |
• | In October 2003, E.ON Energie transferred its 5.26 percent stake in VNG to E.ON Ruhrgas, which already owned an interest in this Leipzig-based gas distributor. In December 2003, E.ON Ruhrgas agreed to sell 32.1 percent of VNG to EWE, and offered its remaining 10.0 percent stake in VNG to eleven municipalities in eastern Germany for the same price per share. The total consideration for the sale of the entire interest was approximately€899 million. E.ON Energie realized a gain of approximately€60 million on its stake. No gain was realized on the sale of the E.ON Ruhrgas stake, as these shares had been recorded at their fair value at the time of E.ON’s acquisition of Ruhrgas. The sales were subject to the fulfillment of a number of conditions and were completed in January 2004. | |
• | In November 2003, E.ON Energie divested its 100 percent interest in E.ON-Energiebeteiligungs-Gesellschaft to EWE for€305 million. E.ON Energiebeteiligungs-Gesellschaft had a 32.36 percent interest in swb, comprising all of the shares previously held by E.ON Energie and E.ON Ruhrgas. E.ON Energie realized a gain on the disposal in the amount of€85 million. No gain was realized on the sale of the E.ON Ruhrgas stake, as these shares had been recorded at their fair value at the time of E.ON’s acquisition of Ruhrgas. |
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• | In December 2003, E.ON concluded an agreement to divest its stake in EWE. E.ON Energie’s 27.4 percent stake in EWE was acquired by EWE’s majority shareholders Energieverband Elbe-Weser Beteiligungsholding GmbH and Weser-Ems Energiebeteiligungen GmbH for total consideration of approximately€520 million. E.ON recorded a gain of€257 million on the disposal, which was completed in January 2004. |
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• | Currency, electricity, gas, oil and coal forward contracts, swaps, and emission rights derivatives are valued separately at future rates or market prices as of the balance sheet date. The fair values of spot and forward contracts are based on spot prices that consider forward premiums or discounts from quoted prices in the relevant markets. | |
• | Market prices for currency, electricity and gas options are obtained using standard option pricing models commonly used in the market. The fair values of caps, floors, and collars are determined on the basis of quoted market prices or on calculations based on option pricing models. | |
• | The fair values of existing instruments to hedge interest rate risk are determined by discounting future cash flows using market interest rates over the remaining term of the instrument. Discounted cash values are determined for interest rate, cross-currency and cross-currency/interest rate swaps for each individual transaction as of the balance sheet date. Interest income is considered with an effect on current results at the date of payment or accrual. | |
• | Equity swaps are valued on the basis of the stock prices of the underlying equities, taking into consideration any financing components. | |
• | Exchange-traded energy future and option contracts are valued individually at daily settlement prices determined on the futures markets that are published by their respective clearing houses. Initial margins paid are disclosed under other assets. Variation margins received or paid during the term of such contracts are stated under other liabilities or other assets, respectively, and are accounted for with an impact on earnings at settlement or realization. | |
• | Certain long-term commodity contracts are valued by the use of valuation models that include average probabilities and take into account individual contract details and variables. |
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• | SFAS No. 151, Inventory Costs — an amendment of ARB No. 43, Chapter 4; | |
• | SFAS No. 153, Exchanges of Nonmonetary Assets — an amendment of APB Opinion No. 29; and | |
• | SFAS No. 123 (revised 2004), Share-Based Payment. |
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2004 | 2003 | ||||||||||||||||
Adjusted | Adjusted | ||||||||||||||||
Sales | EBIT | Sales | EBIT | ||||||||||||||
(€ in millions) | |||||||||||||||||
Central Europe(1)(2) | 20,752 | 3,602 | 19,253 | 2,979 | |||||||||||||
Pan-European Gas(3) | 14,426 | 1,428 | 12,973 | 1,463 | |||||||||||||
U.K. | 8,490 | 1,017 | 7,923 | 610 | |||||||||||||
Nordic(4) | 3,347 | 701 | 2,824 | 546 | |||||||||||||
U.S. Midwest(2) | 1,913 | 349 | 1,971 | 317 | |||||||||||||
Corporate Center(2)(5) | (813 | ) | (314 | ) | (596 | ) | (319 | ) | |||||||||
Core Energy Business | 48,115 | 6,783 | 44,348 | 5,596 | |||||||||||||
Other Activities(2)(6) | 988 | 578 | 2,079 | 632 | |||||||||||||
Total | 49,103 | 7,361 | 46,427 | 6,228 | |||||||||||||
(1) | Sales include electricity taxes of€1,051 million in 2004 and€1,015 million in 2003. |
(2) | Excludes the sales and adjusted EBIT of certain activities now accounted for as discontinued operations. For more details, see “— Acquisitions and Dispositions — Discontinued Operations” and Note 4 of the Notes to Consolidated Financial Statements. |
(3) | Includes the results of the former Ruhrgas activities from the date of consolidation on February 1, 2003. Sales include natural gas and electricity taxes of€2,923 million in 2004 and€2,555 million in 2003. |
(4) | Sales include electricity and natural gas taxes of€395 million in 2004 and€324 million in 2003. |
(5) | Includes primarily the parent company and effects from consolidation (including the elimination of intersegment sales), as well as the results of the former telecommunications division, as explained in “Item 4. |
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Information on the Company — Business Overview — Introduction.” Sales between companies in the same market unit are eliminated in calculating sales on the market unit level. | |
(6) | In 2003, includes sales of Degussa for the month of January only, prior to its deconsolidation. For more details, see “Item 4. Information on the Company — Business Overview — Other Activities — Degussa — Overview” and Note 4 of the Notes to Consolidated Financial Statements. |
E.ON Group |
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2004 | 2003 | |||||||
(€ in millions) | ||||||||
Adjusted EBIT | 7,361 | 6,228 | ||||||
Adjusted interest income, net | (1,140 | ) | (1,663 | ) | ||||
Net book gains | 589 | 1,257 | ||||||
Cost-management and restructuring expenses | (108 | ) | (479 | ) | ||||
Other non-operating results | 97 | 195 | ||||||
Income/(loss) from continuing operations before income taxes and minority interests | 6,799 | 5,538 | ||||||
Income taxes | (1,947 | ) | (1,124 | ) | ||||
Minority interests | (504 | ) | (464 | ) | ||||
Income/(loss) from continuing operations | 4,348 | 3,950 | ||||||
Income/(loss) from discontinued operations | (9 | ) | 1,137 | |||||
Cumulative effect of change in accounting principles | — | (440 | ) | |||||
Net income | 4,339 | 4,647 | ||||||
2004 | 2003 | |||||||
(€ in millions) | ||||||||
Interest income and similar expenses (net) as shown in Note 6 of the Notes to Consolidated Financial Statements | (1,141 | ) | (1,107 | ) | ||||
(+) Non-operating interest income, net(1) | 138 | (62 | ) | |||||
(-) Interest portion of long-term provisions | 137 | 494 | ||||||
Adjusted interest income, net | (1,140 | ) | (1,663 | ) | ||||
(1) | This net figure is calculated by adding in non-operating interest expense and subtracting non-operating interest income. |
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Central Europe |
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Percent | ||||||||||||||
2004 | 2003(1) | Change | ||||||||||||
(€ in millions) | ||||||||||||||
Central Europe West | 17,576 | 16,814 | +4.5 | |||||||||||
Power | 14,597 | 13,662 | +6.8 | |||||||||||
Gas | 2,979 | 3,152 | -5.5 | |||||||||||
Central Europe East | 1,877 | 1,308 | +43.5 | |||||||||||
Other/Consolidation | 248 | 116 | +113.8 | |||||||||||
Total | 19,701 | 18,238 | +8.0 | |||||||||||
(1) | Excludes sales of Thüga and the activities transferred to the Pan-European Gas market unit and those of Sydkraft and the other businesses of E.ON Nordic. |
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Percent | ||||||||||||||
2004 | 2003(1) | Change | ||||||||||||
(€ in millions) | ||||||||||||||
Central Europe West | 3,311 | 2,819 | +17.5 | |||||||||||
Power | 2,996 | 2,530 | +18.4 | |||||||||||
Gas | 315 | 289 | +9.0 | |||||||||||
Central Europe East | 235 | 172 | +36.6 | |||||||||||
Other/Consolidation | 56 | (12 | ) | — | ||||||||||
Total | 3,602 | 2,979 | +20.9 | |||||||||||
(1) | Excludes results of Thüga and the activities transferred to the Pan-European Gas market unit and those of Sydkraft and the other businesses of E.ON Nordic. |
Pan-European Gas |
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Percent | |||||||||||||
2004 | 2003(1) | Change | |||||||||||
(€ in millions) | |||||||||||||
Up-/ Midstream | 9,274 | 8,360 | +10.9 | ||||||||||
Downstream | 1,358 | 1,326 | +2.4 | ||||||||||
Other/ Consolidation | 871 | 732 | +19.0 | ||||||||||
Total | 11,503 | 10,418 | +10.4 | ||||||||||
(1) | Includes sales of the former Ruhrgas activities for the period from February 1 to December 31 and those of Thüga and the other transferred activities for the full year. |
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Percent | |||||||||||||
2004 | 2003(1) | Change | |||||||||||
(€ in millions) | |||||||||||||
Up-/ Midstream | 862 | 923 | -6.6 | ||||||||||
Downstream Shareholdings | 486 | 484 | +0.4 | ||||||||||
Other/Consolidation | 80 | 56 | +42.9 | ||||||||||
Total | 1,428 | 1,463 | -2.4 | ||||||||||
(1) | Includes results of the former Ruhrgas activities for the period from February 1 to December 31 and those of Thüga and the other transferred activities for the full year. |
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U.K. |
Percent | |||||||||||||
2004 | 2003 | Change | |||||||||||
(€ in millions) | |||||||||||||
Non-regulated Business | 7,788 | 7,682 | +1.4 | ||||||||||
Regulated Business | 941 | 438 | +114.8 | ||||||||||
Other/ Consolidation | (239 | ) | (197 | ) | -21.3 | ||||||||
Total | 8,490 | 7,923 | +7.2 | ||||||||||
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Percent | |||||||||||||
2004 | 2003 | Change | |||||||||||
(€ in millions) | |||||||||||||
Non-regulated Business | 626 | 412 | +51.9 | ||||||||||
Regulated Business | 446 | 225 | +98.2 | ||||||||||
Other/ Consolidation | (55 | ) | (27 | ) | -103.7 | ||||||||
Total | 1,017 | 610 | +66.7 | ||||||||||
Nordic |
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Percent | |||||||||||||
2004 | 2003 | Change | |||||||||||
(€ in millions) | |||||||||||||
Sweden | 2,714 | 2,216 | +22.5 | ||||||||||
Finland | 238 | 284 | -16.2 | ||||||||||
Total | 2,952 | 2,500 | +18.1 | ||||||||||
Percent | |||||||||||||
2004 | 2003 | Change | |||||||||||
(€ in millions) | |||||||||||||
Sweden | 662 | 484 | +36.8 | ||||||||||
Finland | 39 | 62 | +37.1 | ||||||||||
Total | 701 | 546 | +28.4 | ||||||||||
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U.S. Midwest |
Percent | |||||||||||||
2004 | 2003 | Change | |||||||||||
(€ in millions) | |||||||||||||
Regulated Business | 1,643 | 1,663 | -1.2 | ||||||||||
Non-regulated Business | 270 | 308 | -12.3 | ||||||||||
Total | 1,913 | 1,971 | -2.9 | ||||||||||
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Percent | |||||||||||||
2004 | 2003 | Change | |||||||||||
(€ in millions) | |||||||||||||
Regulated Business | 339 | 306 | +10.8 | ||||||||||
Non-regulated Business | 10 | 11 | -9.1 | ||||||||||
Total | 349 | 317 | +10.1 | ||||||||||
Corporate Center |
Other Activities |
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2003 | 2002 | ||||||||||||||||
Internal | Internal | ||||||||||||||||
Operating | Operating | ||||||||||||||||
Profit | Profit | ||||||||||||||||
Sales | (Loss) | Sales | (Loss) | ||||||||||||||
(€ in millions) | |||||||||||||||||
E.ON Energie(1)(2) | 22,642 | 3,058 | 19,142 | 2,782 | |||||||||||||
Ruhrgas(3) | 12,085 | 1,128 | — | — | |||||||||||||
Powergen(2)(4) | 9,894 | 620 | 4,422 | 329 | |||||||||||||
Other/consolidation(2)(5) | (273 | ) | (693 | ) | 81 | (152 | ) | ||||||||||
Core Energy Business | 44,348 | 4,113 | 23,645 | 2,959 | |||||||||||||
Viterra(2) | 1,085 | 295 | 1,214 | 203 | |||||||||||||
Degussa(2)(6) | 994 | 157 | 11,765 | 655 | |||||||||||||
Other Activities | 2,079 | 452 | 12,979 | 858 | |||||||||||||
Total(7) | 46,427 | 4,565 | 36,624 | 3,817 | |||||||||||||
(1) | Sales include electricity taxes of€1,371 million in 2003 and€933 million in 2002. |
(2) | Excludes the sales and internal operating profit of certain activities now accounted for as discontinued operations. For more details, see “— Acquisitions and Dispositions — Discontinued Operations” and Note 4 of the Notes to Consolidated Financial Statements. |
(3) | Includes the results of the former Ruhrgas activities from the date of consolidation on February 1, 2003. Sales for the period include natural gas taxes of€2,525 million. |
(4) | Includes the results of the Powergen Group from the date of consolidation on July 1, 2002. |
(5) | Includes primarily the parent company and effects from consolidation, as well as the results of the former telecommunications division, as explained in “Item 4. Information on the Company — Business Overview — Introduction.” |
(6) | In 2003, includes results of Degussa for the month of January only, prior to its deconsolidation. For more details, see “Item 4. Information on the Company — Business Overview — Other Activities — Degussa — Overview” and Note 4 of the Notes to Consolidated Financial Statements. |
(7) | Excludes intercompany sales. |
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E.ON Group |
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2003 | 2002 | |||||||
(€ in millions) | ||||||||
Group internal operating profit | 4,565 | 3,817 | ||||||
Net book gains | 1,257 | 1,071 | ||||||
Cost-management and restructuring expenses | (479 | ) | (331 | ) | ||||
Other non-operating results | 195 | (5,316 | ) | |||||
Income/(loss) from continuing operations before income taxes and minority interests | 5,538 | (759 | ) | |||||
Income taxes | (1,124 | ) | 662 | |||||
Minority interests | (464 | ) | (623 | ) | ||||
Income/(loss) from continuing operations | 3,950 | (720 | ) | |||||
Income/(loss) from discontinued operations | 1,137 | 3,306 | ||||||
Cumulative effect of change in accounting principles | (440 | ) | 191 | |||||
Net income | 4,647 | 2,777 | ||||||
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E.ON Energie |
Percent | |||||||||||||
2003 | 2002 | Change | |||||||||||
(€ in millions) | |||||||||||||
In Germany(1) | 16,057 | 14,020 | +14.5 | ||||||||||
Electricity(1) | 12,905 | 11,408 | +13.1 | ||||||||||
Gas | 3,152 | 2,612 | +20.7 | ||||||||||
Outside Germany(1) | 4,688 | 3,586 | +30.7 | ||||||||||
Other/consolidation(1)(2) | 526 | 603 | -12.8 | ||||||||||
Total(1) | 21,271 | 18,209 | +16.8 | ||||||||||
(1) | Excludes electricity taxes. |
(2) | For 2003, includes sales of Thüga, as to which E.ON Energie transferred the majority of its interest to Ruhrgas as of December 31, 2003. To facilitate the comparison, the sales data for 2002 have been conformed to reflect this new presentation, as well as to reflect the changes made to the organizational structure of E.ON Energie’s business units effective January 1, 2003. |
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Ruhrgas |
February 1 to | |||||
December 31, 2003 | |||||
(€ in millions) | |||||
Gas business(1) | 8,504 | ||||
Industrial business | 1,056 | ||||
Total(1) | 9,560 | ||||
(1) | Excludes natural gas taxes. |
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Powergen |
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July 1 to | |||||||||||||
December 31, | Percent | ||||||||||||
2003 | 2002 | Change | |||||||||||
(€ in millions) | |||||||||||||
U.K. Operations | 7,923 | 3,162 | +150.6 | ||||||||||
U.S. Operations | 1,971 | 1,260 | +56.4 | ||||||||||
Total | 9,894 | 4,422 | +123.7 | ||||||||||
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Viterra |
Degussa |
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Other/consolidation |
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2004 | 2003 | |||||||||||||||||
Cash from | Capital | Cash from | Capital | |||||||||||||||
Operations | Expenditures | Operations | Expenditures | |||||||||||||||
(€ in millions) | ||||||||||||||||||
Central Europe(2) | 2,938 | 2,527 | 4,081 | 2,126 | ||||||||||||||
Pan-European Gas | 1,016 | 660 | 1,027 | (3) | 667 | (3) | ||||||||||||
U.K. | 633 | 503 | 315 | 388 | ||||||||||||||
Nordic | 957 | 740 | 773 | 1,265 | ||||||||||||||
U.S. Midwest(2) | 182 | 277 | 188 | 443 | ||||||||||||||
Corporate Center(2) | 241 | 434 | (855 | ) | 4,147 | (4) | ||||||||||||
Core Energy Business | 5,967 | 5,141 | 5,529 | 9,036 | ||||||||||||||
Other Activities(2) | 5 | 144 | 9 | 160 | ||||||||||||||
Total | 5,972 | 5,285 | 5,538 | 9,196 | ||||||||||||||
(1) | For a detailed description of capital expenditures by purchases of financial assets and purchases of other fixed assets, see Note 27 of the Notes to Consolidated Financial Statements. |
(2) | Excludes the cash from operations and capital expenditures of certain activities now accounted for as discontinued operations. For more details, see “— Acquisitions and Dispositions — Discontinued Operations” and Note 4 of the Notes to Consolidated Financial Statements. |
(3) | Includes the cash flows of the former Ruhrgas activities for the period from February 1 to December 31 and those of Thüga and other transferred activities for the full year. |
(4) | Includes the acquisition of shares of Ruhrgas in 2003. |
Capital Expenditures in 2004 Compared with 2003 |
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2003 | 2002 | |||||||||||||||||
Cash from | Capital | Cash from | Capital | |||||||||||||||
Operations | Expenditures | Operations | Expenditures | |||||||||||||||
(€ in millions) | ||||||||||||||||||
E.ON Energie(2) | 5,040 | 3,521 | 3,246 | 6,125 | ||||||||||||||
Ruhrgas(3) | 791 | 463 | — | — | ||||||||||||||
Powergen(2)(4) | 493 | 842 | 373 | 3,094 | ||||||||||||||
Other/consolidation(2) | (795 | ) | 4,210 | (5) | (897 | ) | 13,448 | (5) | ||||||||||
Core Energy Business | 5,529 | 9,036 | 2,722 | 22,667 | ||||||||||||||
Viterra(2) | 102 | 124 | 51 | 378 | ||||||||||||||
Degussa(2) | (93 | ) | 36 | 841 | 1,114 | |||||||||||||
Other Activities | 9 | 160 | 892 | 1,492 | ||||||||||||||
Total | 5,538 | 9,196 | 3,614 | 24,159 | ||||||||||||||
(1) | For a detailed description of capital expenditures by purchases of financial assets and purchases of other fixed assets, see Note 27 of the Notes to Consolidated Financial Statements. |
(2) | Excludes the cash from operations and capital expenditures of certain activities now accounted for as discontinued operations. For more details, see “— Acquisitions and Dispositions — Discontinued Operations” and Note 4 of the Notes to Consolidated Financial Statements. |
(3) | Includes the cash flows of the former Ruhrgas activities from the date of consolidation on February 1, 2003. |
(4) | Includes the cash flows of the Powergen Group from the date of consolidation on July 1, 2002. |
(5) | Includes the acquisition of the Powergen Group in 2002 and shares of Ruhrgas in both 2002 and 2003. |
Capital Expenditures in 2003 Compared with 2002 |
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Fair value of contracts outstanding at the beginning of the period | (72.7 | ) | ||
Change to scope of consolidation | 0.0 | |||
Contracts realized or otherwise settled during the period | 82.0 | |||
Fair value of new contracts entered into during the period | 29.3 | |||
Changes in fair values attributable to changes in valuation techniques and assumptions | (18.8 | ) | ||
Other changes in fair values | 362.7 | |||
Fair value of contracts outstanding at the end of the period | 382.5 | |||
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Fair Value of Contracts at Period-End | ||||||||||||||||||||
Maturity | Maturity in | |||||||||||||||||||
less than | Maturity | Maturity | excess of | Total | ||||||||||||||||
Source of Fair Value | 1 year | 1-3 years | 4-5 years | 5 years | Fair Value | |||||||||||||||
(€ in millions) | ||||||||||||||||||||
Prices actively quoted | 160.6 | 274.2 | 0.6 | 0.0 | 435.4 | |||||||||||||||
Prices provided by other external sources | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||||||||||||||
Prices based on models and other valuation methods | (11.3 | ) | (11.7 | ) | (4.8 | ) | (25.1 | ) | (52.9 | ) |
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Payments Due by Period | ||||||||||||||||||||
Less than | More than | |||||||||||||||||||
Contractual Obligations | Total | 1 year | 1-3 years | 3-5 years | 5 years | |||||||||||||||
(€ in millions) | ||||||||||||||||||||
Financial Liabilities | 20,576 | 7,036 | 1,888 | 5,539 | 6,113 | |||||||||||||||
Capital Lease Obligations | 168 | 35 | 69 | 38 | 26 | |||||||||||||||
Operating Leases | 1,179 | 109 | 181 | 151 | 738 | |||||||||||||||
Purchase Obligations | 112,041 | 11,445 | 17,381 | 21,341 | 61,874 | |||||||||||||||
Asset Retirement Obligations | 9,088 | 182 | 312 | 287 | 8,307 | |||||||||||||||
Pension Payments | 9,133 | 814 | 1,696 | 1,788 | 4,835 | |||||||||||||||
Other Long-Term Obligations | 12,418 | 832 | 3,001 | 5,028 | 3,557 | |||||||||||||||
Total Contractual Obligations | 164,603 | 20,453 | 24,528 | 34,172 | 85,450 | |||||||||||||||
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Item 6. | Directors, Senior Management and Employees. |
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Year First | ||||||||||
Name and Position Held | Age | Principal Occupation | Elected | |||||||
Ulrich Hartmann(1)(2)*(3)* | 66 | Retired Co-Chief Executive Officer of | 2003 | |||||||
Chairman of the Supervisory Board | E.ON AG; formerly Chairman of the Board of Management and Chief Executive Officer of VEBA AG | |||||||||
Supervisory Board Memberships/Directorships: | ||||||||||
Deutsche Bank AG, Deutsche Lufthansa AG, Hochtief AG, IKB Deutsche Industriebank AG (Chairman), Münchener Rückversicherungs- Gesellschaft AG, Arcelor(4), Henkel KGaA(4) | ||||||||||
Hubertus Schmoldt(2)(3)(5) | 59 | Chairman of the Board of Management of | 1996 | |||||||
Deputy Chairman of the Supervisory Board | Industriegewerkschaft Bergbau, Chemie, Energie | |||||||||
Supervisory Board Memberships/ Directorships: | ||||||||||
Bayer AG, BHW AG, DOW Olefinverbund GmbH, Deutsche BP AG, RAG Aktiengesellschaft |
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Year First | ||||||||||
Name and Position Held | Age | Principal Occupation | Elected | |||||||
Günter Adam(5) | 46 | Chairman of the Central Works Council, | 2002 | |||||||
Member of the Supervisory Board | Degussa AG | |||||||||
Supervisory Board Memberships/ Directorships: | ||||||||||
Degussa AG | ||||||||||
Dr. Karl-Hermann Baumann(1)* | 69 | Chairman of the Supervisory Board of | 2000 | |||||||
Member of the Supervisory Board | Siemens AG (until January 27, 2005); formerly member of the Board of Management of Siemens AG | |||||||||
Supervisory Board Memberships/ Directorships: | ||||||||||
Deutsche Bank AG, Linde AG, Schering AG, ThyssenKrupp AG | ||||||||||
Ralf Blauth(1)(2)(5) | 53 | Chairman of the Combined Works Council, | 1996 | |||||||
Member of the Supervisory Board | Degussa AG | |||||||||
Supervisory Board Memberships/ Directorships: | ||||||||||
Degussa AG, RAG Aktiengesellschaft | ||||||||||
Dr. Rolf-E. Breuer | 67 | Chairman of the Supervisory Board of | 1997 | |||||||
Member of the Supervisory Board | Deutsche Bank AG; formerly Spokesman of the Board of Management of Deutsche Bank AG | |||||||||
Supervisory Board Memberships/ Directorships: | ||||||||||
Bertelsmann AG, Deutsche Börse AG (Chairman), Compagnie de Saint-Gobain S.A.(4), Landwirtschaftliche Rentenbank(4), Kreditanstalt für Wiederaufbau(4) | ||||||||||
Dr. Gerhard Cromme(3) | 61 | Chairman of the Supervisory Board of | 1993 | |||||||
Member of the Supervisory Board | ThyssenKrupp AG | |||||||||
Supervisory Board Memberships/ Directorships: | ||||||||||
Allianz AG, Axel Springer AG, Deutsche Lufthansa AG, E.ON Ruhrgas AG, Hochtief AG, Siemens AG, Volkswagen AG, Suez S.A.(4), BNP Paribas S.A.(4) | ||||||||||
Wolf-Rüdiger Hinrichsen(3)(5) | 49 | Head of the Economic Affairs Department | 1998 | |||||||
Member of the Supervisory Board | of E.ON AG | |||||||||
Ulrich Hocker | 54 | General Manager of the German Investor | 1998 | |||||||
Member of the Supervisory Board | Protection Association | |||||||||
Supervisory Board Memberships/ Directorships: | ||||||||||
Feri Finance AG, Gildemeister AG, Karstadt Quelle AG, ThyssenKrupp Steel AG, Gartmore Capital Strategy Fonds(4), Phoenix Mecano AG(4) (Chairman) | ||||||||||
Eva Kirchhof(5) | 47 | Diploma-Physicist, Degussa AG | 2002 | |||||||
Member of the Supervisory Board | ||||||||||
Supervisory Board Memberships/ Directorships: | ||||||||||
Viterra Wohnungsgesellschaft III mbH(4) |
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Year First | ||||||||||
Name and Position Held | Age | Principal Occupation | Elected | |||||||
Seppel Kraus(5) | 51 | Secretary of Labor Union | 2003 | |||||||
Member of the Supervisory Board | ||||||||||
Supervisory Board Memberships/ Directorships: | ||||||||||
Wacker-Chemie GmbH, UPM-Kymmene Beteiligungs GmbH | ||||||||||
Prof. Dr. Ulrich Lehner | 58 | President and Chief Executive Officer, | 2003 | |||||||
Member of the Supervisory Board | Henkel KGaA | |||||||||
Supervisory Board Memberships/ Directorships: | ||||||||||
HSBC Trinkaus & Burkhardt KGaA, Ecolab Inc.(4), Novartis AG(4), Dial Corporation(4), Henkel of America(4), Henkel Corporation(4) | ||||||||||
Dr. Klaus Liesen | 73 | Honorary Chairman of the Supervisory | 1991 | |||||||
Member of the Supervisory Board | Board of E.ON Ruhrgas AG; formerly Chairman of the Supervisory Board of E.ON Ruhrgas AG | |||||||||
Supervisory Board Memberships/ Directorships: | ||||||||||
TUI AG, Volkswagen AG, Otto Wolff Industrieberatung und Beteiligungen GmbH(4) | ||||||||||
Peter Obramski(5) | 45 | Secretary of Labor Union | 2003 | |||||||
Member of the Supervisory Board | ||||||||||
Supervisory Board Memberships/ Directorships: | ||||||||||
E.ON Energie AG, E.ON Engineering GmbH, E.ON Kraftwerke GmbH, RAG Bahn und Hafen GmbH | ||||||||||
Ulrich Otte(5) | 55 | Chairman of the Central Works Council, | 2001 | |||||||
Member of the Supervisory Board | E.ON Energie AG | |||||||||
Supervisory Board Memberships/ Directorships: | ||||||||||
E.ON Energie AG, E.ON Kraftwerke GmbH | ||||||||||
Klaus-Dieter Raschke(1)(5) | 51 | Chairman of the Combined Works Council, | 2002 | |||||||
Member of the Supervisory Board | E.ON Energie AG | |||||||||
Supervisory Board Memberships/ Directorships: | ||||||||||
E.ON Energie AG, E.ON Kernkraft GmbH | ||||||||||
Dr. Henning Schulte-Noelle(2) | 62 | Chairman of the Supervisory Board of | 1993 | |||||||
Member of the Supervisory Board | Allianz AG; formerly Chairman of the Board of Management of Allianz AG | |||||||||
Supervisory Board Memberships/ Directorships: | ||||||||||
Siemens AG, ThyssenKrupp AG | ||||||||||
Prof. Dr. Wilhelm Simson | 66 | Retired Co-Chief Executive Officer of | 2003 | |||||||
Member of the Supervisory Board | E.ON AG; formerly Chairman of the Board of Management and Chief Executive Officer of VIAG AG | |||||||||
Supervisory Board Memberships/ Directorships: | ||||||||||
Bayerische Hypo- und Vereinsbank AG, Frankfurter Allgemeine Zeitung GmbH, Merck KGaA, Freudenberg & Co.(4), Jungbunzlauer Holding AG(4) |
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Year First | ||||||||||
Name and Position Held | Age | Principal Occupation | Elected | |||||||
Gerhard Skupke(5) | 55 | Chairman of the Central Works Council, | 2003 | |||||||
Member of the Supervisory Board | E.DIS Aktiengesellschaft | |||||||||
Supervisory Board Memberships/ Directorships: | ||||||||||
E.DIS Aktiengesellschaft | ||||||||||
Dr. Georg Freiherr von Waldenfels | 60 | Former Minister of Finance of the State | 2003 | |||||||
Member of the Supervisory Board | of Bavaria; Attorney | |||||||||
Supervisory Board Memberships/ Directorships: | ||||||||||
Deutscher Tennis Bund Holding GmbH (Chairman), Georgsmarienhütte Holding GmbH, GI Ventures AG |
* | Chairman of the respective Supervisory Board committee. |
(1) | Member of E.ON AG’s Audit Committee. For more information, see “Item 10. Additional Information — Memorandum and Articles of Association — Corporate Governance — The Supervisory Board Committees.” |
(2) | Member of E.ON AG’s Executive Committee, which covers the functions of a remuneration committee. For more information, see “Item 10. Additional Information — Memorandum and Articles of Association — Corporate Governance — The Supervisory Board Committees.” |
(3) | Member of E.ON AG’s Finance and Investment Committee. For more information, see “Item 10. Additional Information — Memorandum and Articles of Association — Corporate Governance — The Supervisory Board Committees.” |
(4) | Membership in comparable domestic or foreign supervisory body of a commercial enterprise. |
(5) | Elected by the employees. |
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Year First | Year Current | |||||||||||||
Name and Title | Age | Business Activities and Experience | Appointed | Term Expires | ||||||||||
Dr. Wulf-H. Bernotat Chairman of the Board of Management | 56 | Chief Executive Officer; Corporate Communications, Corporate and Public Affairs, Investor Relations, Supervisory Board Relations, Strategy, Executive Development, Audit; formerly Chairman of the Board of Management of Stinnes AG | 2003 | 2008 | ||||||||||
Supervisory Board Memberships/ Directorships: | ||||||||||||||
E.ON Energie AG(1) (Chairman), E.ON Ruhrgas AG(1) (Chairman), Allianz AG, Metro AG, RAG Aktiengesellschaft (Chairman), E.ON Nordic AB(2)(4) (Chairman), E.ON UK plc(2)(4) (Chairman), E.ON US Investments Corp.(2)(4) (Chairman), Sydkraft AB(2)(4) (Chairman) | ||||||||||||||
Dr. Burckhard Bergmann Member of the Board of Management | 61 | Upstream Business, Market Management, Group Regulatory Management; Chairman of the Board of Management and Chief Executive Officer of E.ON Ruhrgas AG | 2003 | 2005 | ||||||||||
Supervisory Board Memberships/Directorships: | ||||||||||||||
E.ON Ruhrgas International AG(1) (Chairman), Thüga AG(1) (Chairman), Allianz Lebensversicherungs-AG, MAN Ferrostaal AG, Jaeger Akustik GmbH & Co.(2) (Chairman), Mitteleuropäische Gasleitungsgesellschaft mbH (MEGAL)(2)(4) (Chairman), OAO Gazprom(2), E.ON Ruhrgas E & P GmbH(2)(4) (Chairman), Ruhrgas Industries GmbH(2)(4) (Chairman), Trans Europe Naturgas Pipeline GmbH(2)(4) (Chairman), E.ON Ruhrgas Transport Management GmbH(2)(4), E.ON UK plc(2)(4), ZAO Gerosgaz(2)(4) (Chairman; in alternation with a representative of the foreign partner) | ||||||||||||||
Dr. Hans Michael Gaul Member of the Board of Management | 62 | Controlling/ Corporate Planning, M&A, Legal Affairs; formerly Member of the Board of Management of VEBA AG | 1990 | 2006 | ||||||||||
Supervisory Board Memberships/Directorships: | ||||||||||||||
Degussa AG(1), E.ON Energie AG(1), E.ON Ruhrgas AG(1), Viterra AG(1) (Chairman), Allianz Versicherungs-AG, DKV AG, RAG Aktiengesellschaft, STEAG AG, Volkswagen AG, E.ON Nordic AB(2)(4), Sydkraft AB(2)(4) |
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Year First | Year Current | |||||||||||||
Name and Title | Age | Business Activities and Experience | Appointed | Term Expires | ||||||||||
Dr. Manfred Krüper Member of the Board of Management | 63 | Labor Relations, Personnel, Infrastructure and Services, Procurement, Organization; formerly Member of the Board of Management of VEBA AG | 1996 | 2005 | ||||||||||
Supervisory Board Memberships/ Directorships: | ||||||||||||||
E.ON Energie AG(1), Viterra AG(1), Degussa AG(1), equitrust Aktiengesellschaft (Chairman), RAG Aktiengesellschaft, RAG Immobilien AG, Victoria Versicherung AG, Victoria Lebensversicherung AG, E.ON US Investments Corp.(2)(4), E.ON North America, Inc.(2)(4) (Chairman) | ||||||||||||||
Dr. Erhard Schipporeit Member of the Board of Management | 55 | Chief Financial Officer; Finance, Accounting, Taxes, IT; formerly Member of the Board of Management of VIAG AG (appointed in 1997) | 2000 | 2009 | ||||||||||
Supervisory Board Memberships/ Directorships: | ||||||||||||||
E.ON Ruhrgas AG(1), Degussa AG(1), Commerzbank AG, Talanx AG, E.ON Audit Services GmbH(2)(4) (Chairman), E.ON Risk Consulting GmbH(2)(4) (Chairman), E.ON UK plc(2)(4), E.ON US Investments Corp.(2)(4), HDI V.a.G.(2) | ||||||||||||||
Dr. Johannes Teyssen(3) Member of the Board of Management | 45 | Downstream Business, Market Management, Group Regulatory Management; Chairman of the Board of Management and Chief Executive Officer of E.ON Energie AG | 2004 | 2008 | ||||||||||
Supervisory Board Memberships/Directorships: | ||||||||||||||
Avacon AG(1) (Chairman), E.ON Bayern AG(1) (Chairman), E.ON Hanse AG(1) (Chairman), E.ON Sales & Trading GmbH(1), Thüga AG(1), E.ON Nordic AB(2)(4), Sydkraft AB(2)(4) |
(1) | Group mandate. |
(2) | Membership in comparable domestic or foreign supervisory body of a commercial enterprise. |
(3) | Since January 1, 2004. |
(4) | Other Group mandate (membership in comparable domestic or foreign supervisory body of a commercial enterprise). |
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Fixed | Variable | Compensation for | |||||||||||||||
Compensation for | Compensation for | Supervisory Board | |||||||||||||||
Service on E.ON’s | Service on E.ON’s | Memberships at | |||||||||||||||
Name | Supervisory Board | Supervisory Board | Affiliated Companies | Total | |||||||||||||
(€) | |||||||||||||||||
Ulrich Hartmann | 30,000 | 323,925 | 0 | 353,925 | |||||||||||||
Hubertus Schmoldt | 20,000 | 215,950 | 0 | 235,950 | |||||||||||||
Günter Adam | 10,000 | 107,975 | 0 | 117,975 | |||||||||||||
Dr. Karl-Hermann Baumann | 20,000 | 215,950 | 0 | 235,950 | |||||||||||||
Ralf Blauth | 15,000 | 161,963 | 0 | 176,963 | |||||||||||||
Dr. Rolf-E. Breuer | 10,000 | 107,975 | 0 | 117,975 | |||||||||||||
Dr. Gerhard Cromme | 15,000 | 161,963 | 0 | 176,963 | |||||||||||||
Wolf Rüdiger Hinrichsen | 15,000 | 161,963 | 0 | 176,963 | |||||||||||||
Ulrich Hocker | 10,000 | 107,975 | 0 | 117,975 | |||||||||||||
Eva Kirchhof | 10,000 | 107,975 | 0 | 117,975 | |||||||||||||
Seppel Kraus | 10,000 | 107,975 | 0 | 117,975 | |||||||||||||
Prof. Dr. Ulrich Lehner | 10,000 | 107,975 | 0 | 117,975 | |||||||||||||
Dr. Klaus Liesen | 10,000 | 107,975 | 0 | 117,975 | |||||||||||||
Peter Obramski | 10,000 | 107,975 | 0 | 117,975 | |||||||||||||
Ulrich Otte | 10,000 | 107,975 | 66,700 | 184,675 | |||||||||||||
Klaus-Dieter Raschke | 15,000 | 161,963 | 44,778 | 221,741 | |||||||||||||
Dr. Henning Schulte-Noelle | 15,000 | 161,963 | 0 | 176,963 | |||||||||||||
Prof. Dr. Wilhelm Simson | 10,000 | 107,975 | 0 | 117,975 | |||||||||||||
Gerhard Skupke | 10,000 | 107,975 | 14,250 | 132,225 | |||||||||||||
Dr. Georg Freiherr von Waldenfels | 10,000 | 107,975 | 0 | 117,975 | |||||||||||||
Attendance fees and meeting-related reimbursements(1) | 97,838 | ||||||||||||||||
Total | 265,000 | 2,861,340 | 125,728 | 3,349,906 | |||||||||||||
(1) | Attendance fees and meeting-related reimbursements are given as an aggregate for all Supervisory Board members. |
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BOARD OF MANAGEMENT |
• | fixed annual compensation; | |
• | annual bonus, the amount of which is based on the achievement of company-based and personal performance targets; and | |
• | stock appreciation rights (“SARs”) |
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SARs | |||||||||||||||||||||
Fixed Annual | Annual | Gains from | Granted | ||||||||||||||||||
Name | Compensation | Bonus | exercising SARs(1) | Total | in 2004 | ||||||||||||||||
(€) | (€) | (€) | (€) | (No. of | |||||||||||||||||
SARs) | |||||||||||||||||||||
Dr. Wulf H. Bernotat | 1,025,000 | 2,100,000 | 0 | 3,125,000 | 95,339 | ||||||||||||||||
Dr. Burckhard Bergmann | 650,000 | 1,400,000 | 0 | 2,050,000 | 63,559 | ||||||||||||||||
Dr. Hans Michael Gaul | 650,000 | 1,400,000 | 109,935 | 2,159,935 | 63,559 | ||||||||||||||||
Dr. Manfred Krüper | 650,000 | 1,400,000 | 0 | 2,050,000 | 63,559 | ||||||||||||||||
Dr. Erhard Schipporeit | 650,000 | 1,400,000 | 107,800 | 2,157,800 | 63,559 | ||||||||||||||||
Dr. Johannes Teyssen | 530,000 | 1,100,000 | 100,200 | 1,730,200 | 52,966 | ||||||||||||||||
Other compensation(2) | 503,962 | ||||||||||||||||||||
Total | 4,155,000 | 8,800,000 | 317,935 | 13,776,897 | 402,541 | ||||||||||||||||
(1) | The amount paid to Board of Management members upon exercise of any SARs is the difference between the E.ON AG stock price at the time of exercise and the E.ON AG stock price at the time the SAR was issued, multiplied by the number of SARs exercised. |
(2) | Other compensation in the aggregate amount of approximately€0.5 million includes benefits in kind, certain compensation for duties performed at affiliated companies and amounts relating to the difference between the provisions for 2003 annual bonus compensation and the subsequent final determination of such compensation. |
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Employees at | Employees at | Employees at | |||||||||||||||||||||||||||||||||||
December 31, 2004 | December 31, 2003 | December 31, 2002 | |||||||||||||||||||||||||||||||||||
Total | Germany | Foreign | Total | Germany | Foreign | Total | Germany | Foreign | |||||||||||||||||||||||||||||
Central Europe | 36,811 | 29,208 | 7,603 | 36,576 | 28,611 | 7,965 | 35,062 | 29,604 | 5,458 | ||||||||||||||||||||||||||||
Pan-European Gas | 11,520 | 5,698 | 5,822 | 11,686 | 6,188 | 5,498 | 1,096 | 1,096 | — | ||||||||||||||||||||||||||||
U.K. | 10,397 | 6 | 10,391 | 6,541 | — | 6,541 | 7,439 | — | 7,439 | ||||||||||||||||||||||||||||
Nordic | 5,530 | 2 | 5,528 | 6,294 | — | 6,294 | 5,665 | — | 5,665 | ||||||||||||||||||||||||||||
U.S. Midwest | 3,437 | 1 | 3,436 | 3,521 | — | 3,521 | 3,578 | — | 3,578 | ||||||||||||||||||||||||||||
Corporate Center | 420 | 403 | 17 | 597 | 390 | 207 | 558 | 370 | 188 | ||||||||||||||||||||||||||||
Core Energy Business | 68,115 | 35,318 | 32,797 | 65,215 | 35,189 | 30,026 | 53,398 | 31,070 | 22,328 | ||||||||||||||||||||||||||||
Other Activities(1) | 1,595 | 1,573 | 22 | 1,887 | 1,861 | 26 | 47,938 | 28,643 | 19,295 | ||||||||||||||||||||||||||||
Total | 69,710 | 36,891 | 32,819 | 67,102 | 37,050 | 30,052 | 101,336 | 59,713 | 41,623 | ||||||||||||||||||||||||||||
(1) | Includes Viterra and, for year ended December 31, 2002, Degussa. |
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Price per ADS ($) | |||||||||
High | Low | ||||||||
2000 | 603/8 | 405/8 | |||||||
2001(1) | 60.50 | 42.03 | |||||||
2002 | 58.02 | 39.80 | |||||||
2003 | 65.44 | 38.52 | |||||||
First Quarter | 45.36 | 38.52 | |||||||
Second Quarter | 52.46 | 41.40 | |||||||
Third Quarter | 53.38 | 48.80 | |||||||
Fourth Quarter | 65.44 | 48.75 | |||||||
2004 | 91.15 | 61.72 | |||||||
First Quarter | 68.95 | 61.72 | |||||||
Second Quarter | 72.54 | 63.15 | |||||||
Third Quarter | 75.17 | 69.22 | |||||||
Fourth Quarter | 91.15 | 73.90 | |||||||
September | 73.97 | 70.57 | |||||||
October | 81.55 | 73.90 | |||||||
November | 86.26 | 81.74 | |||||||
December | 91.15 | 84.50 | |||||||
2005 | |||||||||
January | 90.01 | 85.85 | |||||||
February | 93.02 | 89.15 |
(1) | On January 29, 2001, the NYSE started trading all listed issues in decimals instead of fractions. |
• | Quarterly reporting; | |
• | Application of international accounting standards (either IAS or U.S. GAAP); |
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• | Publication of a financial calendar listing the most important corporate events; | |
• | At least one analysts’ conference per year; and | |
• | Provision of English language versions of all current reports and ad-hoc disclosures required under the German Securities Trading Act(Wertpapierhandelsgesetz,or “Securities Trading Act”). |
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Price Per | |||||||||||||||||
Ordinary Share | DAX 30 Index(1) | ||||||||||||||||
High | Low | High | Low | ||||||||||||||
(€) | (€ in thousands) | ||||||||||||||||
2000 | 66.55 | 41.01 | 8,064.97 | 6,200.71 | |||||||||||||
2001 | 64.50 | 64.91 | 6,795.14 | 3,787.23 | |||||||||||||
2002 | 59.97 | 38.16 | 5,462.55 | 2,597.88 | |||||||||||||
2003 | 51.74 | 34.67 | 3,965.16 | 2,202.96 | |||||||||||||
First Quarter | 42.90 | 34.67 | 3,157.25 | 2,202.96 | |||||||||||||
Second Quarter | 44.77 | 38.01 | 3,304.15 | 2,450.19 | |||||||||||||
Third Quarter | 47.72 | 41.90 | 3,668.67 | 3,146.55 | |||||||||||||
Fourth Quarter | 51.74 | 41.67 | 3,965.16 | 3,276.64 | |||||||||||||
2004 | 67.06 | 49.27 | 4,261.79 | 3,646.99 | |||||||||||||
First Quarter | 56.16 | 49.27 | 4,151.83 | 3,726.07 | |||||||||||||
Second Quarter | 59.63 | 53.45 | 4,134.10 | 3,754.37 | |||||||||||||
Third Quarter | 60.83 | 56.85 | 4,035.02 | 3,646.99 | |||||||||||||
Fourth Quarter | 67.06 | 60.05 | 4,261.79 | 3,854.41 | |||||||||||||
September | 59.67 | 57.80 | 3,991.02 | 3,817.62 | |||||||||||||
October | 63.78 | 60.05 | 4,049.66 | 3,854.41 | |||||||||||||
November | 65.12 | 63.11 | 4,183.41 | 4,012.64 | |||||||||||||
December | 67.06 | 63.19 | 4,261.79 | 4,150.41 | |||||||||||||
2005 | |||||||||||||||||
January | 68.72 | 65.82 | 4,316.40 | 4,201.81 | |||||||||||||
February | 71.70 | 67.27 | 4,402.03 | 4,279.97 |
(1) | The DAX 30 Index is a continuously updated, capital-weighted performance index of 30 German blue chip companies. E.ON represented approximately 9.99 percent of the DAX 30 Index as of March 7, 2005. In principle, the shares included in the DAX 30 Index were selected on the basis of their stock exchange turnover and their market capitalization. Adjustments of the DAX 30 Index are made for capital changes, subscription rights and dividends. |
Item 10. | Additional Information. |
Organization, Register and Entry Number |
Objects and Purposes |
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Corporate Governance |
• | The annual general meeting of shareholders ratifies the actions of the corporation’s supervisory board and board of management. It decides, among other things, on the amount of the annual dividend, the appointment of an independent auditor and certain significant corporate transactions. In corporations with more than 2,000 employees, shareholders and employees elect or appoint an equal number of representatives to the supervisory board. The annual general meeting must be held within the first eight months of each fiscal year. | |
• | The supervisory board appoints and removes the members of the board of management and oversees the management of the corporation. Although prior approval of the supervisory board may be required in connection with certain significant matters, the law prohibits the supervisory board from making management decisions. | |
• | The board of management manages the corporation’s business and represents it in dealings with third parties. The board of management submits regular reports to the supervisory board about the corporation’s operations and business strategies, and prepares special reports upon request. A person may not serve on the board of management and the supervisory board of a corporation at the same time. |
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• | In addition to E.ON’s general Code of Conduct for all employees, the Company has developed a special Code of Ethics for members of the Board of Management and senior financial officers and published the |
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text on its corporate website at www.eon.com. Material appearing on the website is not incorporated by reference in this annual report. This code obliges these managers to make full, appropriate, accurate, timely and understandable disclosure of information both in the documents E.ON submits to the SEC and in its other corporate publications. | ||
• | In accordance with an SEC recommendation, E.ON has established a Disclosure Committee that is responsible for ensuring that effective procedures and control mechanisms for financial reporting are in place and for providing a correct and timely presentation of information to the financial markets. The committee is comprised of seven members from various sectors of E.ON AG who have a good overview of the Group and the processing of information relating to the quarterly reports and annual financial statements. |
Certain Provisions with Respect to Board Members |
Ordinary Shares |
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• | amending the articles of association to alter the objects and purposes of the company; | |
• | increasing or reducing the share capital; | |
• | excluding preemptive rights of shareholders to subscribe for new shares; | |
• | dissolving the corporation; | |
• | merging the corporation into, or consolidating the corporation with, another company; | |
• | transferring all or virtually all of the corporation’s assets; and | |
• | changing corporate form. |
Changes in Rights of Shareholders |
Shareholders’ Meetings |
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• | election of members of the Supervisory Board (other than those elected by the employees); | |
• | amendment of the Articles of Association; | |
• | measures to increase or reduce share capital; | |
• | mergers and similar transactions; and | |
• | resolutions regarding the dissolution of the Company. |
• | deposit their shares or certificates of deposit for their shares with a notary, collective security-deposit bank, or other agency specified in the notice of the shareholders’ meeting; | |
• | make the deposit no later than the end of the day on the seventh day prior to the scheduled meeting date; and | |
• | leave the shares or certificates of deposit with the depositary until the completion of the shareholders’ meeting. |
Transparency and Corporate Reporting |
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• | Quarterly reports; | |
• | Annual reports prepared in accordance with German law (in both German and English); | |
• | The Annual Report on Form 20-F; | |
• | A press conference at the time of release of the German annual report; and | |
• | Telephone conferences for analysts following the release of quarterly or annual results, as well as other investor relations presentations. |
Foreign Share Ownership |
Change of Control Provisions |
Disclosure of Shareholdings |
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Changes in Capital |
• | To increase the Company’s capital stock by a maximum of€180,000,000 through the one-time or repeated issuance of new Ordinary Shares in return for cash contributions until May 25, 2005. E.ON shareholders have pre-emptive rights with respect to the issuance of these authorized shares, though their rights may be excluded by the Board of Management, subject to approval by the Supervisory Board, under certain circumstances set forth in the Articles of Association. | |
• | To increase the Company’s capital stock by a maximum of€150,392,201 through the one-time or repeated issuance of new Ordinary Shares in return for contributions in kind until May 25, 2005. Subject to approval by the Supervisory Board, E.ON shareholders have no pre-emptive rights with respect to these authorized shares. | |
• | To increase the Company’s capital stock by a maximum of€180,000,000 through the one-time or repeated issuance of new Ordinary Shares in return for cash contributions until May 25, 2005. E.ON shareholders generally have pre-emptive rights with respect to the issuance of these authorized shares, though their rights may be excluded by the Board of Management, subject to approval by the Supervisory Board, under certain circumstances set forth in the Articles of Association. |
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Risk Identification and Analysis |
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Foreign Exchange and Interest Rate Risk Management Principles |
Foreign Exchange Rate Risk Management |
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Total Volume of Foreign Currency Derivatives as of December 31, 2004 and December 31, 2003 |
December 31, 2004 | December 31, 2003 | |||||||||||||||||||||||||||||||||
Nominal | Fair | Value- | Stress | Nominal | Fair | Value- | Stress | |||||||||||||||||||||||||||
Value | Value | at-Risk | Test | Value | Value | at-Risk | Test | |||||||||||||||||||||||||||
(€ in millions) | ||||||||||||||||||||||||||||||||||
FX forward transactions | ||||||||||||||||||||||||||||||||||
Buy | 4,238.2 | (41.3 | ) | 11.0 | 33.0 | 2,149.5 | (142.5 | ) | 12.8 | 38.4 | ||||||||||||||||||||||||
Sell | 5,328.6 | 134.2 | 11.8 | 35.4 | 4,789.8 | 174.6 | 17.3 | 51.9 | ||||||||||||||||||||||||||
FX currency options | ||||||||||||||||||||||||||||||||||
Buy | 782.7 | 46.7 | 1.3 | 3.9 | 425.4 | 14.6 | 0.0 | 0.0 | ||||||||||||||||||||||||||
Sell | 422.2 | (36.4 | ) | 0.4 | 1.2 | 17.5 | 0.0 | 0.0 | 0.0 | |||||||||||||||||||||||||
Subtotal | 10,771.7 | 103.2 | 3.1 | 9.3 | 7,382.2 | 46.7 | 7.5 | 22.5 | ||||||||||||||||||||||||||
(Remaining maturities) | ||||||||||||||||||||||||||||||||||
Cross currency swaps | ||||||||||||||||||||||||||||||||||
up to 1 year | 499.1 | (7.0 | ) | 2.3 | 6.9 | 376.1 | (25.1 | ) | 2.3 | 6.9 | ||||||||||||||||||||||||
1 year to 5 years | 11,033.7 | 484.2 | 33.4 | 100.2 | 3,464.8 | 251.1 | 27.3 | 81.9 | ||||||||||||||||||||||||||
more than 5 years | 7,163.8 | 236.3 | 12.0 | 36.0 | 7,304.6 | 188.9 | 39.9 | 119.7 | ||||||||||||||||||||||||||
Interest rate/cross currency swaps | ||||||||||||||||||||||||||||||||||
up to 1 year | 102.3 | 1.4 | 0.5 | 1.5 | 51.1 | (0.7 | ) | 0.3 | 0.9 | |||||||||||||||||||||||||
1 year to 5 years | 125.0 | 12.1 | 0.5 | 1.5 | 227.3 | 17.4 | 1.4 | 4.2 | ||||||||||||||||||||||||||
more than 5 years | 297.4 | (38.5 | ) | 2.5 | 7.5 | 297.4 | (3.2 | ) | 5.0 | 15.0 | ||||||||||||||||||||||||
Subtotal | 19,221.3 | 688.5 | 44.9 | 134.7 | 11,721.3 | 428.4 | 60.1 | 180.3 | ||||||||||||||||||||||||||
Total | 29,993.0 | 791.7 | 44.6 | 133.8 | 19,103.5 | 475.1 | 66.5 | 199.5 | ||||||||||||||||||||||||||
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Interest Rate Risk Management |
Total Volume of Interest Rate Derivatives as of December 31, 2004 and December 31, 2003 |
December 31, 2004 | December 31, 2003 | ||||||||||||||||||||||||||||||||||
Nominal | Fair | Value- | Stress | Nominal | Fair | Value- | Stress | ||||||||||||||||||||||||||||
Value | Value | at-Risk | Test | Value | Value | at-Risk | Test | ||||||||||||||||||||||||||||
(€ in millions) | |||||||||||||||||||||||||||||||||||
(Remaining maturities) | |||||||||||||||||||||||||||||||||||
Interest rate swaps fixed-rate payer | |||||||||||||||||||||||||||||||||||
up to 1 year | 371.0 | (5.4 | ) | 0.1 | 0.3 | 315.1 | (2.6 | ) | 0.7 | 2.1 | |||||||||||||||||||||||||
1 year to 5 years | 2,092.5 | (107.9 | ) | 3.1 | 9.3 | 1,567.5 | (49.8 | ) | 10.8 | 32.4 | |||||||||||||||||||||||||
more than 5 years | 373.3 | (36.6 | ) | 0.8 | 2.4 | 1,283.9 | (64.4 | ) | 11.8 | 35.4 | |||||||||||||||||||||||||
fixed-rate receiver | |||||||||||||||||||||||||||||||||||
up to 1 year | 23.3 | 0.3 | 0.0 | 0.0 | 47.6 | 0.4 | 0.3 | 0.9 | |||||||||||||||||||||||||||
1 year to 5 years | 3,914.0 | 100.6 | 10.4 | 31.2 | 99.7 | 8.9 | 0.7 | 2.1 | |||||||||||||||||||||||||||
more than 5 years | 147.0 | 4.5 | 0.5 | 1.5 | 1,450.1 | 83.7 | 12.5 | 37.5 | |||||||||||||||||||||||||||
Subtotal | 6,921.1 | (44.5 | ) | 6.7 | 20.1 | 4,763.9 | (23.8 | ) | 11.6 | 34.8 | |||||||||||||||||||||||||
Interest rate options Buy up to 1 year | 554.6 | (7.2 | ) | 0.1 | 0.3 | — | — | — | |||||||||||||||||||||||||||
1 year to 5 years | — | — | — | — | 220.3 | 0.1 | 0.2 | 0.6 | |||||||||||||||||||||||||||
more than 5 years | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Sell up to 1 year | 110.9 | (2.0 | ) | 0.0 | 0.0 | — | — | — | |||||||||||||||||||||||||||
1 year to 5 years | — | — | — | — | 220.3 | (4.0 | ) | 2.4 | 7.3 | ||||||||||||||||||||||||||
more than 5 years | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Subtotal | 665.5 | (9.2 | ) | 0.2 | 0.6 | 440.6 | (3.9 | ) | 2.6 | 7.8 | |||||||||||||||||||||||||
Total | 7,586.6 | (53.7 | ) | 6.7 | 20.1 | 5,204.5 | (27.7 | ) | 14.2 | 42.6 | |||||||||||||||||||||||||
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Commodity Price Risk Management |
Counterparty Risk From the Use of Derivative Financial Instruments |
205
Table of Contents
Item 12. | Description of Securities other than Equity Securities. |
Item 13. | Defaults, Dividend Arrearages and Delinquencies. |
Item 14. | Material Modifications to the Rights of Security Holders and Use of Proceeds. |
Item 15. | Controls and Procedures. |
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Item 16A. | Audit Committee Financial Expert. |
Item 16B. | Code of Ethics. |
Item 16C. | Principal Accountant Fees and Services. |
Year ended | Year ended | |||||||
Type of Fees | December 31, 2004 | December 31, 2003 | ||||||
(€ in millions) | ||||||||
Audit Fees | 41.4 | 31.3 | ||||||
Audit-Related Fees | 11.4 | 4.8 | ||||||
Tax Fees | 1.7 | 1.8 | ||||||
All Other Fees | 4.8 | 1.6 | ||||||
Total | 59.3 | 39.5 | ||||||
Audit Committee Pre-Approval Policies |
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Audit Services |
• | Annual audit for E.ON’s Consolidated Financial Statements; | |
• | Quarterly review of E.ON’s interim financial statements; | |
• | Statutory audits of financial statements of E.ON AG and of its subsidiaries under the rules of their respective countries; | |
• | Attestation of internal controls as part of the external audit; and | |
• | Attestation of regulatory filing and other compliance requirements, including regulatory advice, such as carve-out reports and comfort letters. |
Audit-Related Services |
• | Accounting advice relating to transactions or events; | |
• | Due diligence relating to acquisitions, dispositions and contemplated transactions; | |
• | Consultation in accounting and corporate reporting matters; | |
• | Attestation of compliance with provisions or calculations required by agreements; | |
• | Employee benefit plan audits; | |
• | Agreed-upon procedures engagements; and | |
• | Advisory services relating to internal controls and systems documentation. |
Tax Services |
• | Tax compliance services, including return preparation and tax payment planning; | |
• | Tax advice relating to transactions or events; | |
• | Expatriate employee tax services; | |
• | Transfer pricing studies; and | |
• | Tax services for employee benefit plans. |
All Other Services |
• | Advisory services on corporate governance and risk management; | |
• | Advisory services on corporate treasury processes and systems; | |
• | Advisory services on information systems; and | |
• | Educational and training services on accounting and industry matters. |
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Item 16E. | Purchases of Equity Securities by the Issuer and Affiliated Purchasers. |
Total Number of | Maximum Number of | |||||||||||||||
Shares Purchased as | Shares that may yet | |||||||||||||||
Total Number of | Average Price Paid | Part of the Share | be Purchased under the | |||||||||||||
Shares Purchased | per Share in€ | Buyback Plan | Share Buyback Plan | |||||||||||||
2004 | (a) | (b) | (c) | (d) | ||||||||||||
Jan. 1-31 | — | — | — | 33,226,401 | ||||||||||||
Feb. 1-29 | — | — | — | 33,226,401 | ||||||||||||
Mar. 1-31 | — | — | — | 33,226,401 | ||||||||||||
Apr. 1-30 | — | — | — | 33,226,401 | ||||||||||||
May 1-31 | — | — | — | 33,226,424 | ||||||||||||
Jun. 1-30 | — | — | — | 33,253,416 | ||||||||||||
Jul. 1-31 | — | — | — | 36,350,721 | ||||||||||||
Aug. 1-31 | 200,000 | 57.73 | — | 36,153,049 | ||||||||||||
Sep. 1-30 | — | — | — | 36,153,062 | ||||||||||||
Oct. 1-31 | — | — | — | 36,153,075 | ||||||||||||
Nov. 1-30 | 12,135 | 64.08 | — | 36,353,096 | ||||||||||||
Dec. 1-31 | — | — | — | 36,353,403 | ||||||||||||
Total | 212,135 | 58.08 | — | |||||||||||||
(a) | 211,815 Ordinary Shares were purchased for the Company’s employee share purchase programs and 320 Ordinary Shares were purchased in order to meet conversion claims of former Gelsenberg AG shareholders. Gelsenberg AG was merged into the former VEBA AG in 1978; its shareholders had the option to receive VEBA shares or cash against delivery of their Gelsenberg shares. In November 2004, some former Gelsenberg AG shareholders presented Gelsenberg shares requesting an aggregate of 320 E.ON shares. All of these purchases were made in the market. |
(c)(d) | Pursuant to shareholder resolutions approved at the annual general meeting of shareholders held on April 28, 2004, the Board of Management is authorized to buy back up to 10 percent of E.ON AG’s outstanding share capital, or 692,000,000 Ordinary Shares, through October 28, 2005. Pursuant to the German Stock Corporation Act, the maximum number of shares the Company may purchase at any time equals 10 percent of 692,000,000 (or 69,200,000 Ordinary Shares) less the number of Ordinary Shares held in treasury stock at such time. Therefore, the maximum number of Ordinary Shares that may be purchased under the Company’s share buyback plan, as reflected in column D, fluctuated over the course of 2004 due to changes in the number of Ordinary Shares held in treasury stock, rather than due to share repurchases. The Company did not buy back any Ordinary Shares pursuant to this share buyback plan in 2004, as the shares purchased for the employee share purchase programs and the Gelsenberg conversion claims were not purchased pursuant to such plan. |
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Item 17. | Financial Statements. |
Item 18. | Financial Statements. |
Item 19. | Exhibits. |
Exhibit No. | Exhibit Title | |||
1.1 | English translation of the Articles of Association (Satzung) of E.ON AG as amended to date.* | |||
4.1 | Unofficial English translation of Framework Agreement between RAG AG, RAG Beteiligungs-GmbH, RAG Projektgesellschaft mbH and EBV Aktiengesellschaft, and E.ON AG, Chemie Verwaltungs AG and E.ON Vermögensanlage GmbH, dated May 20, 2002.** | |||
4.2 | Amended and Restated Fiscal Agency Agreement between E.ON AG, E.ON International Finance B.V., E.ON UK PLC, and Citibank, N.A. as Fiscal Agent, and Banque du Luxembourg S.A. and Citibank AG as Paying Agents, relating to the Euro 20,000,000,000 Medium Term Note Programme, dated August 21, 2002.** | |||
8.1 | Subsidiaries as of the end of the year covered by this annual report: see “Item 4. Information on the Company — Organizational Structure.” | |||
10.1 | Unofficial English translation of Current Form of Management Board Service Agreement.* | |||
10.2 | Schedule 1 to Exhibit 10.1 — Individual Deviations from Form of Management Board Service Agreement.* | |||
12.1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* | |||
12.2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* | |||
13.1 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.* |
* | Filed herewith. |
** | Incorporated by reference to the Form 20-F filed by E.ON AG with the Securities and Exchange Commission on March 19, 2003, file number 1-14688. |
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Report of Independent Accountants | F-1 | ||||
Consolidated Financial Statements: | |||||
Consolidated Statements of Income for the years ended December 31, 2004, 2003 and 2002 | F-2 | ||||
Consolidated Balance Sheets at December 31, 2004 and 2003 | F-3 | ||||
Consolidated Statements of Cash Flows for the years ended December 31, 2004, 2003 and 2002 | F-4 | ||||
Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2004, 2003 and 2002 | F-5 | ||||
Notes to the Consolidated Financial Statements | F-6 |
F-i
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Table of Contents
Düsseldorf March 7, 2005 | PwC Deutsche Revision Aktiengesellschaft Wirtschaftsprüfungsgesellschaft | |||
/s/ Brebeck | /s/ Laue | |||
Brebeck Wirtschaftsprüfer (German Public Auditor) | Laue Wirtschaftsprüfer (German Public Auditor) |
F-1
Table of Contents
Year Ended December 31, | |||||||||||||||||||||
Note | 2004* | 2004 | 2003 | 2002 | |||||||||||||||||
Public utility sales | $ | 46,709 | € | 34,502 | € | 31,971 | € | 23,333 | |||||||||||||
Gas sales | 17,903 | 13,224 | 11,917 | 567 | |||||||||||||||||
Product sales | 1,627 | 1,202 | 2,050 | 11,765 | |||||||||||||||||
Other sales | 237 | 175 | 489 | 959 | |||||||||||||||||
Sales | (31) | 66,476 | 49,103 | 46,427 | 36,624 | ||||||||||||||||
Electricity and petroleum tax | (5,900 | ) | (4,358 | ) | (3,886 | ) | (933 | ) | |||||||||||||
Sales, net of electricity and petroleum tax | 60,576 | 44,745 | 42,541 | 35,691 | |||||||||||||||||
Cost of goods sold — Public utility | (31,709 | ) | (23,422 | ) | (22,893 | ) | (17,039 | ) | |||||||||||||
Cost of goods sold — Gas | (12,203 | ) | (9,014 | ) | (8,055 | ) | (375 | ) | |||||||||||||
Cost of goods sold — Product | (1,209 | ) | (893 | ) | (1,499 | ) | (8,258 | ) | |||||||||||||
Cost of goods sold and services provided — Other | (33 | ) | (24 | ) | (333 | ) | (862 | ) | |||||||||||||
Cost of goods sold and services provided | (45,154 | ) | (33,353 | ) | (32,780 | ) | (26,534 | ) | |||||||||||||
Gross profit on sales | 15,422 | 11,392 | 9,761 | 9,157 | |||||||||||||||||
Selling expenses | (5,939 | ) | (4,387 | ) | (4,556 | ) | (4,839 | ) | |||||||||||||
General and administrative expenses | (2,042 | ) | (1,508 | ) | (1,399 | ) | (1,649 | ) | |||||||||||||
Other operating income (expenses), net | (5) | 2,349 | 1,735 | 2,091 | 236 | ||||||||||||||||
Financial earnings | (6) | (586 | ) | (433 | ) | (359 | ) | (1,273 | ) | ||||||||||||
Goodwill impairment | (11a) | — | — | — | (2,391 | ) | |||||||||||||||
Income/(Loss) from continuing operations before income taxes and minority interests | 9,204 | 6,799 | 5,538 | (759 | ) | ||||||||||||||||
Income taxes | (7) | (2,636 | ) | (1,947 | ) | (1,124 | ) | 662 | |||||||||||||
Income/(Loss) from continuing operations after income taxes | (6,568 | ) | 4,852 | 4,414 | (97 | ) | |||||||||||||||
Minority interests | (8) | (682 | ) | (504 | ) | (464 | ) | (623 | ) | ||||||||||||
Income/(Loss) from continuing operations | 5,886 | 4,348 | 3,950 | (720 | ) | ||||||||||||||||
Income/(Loss) from discontinued operations: | |||||||||||||||||||||
Income/(Loss) from operations (less applicable income taxes of€0,€52 and€255, respectively) | (4) | (12 | ) | (9 | ) | 1,137 | 3,306 | ||||||||||||||
Income before cumulative effect of changes in accounting principles | 5,874 | 4,339 | 5,087 | 2,586 | |||||||||||||||||
Cumulative effect of changes in accounting principles, (less applicable income taxes of€0,€(261) and€0, respectively) | — | — | (440 | ) | 191 | ||||||||||||||||
Net income | 5,874 | 4,339 | 4,647 | 2,777 | |||||||||||||||||
Basic earnings per share: | (10) | ||||||||||||||||||||
Income/(Loss) from continuing operations | 8.96 | 6.62 | 6.04 | (1.10 | ) | ||||||||||||||||
Income/(Loss) from discontinued operations, net | (0.01 | ) | (0.01 | ) | 1.74 | 5.07 | |||||||||||||||
Cumulative effect of changes in accounting principles, net | — | — | (0.67 | ) | 0.29 | ||||||||||||||||
Net income | 8.95 | 6.61 | 7.11 | 4.26 | |||||||||||||||||
Diluted earnings per share: | (10) | ||||||||||||||||||||
Income/(Loss) from continuing operations | 8.96 | 6.62 | 6.04 | (1.10 | ) | ||||||||||||||||
Income/(Loss) from discontinued operations, net | (0.01 | ) | (0.01 | ) | 1.74 | 5.07 | |||||||||||||||
Cumulative effect of changes in accounting principles, net | — | — | (0.67 | ) | 0.29 | ||||||||||||||||
Net income | 8.95 | 6.61 | 7.11 | 4.26 | |||||||||||||||||
* | Note 1 |
F-2
Table of Contents
December 31, | ||||||||||||||||
Note | 2004* | 2004 | 2003 | |||||||||||||
ASSETS | ||||||||||||||||
Goodwill | $ | 19,568 | € | 14,454 | € | 13,955 | ||||||||||
Intangible assets | (11a) | 5,128 | 3,788 | 4,153 | ||||||||||||
Property, plant and equipment | (11b) | 58,975 | 43,563 | 42,797 | ||||||||||||
Financial assets | (11c) | 23,371 | 17,263 | 17,725 | ||||||||||||
Fixed assets | 107,042 | 79,068 | 78,630 | |||||||||||||
Inventories | (12) | 3,584 | 2,647 | 2,477 | ||||||||||||
Financial receivables and other financial assets | (13) | 2,875 | 2,124 | 2,192 | ||||||||||||
Operating receivables and other operating assets | (13) | 21,334 | 15,759 | 15,833 | ||||||||||||
Assets of disposal groups | (4) | 749 | 553 | — | ||||||||||||
Investments in short-term securities | (14) | 10,614 | 7,840 | 7,474 | ||||||||||||
Cash and cash equivalents | (15) | 5,653 | 4,176 | 3,321 | ||||||||||||
Non-fixed assets | 44,809 | 33,099 | 31,297 | |||||||||||||
Deferred tax assets | (7) | 2,100 | 1,551 | 1,525 | ||||||||||||
Prepaid expenses | (16) | 466 | 344 | 398 | ||||||||||||
Total assets(thereof short-term 2004:€25,839; 2003:€24,883) | 154,417 | 114,062 | 111,850 | |||||||||||||
December 31, | ||||||||||||||||
Note | 2004* | 2004 | 2003 | |||||||||||||
STOCKHOLDERS’ EQUITY AND LIABILITIES | ||||||||||||||||
Capital stock | (17) | $ | 2,436 | € | 1,799 | € | 1,799 | |||||||||
Additional paid-in capital | (18) | 15,902 | 11,746 | 11,564 | ||||||||||||
Retained earnings | (19) | 27,080 | 20,003 | 16,976 | ||||||||||||
Accumulated other comprehensive income | (20) | 363 | 268 | (309 | ) | |||||||||||
Treasury stock | (347 | ) | (256 | ) | (256 | ) | ||||||||||
Stockholders’ equity | 45,434 | 33,560 | 29,774 | |||||||||||||
Minority interests | (21) | 5,610 | 4,144 | 4,625 | ||||||||||||
Provisions for pensions | (22) | 11,628 | 8,589 | 7,442 | ||||||||||||
Other provisions | (23) | 34,729 | 25,653 | 26,886 | ||||||||||||
Accrued liabilities | 46,357 | 34,242 | 34,328 | |||||||||||||
Financial liabilities | (24) | 27,484 | 20,301 | 21,787 | ||||||||||||
Operating liabilities | (24) | 19,026 | 14,054 | 13,903 | ||||||||||||
Liabilities | 46,510 | 34,355 | 35,690 | |||||||||||||
Liabilities of disposal groups | (4) | 73 | 54 | — | ||||||||||||
Deferred tax liabilities | (7) | 8,942 | 6,605 | 6,265 | ||||||||||||
Deferred income | (16) | 1,491 | 1,102 | 1,168 | ||||||||||||
Total liabilities (thereof short-term 2004:€23,734; 2003:€23,999) | 108,984 | 80,502 | 82,076 | |||||||||||||
Total stockholders’ equity and liabilities | 154,417 | 114,062 | 111,850 | |||||||||||||
* | Note 1 |
F-3
Table of Contents
Year Ended December 31, | ||||||||||||||||||
2004* | 2004 | 2003 | 2002 | |||||||||||||||
Net income | $ | 5,874 | € | 4,339 | € | 4,647 | € | 2,777 | ||||||||||
Income applicable to minority interests | 682 | 504 | 464 | 623 | ||||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||||
Income from discontinued operations | 12 | 9 | (1,137 | ) | (3,306 | ) | ||||||||||||
Depreciation, amortization, impairment | 4,408 | 3,256 | 3,272 | 6,767 | ||||||||||||||
Changes in provisions | (652 | ) | (482 | ) | 1,586 | (1,297 | ) | |||||||||||
Changes in deferred taxes | 27 | 20 | (132 | ) | (1,515 | ) | ||||||||||||
Other non-cash income and expenses | (9 | ) | (7 | ) | (156 | ) | 274 | |||||||||||
(Gain)/ Loss on disposal: | ||||||||||||||||||
Equity investments | (551 | ) | (407 | ) | (1,289 | ) | (491 | ) | ||||||||||
Other financial assets | (47 | ) | (35 | ) | — | (150 | ) | |||||||||||
Intangible and fixed assets | (620 | ) | (458 | ) | (526 | ) | (360 | ) | ||||||||||
Changes in non-fixed assets and other operating liabilities: | ||||||||||||||||||
Inventories | (280 | ) | (207 | ) | 299 | 252 | ||||||||||||
Trade receivables | (305 | ) | (225 | ) | 172 | (678 | ) | |||||||||||
Other operating receivables | (72 | ) | (53 | ) | 411 | (829 | ) | |||||||||||
Trade payables | (125 | ) | (92 | ) | (598 | ) | 546 | |||||||||||
Other operating liabilities | (257 | ) | (190 | ) | (1,475 | ) | 1,001 | |||||||||||
Cash provided by operating activities | 8,085 | 5,972 | 5,538 | 3,614 | ||||||||||||||
Proceeds from disposal of: | ||||||||||||||||||
Equity investments | 2,209 | 1,632 | 5,290 | 8,351 | ||||||||||||||
Other financial assets | 976 | 721 | 992 | 1,813 | ||||||||||||||
Intangible and fixed assets | 1,495 | 1,104 | 753 | 767 | ||||||||||||||
Purchase of: | ||||||||||||||||||
Equity investments | (3,083 | ) | (2,277 | ) | (6,296 | ) | (20,335 | ) | ||||||||||
Other financial assets | (401 | ) | (296 | ) | (240 | ) | (614 | ) | ||||||||||
Intangible and fixed assets | (3,671 | ) | (2,712 | ) | (2,660 | ) | (3,210 | ) | ||||||||||
Changes in securities (other than trading) (> 3 months) | (521 | ) | (385 | ) | 428 | 1,345 | ||||||||||||
Changes in financial receivables | 2,189 | 1,617 | 1,772 | 1,474 | ||||||||||||||
Cash provided by (used for) investing activities | (807 | ) | (596 | ) | 39 | (10,409 | ) | |||||||||||
Payments received/made from changes in capital including minority interests | (24 | ) | (18 | ) | — | 17 | ||||||||||||
Payments for treasury stock, net | — | — | 7 | 15 | ||||||||||||||
Payment of cash dividends to: | ||||||||||||||||||
Stockholders of E.ON AG | (1,776 | ) | (1,312 | ) | (1,142 | ) | (1,100 | ) | ||||||||||
Minority stockholders | (387 | ) | (286 | ) | (479 | ) | (418 | ) | ||||||||||
Payments for financial liabilities | 5,322 | 3,931 | 2,564 | 12,432 | ||||||||||||||
Repayments of financial liabilities | (9,174 | ) | (6,776 | ) | (4,495 | ) | (6,447 | ) | ||||||||||
Cash provided by (used for) financing activities | (6,039 | ) | (4,461 | ) | (3,545 | ) | 4,499 | |||||||||||
Net increase (decrease) in cash and cash equivalents maturing | 1,239 | 915 | 2,032 | (2,296 | ) | |||||||||||||
Effect of foreign exchange rates on cash and cash equivalents | (82 | ) | (60 | ) | (43 | ) | (232 | ) | ||||||||||
Cash and cash equivalents at the beginning of the period | 4,496 | 3,321 | 1,342 | 4,239 | ||||||||||||||
Cash and cash equivalents from discontinued operations at the beginning of the period | — | — | (10 | ) | (379 | ) | ||||||||||||
Cash and cash equivalents from continued operations at end of the period | 5,653 | 4,176 | 3,321 | 1,332 | ||||||||||||||
Cash and cash equivalents from discontinued operations at the end of the period | — | — | — | 10 | ||||||||||||||
Cash and cash equivalents | 5,653 | 4,176 | 3,321 | 1,342 | ||||||||||||||
* | Note 1 |
F-4
Table of Contents
Accumulated other comprehensive income | ||||||||||||||||||||||||||||||||||||
Additional | Currency | Available | Minimum | |||||||||||||||||||||||||||||||||
Capital | paid-in | Retained | translation | for sale | pension | Cash flow | Treasury | |||||||||||||||||||||||||||||
stock | capital | earnings | adjustments | securities | liability | hedges | stock | Total | ||||||||||||||||||||||||||||
January 1, 2002 | 1,799 | 11,402 | 11,795 | 376 | (265 | ) | (320 | ) | (51 | ) | (274 | ) | 24,462 | |||||||||||||||||||||||
Shares reacquired/sold | 15 | 15 | ||||||||||||||||||||||||||||||||||
Dividends paid | (1,100 | ) | (1,100 | ) | ||||||||||||||||||||||||||||||||
Net income | 2,777 | 2,777 | ||||||||||||||||||||||||||||||||||
Other comprehensive income | (618 | ) | 262 | (81 | ) | (64 | ) | (501 | ) | |||||||||||||||||||||||||||
Total comprehensive income | 2,276 | |||||||||||||||||||||||||||||||||||
December 31, 2002 | 1,799 | 11,402 | 13,472 | (242 | ) | (3 | ) | (401 | ) | (115 | ) | (259 | ) | 25,653 | ||||||||||||||||||||||
Shares reacquired/sold | 162 | (1 | ) | 3 | 164 | |||||||||||||||||||||||||||||||
Dividends paid | (1,142 | ) | (1,142 | ) | ||||||||||||||||||||||||||||||||
Net income | 4,647 | 4,647 | ||||||||||||||||||||||||||||||||||
Other comprehensive income | (779 | ) | 1,187 | (91 | ) | 135 | 452 | |||||||||||||||||||||||||||||
Total comprehensive income | 5,099 | |||||||||||||||||||||||||||||||||||
December 31, 2003 | 1,799 | 11,564 | 16,976 | (1,021 | ) | 1,184 | (492 | ) | 20 | (256 | ) | 29,774 | ||||||||||||||||||||||||
Shares reacquired/sold | — | |||||||||||||||||||||||||||||||||||
Capital increase | 182 | 182 | ||||||||||||||||||||||||||||||||||
Dividends paid | (1,312 | ) | (1,312 | ) | ||||||||||||||||||||||||||||||||
Net income | 4,339 | 4,339 | ||||||||||||||||||||||||||||||||||
Other comprehensive income | 125 | 994 | (598 | ) | 56 | 577 | ||||||||||||||||||||||||||||||
Total comprehensive income | 4,916 | |||||||||||||||||||||||||||||||||||
December 31, 2004 | 1,799 | 11,746 | 20,003 | (896 | ) | 2,178 | (1,090 | ) | 76 | (256 | ) | 33,560 | ||||||||||||||||||||||||
F-5
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• | The Central Europe market unit, led by E.ON Energie AG (“E.ON Energie”), Munich, Germany, operates E.ON’s integrated electricity business and the downstream gas business in Central Europe. | |
• | Pan-European Gas is responsible for the upstream and midstream gas business. Moreover, this market unit holds predominantly minority interests in companies of the downstream gas business. This market unit is led by E.ON Ruhrgas AG (“E.ON Ruhrgas”), Essen, Germany (formerly: Ruhrgas AG). | |
• | The U.K. market unit encompasses the integrated energy business in the United Kingdom. This market unit is led by E.ON UK plc (“E.ON UK”), Coventry, U.K. (formerly: Powergen UK plc). | |
• | The Nordic market unit, which is led by E.ON Nordic AB (“E.ON Nordic”), Malmö, Sweden, focuses on the integrated energy business in Northern Europe. It operates through the two integrated energy companies Sydkraft AB (“Sydkraft”), Malmö, Sweden, and E.ON Finland Oyj (“E.ON Finland”), Espoo, Finland, primarily in Sweden and Finland. | |
• | The U.S. Midwest market unit, led by LG&E Energy LLC (“LG&E Energy”), Louisville, Kentucky, U.S., is primarily active in the regulated energy market in the U.S. state of Kentucky. |
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• | Majority-owned subsidiaries in which E.ON directly or indirectly exercises control through a majority of the stockholders’ voting rights (“affiliated companies”) are fully consolidated. Furthermore, Financial Accounting Standards Board (“FASB”) Interpretation (“FIN”) No. 46 (revised December 2003), “Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51” (“FIN 46R”), requires E.ON to consolidate so-called variable interest entities in which it is the primary beneficiary for economic purposes, even if it does not have a controlling interest. | |
• | Majority-owned companies in which E.ON does not exercise management control due to restrictions in the control of assets and management (“unconsolidated affiliates”) are generally accounted for under the equity method. Companies in which E.ON has the ability to exercise significant influence in the investees’ operations (“associated companies”) are also accounted for under the equity method. These are mainly companies in which E.ON holds an interest of between 20 and 50 percent. | |
• | All other share investments are accounted for under the cost method or, if they are marketable, at fair value. |
F-7
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€1, rate as of | ||||||||||||||||||||||||
December 31, | €1, annual average rate | |||||||||||||||||||||||
Currencies | ISO-Code | 2004 | 2003 | 2004 | 2003 | 2002 | ||||||||||||||||||
Swiss franc | CHF | 1.54 | 1.56 | 1.54 | 1.52 | 1.47 | ||||||||||||||||||
British pound | GBP | 0.71 | 0.70 | 0.68 | 0.69 | 0.63 | ||||||||||||||||||
Japanese yen | JPY | 141.03 | 133.72 | 134.42 | 130.96 | 118.04 | ||||||||||||||||||
Swedish krona | SEK | 9.02 | 9.08 | 9.12 | 9.12 | 9.16 | ||||||||||||||||||
U.S. dollar | USD | 1.36 | 1.25 | 1.24 | 1.13 | 0.95 |
(1) | The countries within the European Monetary Union are Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, The Netherlands, Portugal and Spain. |
F-8
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F-9
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• | The first step is to compare each reporting unit’s fair value with its carrying amount including goodwill. If a reporting unit’s carrying amount exceeds its fair value, this indicates that its goodwill may be impaired and the second step is required. | |
• | The second step is to compare the implied fair value of the reporting unit’s goodwill with the carrying amount of its goodwill. The implied fair value is computed by allocating the reporting unit’s fair value to all of its assets and liabilities in a manner that is similar to a purchase price allocation in a business combination in accordance with SFAS 141. The remainder after this allocation is the implied fair value of the reporting unit’s goodwill. If this fair value of goodwill is less than its carrying value, the difference is recorded as an impairment. |
F-10
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Useful Lives of Property, Plant and Equipment | |||||
Buildings | 10 to 50 years | ||||
Power plants | |||||
Conventional components | 10 to 60 years | ||||
Nuclear components | up to 25 years | ||||
Hydro power plants and other facilities used to generate renewable energy | 10 to 50 years | ||||
Equipment, fixtures, furniture and office equipment | 3 to 25 years | ||||
Technical equipment for storage, distribution and transmission | 15 to 65 years |
F-11
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F-12
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F-13
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F-14
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F-15
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F-16
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Scope of Consolidation | Domestic | Foreign | Total | |||||||||
Consolidated companies as of December 31, 2003 | 188 | 409 | 597 | |||||||||
Additions | 29 | 106 | 135 | |||||||||
Disposals | (20 | ) | (46 | ) | (66 | ) | ||||||
Consolidated companies as of December 31, 2004 | 197 | 469 | 666 | |||||||||
F-17
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January 16, | ||||
€ in millions | 2004 | |||
Intangible assets | 10 | |||
Goodwill | 473 | |||
Property, plant and equipment | 1,745 | |||
Financial assets | 34 | |||
Non-fixed assets | 197 | |||
Other assets | 20 | |||
Total assets | 2,479 | |||
Accrued liabilities | (178 | ) | ||
Liabilities | (1,911 | ) | ||
Other liabilities | (335 | ) | ||
Total liabilities | (2,424 | ) | ||
Net assets | 55 | |||
F-18
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2004 | 2003 | |||||||
€ in millions | unaudited | unaudited | ||||||
Net sales | 44,769 | 44,434 | ||||||
Income before changes in accounting principles | 4,343 | 5,156 | ||||||
Net income | 4,343 | 4,726 | ||||||
Earnings per share (in€) | 6.61 | 7.23 |
F-19
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F-20
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December 31, | ||||
€ in millions | 2004 | |||
Fixed assets | 553 | |||
Non-fixed assets | — | |||
Total assets | 553 | |||
Total liabilities | (54 | ) | ||
Net assets | 499 | |||
F-21
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February 1, | ||||
€ in millions | 2003 | |||
Intangible assets | 651 | |||
Property, plant and equipment | 4,191 | |||
Financial assets | 4,843 | |||
Non-fixed assets | 6,042 | |||
Other assets | 200 | |||
Total assets | 15,927 | |||
Accrued liabilities | (2,098 | ) | ||
Liabilities | (4,702 | ) | ||
Other liabilities (including minority interests) | (1,854 | ) | ||
Total liabilities | (8,654 | ) | ||
Net assets (excluding goodwill) | 7,273 | |||
F-22
Table of Contents
• | Bayerngas GmbH (“Bayerngas”), Munich, Germany (held by E.ON Energie (22.0 percent) and E.ON Ruhrgas (22.0 percent)) | |
• | Gelsenwasser AG (“Gelsenwasser”), Gelsenkirchen, Germany (E.ON Energie (80.5 percent)) | |
• | swb AG (“swb”), Bremen, Germany (E.ON Energie (22.0 percent) and E.ON Ruhrgas (10.4 percent)) | |
• | Verbundnetz Gas AG (“VNG”), Leipzig, Germany (E.ON Energie (5.3 percent) and E.ON Ruhrgas (36.8 percent)) | |
• | EWE Aktiengesellschaft (“EWE”), Oldenburg, Germany (E.ON Energie (27.4 percent)) |
F-23
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F-24
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€ in millions | 2003 | 2002 | ||||||
Sales | — | 1,703 | ||||||
Gain/(Loss) on disposal, net | (35 | ) | 1,367 | |||||
Other income (expenses), net | — | (1,284 | ) | |||||
Income/(Loss) from continuing operations before income taxes and minority interests | (35 | ) | 1,786 | |||||
Income taxes | (2 | ) | (5 | ) | ||||
Minority interests | — | 3 | ||||||
Income/(Loss) from discontinued operations | (37 | ) | 1,784 | |||||
€ in millions | 2003 | 2002 | ||||||
Sales | 295 | 369 | ||||||
Gain on disposal, net | 418 | — | ||||||
Other income (expenses), net | (201 | ) | (314 | ) | ||||
Income from continuing operations before income taxes and minority interests | 512 | 55 | ||||||
Income taxes | (24 | ) | (17 | ) | ||||
Minority interests | (9 | ) | (14 | ) | ||||
Income from discontinued operations | 479 | 24 | ||||||
F-25
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€ in millions | 2003 | 2002 | ||||||
Sales | 202 | 468 | ||||||
Gain on disposal, net | 641 | — | ||||||
Other income (expenses), net | (145 | ) | (376 | ) | ||||
Income from continuing operations before income taxes and minority interests | 698 | 92 | ||||||
Income taxes | (17 | ) | (39 | ) | ||||
Minority interests | — | (1 | ) | |||||
Income from discontinued operations | 681 | 52 | ||||||
F-26
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July 1, 2002 | October 21, 2002 | |||||||
E.ON UK | ||||||||
€ in millions | without TXU | TXU | ||||||
Intangible assets | 523 | 714 | ||||||
Goodwill | 8,916 | 2,343 | ||||||
Property, plant and equipment | 8,164 | 28 | ||||||
Financial assets | 779 | — | ||||||
Non-fixed assets | 1,960 | 558 | ||||||
Total assets | 20,342 | 3,643 | ||||||
Accrued liabilities | (9,321 | ) | (679 | ) | ||||
Liabilities | (3,056 | ) | (381 | ) | ||||
Other liabilities (including minority interests) | (136 | ) | — | |||||
Total liabilities | (12,513 | ) | (1,060 | ) | ||||
Net assets | 7,829 | 2,583 | ||||||
F-27
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F-28
Table of Contents
€ in millions | 2002 | |||
Sales | 8,840 | |||
Gain on disposal, net | 588 | |||
Other income (expenses), net | (8,638 | ) | ||
Income from continuing operations before income taxes and minority interests | 790 | |||
Income taxes | (125 | ) | ||
Minority interests | (62 | ) | ||
Income from discontinued operations | 603 | |||
F-29
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€ in millions | 2002 | |||
Sales | 807 | |||
Gain on disposal, net | 893 | |||
Other income (expenses), net | (763 | ) | ||
Income from continuing operations before income taxes and minority interests | 937 | |||
Income taxes | (10 | ) | ||
Minority interests | — | |||
Income from discontinued operations | 927 | |||
• | In January 2002, Degussa sold the companies that had conducted its gelatin activities to Sobel N.V., Eindhoven, The Netherlands. The gelatin activities were deconsolidated as of February 10, 2002. | |
• | In February 2002, Degussa sold its persulfate operations to Unionchimica Industriale S.p.A., Bergamo, Italy. The persulfate operations were deconsolidated as of March 31, 2002. | |
• | In February 2002, Degussa sold its textile additives activities to Giovanni Bozzetto S.p.A., Milan, Italy. The textile additives activities were deconsolidated as of February 28, 2002. | |
• | In April 2002, Degussa sold SKW Piesteritz Holding GmbH (“SKW Piesteritz”), Piesteritz, Germany, to A&A Stickstoff Holding AG, Binningen, Switzerland. SKW Piesteritz was deconsolidated as of June 30, 2002. | |
• | In June 2002, Degussa sold Degussa Bank GmbH (“Degussa Bank”), Frankfurt am Main, Germany, to the Allgemeine Deutsche Direktbank AG, Frankfurt am Main, Germany. Degussa Bank was deconsolidated as of June 30, 2002. | |
• | In August 2002, Degussa sold Viatris GmbH & Co. KG (“Viatris”), Frankfurt am Main, Germany, to Advent International Corporation, Boston, Massachusetts, U.S. Viatris was deconsolidated as of September 30, 2002. | |
• | In December 2002, Degussa sold Zentaris AG (“Zentaris”), Frankfurt am Main, Germany, to Æterna Laboratories Inc., Quebec, Canada. Zentaris was deconsolidated as of December 31, 2002. |
€ in millions | 2002 | |||
Sales | 410 | |||
Loss on disposal, net | (93 | ) | ||
Other income (expenses), net | (388 | ) | ||
Loss from continuing operations before income taxes and minority interests | (71 | ) | ||
Income taxes | (59 | ) | ||
Minority interests | 46 | |||
Loss from discontinued operations | (84 | ) | ||
F-30
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€ in millions | 2004 | 2003 | 2002 | |||||||||
Gains from the disposal of businesses and/or fixed assets | 912 | 1,783 | 1,045 | |||||||||
Gains on derivative instruments, net | 585 | 384 | (172 | ) | ||||||||
Exchange rate differences | (311 | ) | 38 | 17 | ||||||||
SAB 51 gain | — | — | 105 | |||||||||
Research and development costs | (55 | ) | (69 | ) | (380 | ) | ||||||
Write-down of current assets | (43 | ) | (211 | ) | (73 | ) | ||||||
Miscellaneous | 647 | 166 | (306 | ) | ||||||||
Total | 1,735 | 2,091 | 236 | |||||||||
F-31
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€ in millions | 2004 | 2003 | 2002 | |||||||||
Income from companies in which share investments are held; thereof from affiliated companies:€41 (2003:€34; 2002:€28) | 195 | 172 | 148 | |||||||||
Income from profit- and loss-pooling agreements; thereof from affiliated companies:€5 (2003:€9; 2002:€15) | 5 | 18 | 34 | |||||||||
Income from companies accounted for under the equity method; thereof from affiliated companies:€4 (2003:€16; 2002:€232) | 817 | 794 | 1,422 | |||||||||
Losses from companies accounted for under the equity method; thereof from affiliated companies:€(54) (2003:€(3); 2002:€(40)) | (168 | ) | (130 | ) | (98 | ) | ||||||
Losses from profit- and loss-pooling agreements; thereof from affiliated companies:€(8) (2003:€(12); 2002:€(3)) | (10 | ) | (19 | ) | (6 | ) | ||||||
Write-down of investments | (77 | ) | (53 | ) | (28 | ) | ||||||
Income from share investments | 762 | 782 | 1,472 | |||||||||
Income from other long-term securities | 36 | 48 | 123 | |||||||||
Income from long-term loans | 43 | 52 | 42 | |||||||||
Other interest and similar income; thereof from affiliated companies:€9 (2003:€0; 2002:€11) | 579 | 678 | 838 | |||||||||
Interest and similar expenses; thereof from affiliated companies:€(6) (2003:€(12); 2002:€20) thereof SFAS 143 accretion expense:€(499) (2003:€(486); 2002:€0) | (1,799 | ) | (1,885 | ) | (1,375 | ) | ||||||
Interest and similar expenses (net) | (1,141 | ) | (1,107 | ) | (372 | ) | ||||||
Write-down of financial assets and long-term loans | (54 | ) | (34 | ) | (2,373 | ) | ||||||
Financial earnings | (433 | ) | (359 | ) | (1,273 | ) | ||||||
F-32
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€ in millions | 2004 | 2003 | 2002 | ||||||||||
Current taxes | |||||||||||||
Domestic corporate income tax | 1,039 | 403 | 482 | ||||||||||
Domestic trade tax on income | 492 | 297 | 280 | ||||||||||
Foreign income tax | 392 | 283 | 110 | ||||||||||
Other | 4 | 12 | (19 | ) | |||||||||
Total | 1,927 | 995 | 853 | ||||||||||
Deferred taxes | |||||||||||||
Domestic | 32 | 207 | (1,435 | ) | |||||||||
Foreign | (12 | ) | (78 | ) | (80 | ) | |||||||
Total | 20 | 129 | (1,515 | ) | |||||||||
Income taxes | 1,947 | 1,124 | (662 | ) | |||||||||
F-33
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F-34
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2004 | 2004 | 2003 | 2003 | 2002 | 2002 | ||||||||||||||||||||
€ in millions | Amount | Percent | Amount | Percent | Amount | Percent | |||||||||||||||||||
Corporate income tax | 1,700 | 25.0 | 1,468 | 26.5 | (190 | ) | 25.0 | ||||||||||||||||||
Credit for dividend distributions | — | — | — | — | (179 | ) | 23.6 | ||||||||||||||||||
German municipal trade taxes net of federal tax benefit | 460 | 6.8 | 72 | 1.3 | 113 | (14.9 | ) | ||||||||||||||||||
Foreign tax rate differentials | 167 | 2.4 | 74 | 1.3 | (44 | ) | 5.8 | ||||||||||||||||||
Change in valuation allowances | (199 | ) | (2.9 | ) | 543 | 9.8 | (83 | ) | 10.9 | ||||||||||||||||
Changes in tax rate/tax law | 142 | 2.1 | 60 | 1.1 | (2 | ) | 0.3 | ||||||||||||||||||
Tax effects on | |||||||||||||||||||||||||
Tax-free income | (351 | ) | (5.2 | ) | (415 | ) | (7.5 | ) | (489 | ) | 64.5 | ||||||||||||||
Equity accounting | (135 | ) | (2.0 | ) | (163 | ) | (2.9 | ) | (330 | ) | 43.5 | ||||||||||||||
Non-deductible goodwill amortization | — | — | — | — | 717 | (94.5 | ) | ||||||||||||||||||
Other(1) | 163 | 2.4 | (515 | ) | (9.3 | ) | (175 | ) | 23.1 | ||||||||||||||||
Effective income taxes/tax rate | 1,947 | 28.6 | 1,124 | 20.3 | (662 | ) | 87.3 | ||||||||||||||||||
(1) | Primarily prior-year current/deferred tax charge of€53 million (2003:€170 million credit; 2002:€33 million credit) and a tax charge of€63 million (2003:€49 million; 2002:€19 million) arising from non-deductible foreign expenditure. |
€ in millions | 2004 | 2003 | 2002 | |||||||||
VEBA Oel | — | 2 | 5 | |||||||||
Stinnes | — | — | 125 | |||||||||
Degussa operations | — | — | 59 | |||||||||
Viterra Energy Services/ Viterra Contracting | — | 17 | 39 | |||||||||
VAW | — | — | 10 | |||||||||
MEMC | — | 9 | — | |||||||||
Gelsenwasser | — | 24 | 17 | |||||||||
Total | — | 52 | 255 | |||||||||
€ in millions | 2004 | 2003 | 2002 | |||||||||
Domestic | 3,967 | 3,411 | 620 | |||||||||
Foreign | 2,832 | 2,127 | (1,379 | ) | ||||||||
Total | 6,799 | 5,538 | (759 | ) | ||||||||
F-35
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December 31, | |||||||||
€ in millions | 2004 | 2003 | |||||||
Deferred tax assets | |||||||||
Intangible assets | 167 | 144 | |||||||
Fixed assets | 376 | 516 | |||||||
Investments and long-term financial assets | 518 | 427 | |||||||
Inventories | 14 | 21 | |||||||
Receivables | 343 | 90 | |||||||
Accrued liabilities | 4,165 | 3,989 | |||||||
Liabilities | 1,591 | 1,600 | |||||||
Net operating loss carryforwards | 1,089 | 1,184 | |||||||
Tax credits | 34 | 35 | |||||||
Other | 440 | 280 | |||||||
Subtotal | 8,737 | 8,286 | |||||||
Valuation allowance | (509 | ) | (726 | ) | |||||
Total | 8,228 | 7,560 | |||||||
Deferred tax liabilities | |||||||||
Intangible assets | (700 | ) | (788 | ) | |||||
Fixed assets | (6,155 | ) | (5,907 | ) | |||||
Investments and long-term financial assets | (1,114 | ) | (630 | ) | |||||
Inventories | (98 | ) | (96 | ) | |||||
Receivables | (2,141 | ) | (1,694 | ) | |||||
Accrued liabilities | (1,086 | ) | (1,021 | ) | |||||
Liabilities | (1,283 | ) | (1,522 | ) | |||||
Other | (705 | ) | (642 | ) | |||||
Total | (13,282 | ) | (12,300 | ) | |||||
Net deferred tax liabilities | (5,054 | ) | (4,740 | ) | |||||
December 31, 2004 | December 31, 2003 | |||||||||||||||
Thereof | Thereof | |||||||||||||||
€ in millions | Total | non-current | Total | non-current | ||||||||||||
Deferred tax assets | 2,060 | 1,865 | 2,251 | 2,123 | ||||||||||||
Valuation allowance | (509 | ) | (506 | ) | (726 | ) | (722 | ) | ||||||||
Net deferred tax assets | 1,551 | 1,359 | 1,525 | 1,401 | ||||||||||||
Less deferred tax liabilities | (6,605 | ) | (5,779 | ) | (6,265 | ) | (5,744 | ) | ||||||||
Net deferred tax liabilities | (5,054 | ) | (4,420 | ) | (4,740 | ) | (4,343 | ) | ||||||||
F-36
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December 31, | ||||||||
€ in millions | 2004 | 2003 | ||||||
Domestic tax loss carryforwards | 4,487 | 6,118 | ||||||
Foreign tax loss carryforwards | 1,158 | 513 | ||||||
Total | 5,645 | 6,631 | ||||||
€ in millions | 2004 | 2003 | 2002 | |||||||||
Wages and salaries | 3,334 | 3,500 | 4,712 | |||||||||
Social security contributions | 560 | 590 | 835 | |||||||||
Pension costs and other employee benefits; thereof pension costs:€768 (2003: €678; 2002: €707) | 818 | 816 | 816 | |||||||||
Total | 4,712 | 4,906 | 6,363 | |||||||||
F-37
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6th tranche | 5th tranche | 4th tranche | 3rd tranche | 2nd tranche | ||||||||||||||||
Date of issuance | Jan. 2, 2004 | Jan. 2, 2003 | Jan. 2, 2002 | Jan. 2, 2001 | Jan. 3, 2000 | |||||||||||||||
Term | 7 years | 7 years | 7 years | 7 years | 7 years | |||||||||||||||
Blackout period | 2 years | 2 years | 2 years | 2 years | 2 years | |||||||||||||||
Price at issuance (in €) | 49.05 | 42.11 | 54.95 | 62.95 | 48.35 | |||||||||||||||
Number of participants in year of issuance | 356 | 343 | 186 | 231 | 155 | |||||||||||||||
Number of SARs issued (in millions) | 2.6 | 2.5 | 1.6 | 1.8 | 1.4 | |||||||||||||||
Exercise hurdle (exercise price exceeds the price at issuance by at least %) | 10 | 10 | 10 | 20 | 20 | |||||||||||||||
Exercise hurdle (minimum exercise price in €) | 53.96 | 46.32 | 60.45 | 75.54 | 58.02 | |||||||||||||||
Intrinsic value as of December 31, 2004 (in €) | 18.01 | 24.95 | 12.11 | 4.11 | 18.71 | |||||||||||||||
Maximum exercise gain (in€) | 49.05 | — | — | — | — | |||||||||||||||
Remainder of SARs as of December 31, 2004 (in millions) | 2.6 | 2.5 | 0.8 | 1.3 | 0.2 | |||||||||||||||
Provision as of December 31, 2004 (€ in millions) | 23.8 | 62.3 | 9.8 | 5.3 | 3.6 | |||||||||||||||
Exercise gains in 2004 (€ in millions) | 0.1 | 0.7 | 7.4 | — | 6.9 | |||||||||||||||
Expense in 2004 (€ in millions) | 23.9 | 50.8 | 17.2 | 5.3 | 7.8 |
• | Between the date of issuance and exercise, the E.ON stock price must outperform the Dow Jones STOXX Utilities Index (Price EUR) on at least ten consecutive trading days. | |
• | The E.ON stock price on the exercise date must be at least 10.0 percent (for the second and third tranches: at least 20.0 percent) above the price at issuance. |
F-38
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Number of Options | 6th tranche | 5th tranche | 4th tranche | 3rd tranche | 2nd tranche | |||||||||||||||
Outstanding as of January 1, 2001 | — | — | — | — | 1,443,800 | |||||||||||||||
Granted in 2001 | — | — | — | 1,822,620 | — | |||||||||||||||
Exercised in 2001 | — | — | — | — | 35,000 | |||||||||||||||
Cancelled in 2001 | — | — | — | — | 63,000 | |||||||||||||||
Outstanding as of December 31, 2001 | — | — | — | 1,822,620 | 1,345,800 | |||||||||||||||
Granted in 2002 | — | — | 1,646,419 | — | — | |||||||||||||||
Exercised in 2002 | — | — | — | — | 220,150 | |||||||||||||||
Cancelled in 2002 | — | — | — | — | — | |||||||||||||||
Change in scope of consolidation | — | — | — | (504,720 | ) | (301,000 | ) | |||||||||||||
Outstanding as of December 31, 2002 | — | — | 1,646,419 | 1,317,900 | 824,650 | |||||||||||||||
Granted in 2003 | — | 2,545,191 | 15,000 | — | — | |||||||||||||||
Exercised in 2003 | — | 9,902 | — | — | — | |||||||||||||||
Cancelled in 2003 | — | — | — | — | — | |||||||||||||||
Change in scope of consolidation | — | — | (46,000 | ) | (17,000 | ) | (26,800 | ) | ||||||||||||
Outstanding as of December 31, 2003 | — | 2,535,289 | 1,615,419 | 1,300,900 | 797,850 | |||||||||||||||
Granted in 2004 | 2,643,847 | 12,107 | — | — | — | |||||||||||||||
Exercised in 2004 | 6,666 | 49,000 | 805,533 | — | 605,350 | |||||||||||||||
Cancelled in 2004 | — | — | — | — | — | |||||||||||||||
Change in scope of consolidation | — | — | — | — | — | |||||||||||||||
Outstanding as of December 31, 2004 | 2,637,181 | 2,498,396 | 809,886 | 1,300,900 | 192,500 | |||||||||||||||
SARs exercisable at year end | — | — | 809,886 | — | 192,500 |
F-39
Table of Contents
Employees | 2004 | 2003 | ||||||
Central Europe | 37,509 | 34,885 | ||||||
Pan-European Gas | 11,451 | 11,425 | ||||||
U.K. | 10,453 | 6,717 | ||||||
Nordic | 5,908 | 5,726 | ||||||
U.S. Midwest | 3,481 | 3,841 | ||||||
Corporate Center | 418 | 594 | ||||||
Core energy business | 69,220 | 63,188 | ||||||
Other activities | 1,698 | 1,919 | ||||||
Total | 70,918 | 65,107 | ||||||
€ in millions | 2004 | 2003 | 2002 | ||||||||||
Income/(Loss) from continuing operations | 4,348 | 3,950 | (720 | ) | |||||||||
Income/(Loss) from discontinued operations | (9 | ) | 1,137 | 3,306 | |||||||||
Income/(Loss) from cumulative effect of changes in accounting | |||||||||||||
principles, net | — | (440 | ) | 191 | |||||||||
Net income | 4,339 | 4,647 | 2,777 | ||||||||||
Weighted-average number of shares outstanding (in millions) | 657 | 654 | 652 | ||||||||||
Earnings per share (in€) | |||||||||||||
from continuing operations | 6.62 | 6.04 | (1.10 | ) | |||||||||
from discontinued operations | (0.01 | ) | 1.74 | 5.07 | |||||||||
from cumulative effect of changes in accounting principles, net | — | (0.67 | ) | 0.29 | |||||||||
from net income | 6.61 | 7.11 | 4.26 | ||||||||||
F-40
Table of Contents
Acquisition and Production Costs | ||||||||||||||||||||||||||||||||
Exchange | Change in | |||||||||||||||||||||||||||||||
January 1, | rate | scope of | December 31, | |||||||||||||||||||||||||||||
€ in millions | 2004 | differences | consolidation | Additions | Disposals | Transfers | Impairment | 2004 | ||||||||||||||||||||||||
Goodwill | 14,270 | (316 | ) | 601 | 398 | 22 | (173 | ) | — | 14,758 | ||||||||||||||||||||||
Intangible assets | 5,436 | (7 | ) | 91 | 123 | 57 | (149 | ) | 9 | 5,428 | ||||||||||||||||||||||
Advance payments on intangible assets | — | — | — | 12 | — | (5 | ) | — | 7 | |||||||||||||||||||||||
Goodwill and intangible assets | 19,706 | (323 | ) | 692 | 533 | 79 | (327 | ) | 9 | 20,193 | ||||||||||||||||||||||
Real estate, leasehold rights and buildings | 19,185 | 44 | 253 | 379 | 769 | (322 | ) | 117 | 18,653 | |||||||||||||||||||||||
Technical equipment, plant and machinery | 69,736 | (441 | ) | 2,878 | 1,316 | 943 | 1,228 | 49 | 73,725 | |||||||||||||||||||||||
Other equipment, fixtures, furniture and office equipment | 3,206 | (12 | ) | 108 | 175 | 315 | 60 | — | 3,222 | |||||||||||||||||||||||
Advance payments and construction in progress | 1,333 | (14 | ) | 185 | 1,111 | 23 | (1,243 | ) | 1 | 1,348 | ||||||||||||||||||||||
Tangible assets | 93,460 | (423 | ) | 3,424 | 2,981 | 2,050 | (277 | ) | 167 | 96,948 | ||||||||||||||||||||||
Shares in unconsolidated affiliates | 637 | 3 | (24 | ) | 175 | 171 | 17 | 38 | 599 | |||||||||||||||||||||||
Shares in associated companies | 10,904 | 105 | (19 | ) | 397 | 925 | 116 | 147 | 10,431 | |||||||||||||||||||||||
Other share investments | 3,073 | 6 | (27 | ) | 180 | 413 | (223 | ) | 36 | 2,560 | ||||||||||||||||||||||
Long-term loans to unconsolidated affiliates | 694 | — | (18 | ) | 59 | 35 | (108 | ) | — | 592 | ||||||||||||||||||||||
Loans to associated companies and other share investments | 325 | 2 | — | 59 | 44 | (18 | ) | 9 | 315 | |||||||||||||||||||||||
Total other long-term loans | 801 | 1 | 1 | 29 | 281 | 5 | — | 556 | ||||||||||||||||||||||||
Long-term securities | 678 | — | 10 | 338 | 560 | — | — | 466 | ||||||||||||||||||||||||
Financial assets | 17,112 | 117 | (77 | ) | 1,237 | 2,429 | (211 | ) | 230 | 15,519 | ||||||||||||||||||||||
Total | 130,278 | (629 | ) | 4,039 | 4,751 | 4,558 | (815 | ) | 406 | 132,660 | ||||||||||||||||||||||
Accumulated Depreciation | ||||||||||||||||||||||||||||||||
Exchange | Change in | Fair value | ||||||||||||||||||||||||||||||
January 1, | rate | scope of | OCI | December 31, | ||||||||||||||||||||||||||||
2004 | differences | consolidation | Additions | Disposals | Transfers | adjustments | 2004 | |||||||||||||||||||||||||
Goodwill | 315 | 6 | (17 | ) | — | — | — | — | 304 | |||||||||||||||||||||||
Intangible assets | 1,283 | (6 | ) | 33 | 381 | 24 | (20 | ) | — | 1,647 | ||||||||||||||||||||||
Advance payments on intangible assets | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Goodwill and intangible assets | 1,598 | — | 16 | 381 | 24 | (20 | ) | — | 1,951 | |||||||||||||||||||||||
Real estate, leasehold rights and buildings | 6,552 | 4 | 165 | 373 | 357 | (24 | ) | — | 6,713 | |||||||||||||||||||||||
Technical equipment, plant and machinery | 41,916 | (169 | ) | 1,284 | 1,903 | 451 | (50 | ) | — | 44,433 | ||||||||||||||||||||||
Other equipment, fixtures, furniture and office equipment | 2,177 | 26 | 69 | 187 | 253 | 10 | — | 2,216 | ||||||||||||||||||||||||
Advance payments and construction in progress | 18 | — | — | 6 | 1 | — | — | 23 | ||||||||||||||||||||||||
Tangible assets | 50,663 | (139 | ) | 1,518 | 2,469 | 1,062 | (64 | ) | — | 53,385 | ||||||||||||||||||||||
Shares in unconsolidated affiliates | 39 | 1 | 6 | — | 30 | 12 | — | 28 | ||||||||||||||||||||||||
Shares in associated companies | 536 | 1 | (1 | ) | — | 2 | (55 | ) | 16 | 495 | ||||||||||||||||||||||
Other share investments | (920 | ) | — | 1 | — | 10 | (1 | ) | (994 | ) | (1,924 | ) | ||||||||||||||||||||
Long-term loans to unconsolidated affiliates | (1 | ) | — | — | — | — | 1 | — | — | |||||||||||||||||||||||
Loans to associated companies and other share investments | 29 | — | — | — | 9 | (2 | ) | — | 18 | |||||||||||||||||||||||
Total other long-term loans | 7 | — | — | — | 2 | 2 | — | 7 | ||||||||||||||||||||||||
Long-term securities | (303 | ) | — | — | — | — | — | (65 | ) | (368 | ) | |||||||||||||||||||||
Financial assets | (613 | ) | 2 | 6 | — | 53 | (43 | ) | (1,043 | ) | (1,744 | ) | ||||||||||||||||||||
Total | 51,648 | (137 | ) | 1,540 | 2,850 | 1,139 | (127 | ) | (1,043 | ) | 53,592 | |||||||||||||||||||||
[Additional columns below]
[Continued from above table, first column(s) repeated]
Net book values | ||||||||
December 31, | December 31, | |||||||
2004 | 2003 | |||||||
Goodwill | 14,454 | 13,955 | ||||||
Intangible assets | 3,781 | 4,153 | ||||||
Advance payments on intangible assets | 7 | — | ||||||
Goodwill and intangible assets | 18,242 | 18,108 | ||||||
Real estate, leasehold rights and buildings | 11,940 | 12,633 | ||||||
Technical equipment, plant and machinery | 29,292 | 27,820 | ||||||
Other equipment, fixtures, furniture and office equipment | 1,006 | 1,029 | ||||||
Advance payments and construction in progress | 1,325 | 1,315 | ||||||
Tangible assets | 43,563 | 42,797 | ||||||
Shares in unconsolidated affiliates | 571 | 598 | ||||||
Shares in associated companies | 9,936 | 10,368 | ||||||
Other share investments | 4,484 | 3,993 | ||||||
Long-term loans to unconsolidated affiliates | 592 | 695 | ||||||
Loans to associated companies and other share investments | 297 | 296 | ||||||
Total other long-term loans | 549 | 794 | ||||||
Long-term securities | 834 | 981 | ||||||
Financial assets | 17,263 | 17,725 | ||||||
Total | 79,068 | 78,630 | ||||||
F-41
Table of Contents
a) | Goodwill and Other Intangible Assets |
Pan- | Core | |||||||||||||||||||||||||||||||||||
Central | European | U.S. | Corporate | Energy | Other | |||||||||||||||||||||||||||||||
€ in millions | Europe | Gas | U.K. | Nordic | Midwest | Center | Business | Activities | Total | |||||||||||||||||||||||||||
Book value as of January 1, 2004 | 2,178 | 3,755 | 4,348 | 297 | 3,367 | — | 13,945 | 10 | 13,955 | |||||||||||||||||||||||||||
Goodwill additions/disposals | 282 | 167 | 473 | 71 | — | 1 | 994 | — | 994 | |||||||||||||||||||||||||||
Other changes(1) | (155 | ) | (2 | ) | (42 | ) | (9 | ) | (287 | ) | — | (495 | ) | — | (495 | ) | ||||||||||||||||||||
Book value as of December 31, 2004 | 2,305 | 3,920 | 4,779 | 359 | 3,080 | 1 | 14,444 | 10 | 14,454 | |||||||||||||||||||||||||||
(1) | Other changes include transfers arising from finalizing purchase price allocations and exchange rate differences. |
F-42
Table of Contents
December 31, 2004 | |||||||||||||
Acquisition | Accumulated | Net book | |||||||||||
€ in millions | costs | amortization | value | ||||||||||
Intangible assets subject to amortization | |||||||||||||
Marketing-related intangible assets | 220 | 72 | 148 | ||||||||||
thereof brand names | 215 | 71 | 144 | ||||||||||
Customer-related intangible assets | 2,238 | 578 | 1,660 | ||||||||||
thereof customer lists and customer relationships | 2,074 | 514 | 1,560 | ||||||||||
Contract-based intangible assets | 1,488 | 540 | 948 | ||||||||||
thereof operating permits | 1,201 | 360 | 841 | ||||||||||
Technology-based intangible assets | 598 | 457 | 141 | ||||||||||
thereof computer software | 467 | 354 | 113 | ||||||||||
Intangible assets not subject to amortization | 891 | — | 891 | ||||||||||
thereof easements | 802 | — | 802 | ||||||||||
Total | 5,435 | 1,647 | 3,788 | ||||||||||
Acquisition | Weighted average | ||||||||
costs | amortization period | ||||||||
(€ in millions) | (in years) | ||||||||
Intangible assets subject to amortization | |||||||||
Marketing-related intangible assets | — | — | |||||||
Customer-related intangible assets | 23 | 23 | |||||||
thereof customer lists and customer relationships | 19 | 19 | |||||||
Contract-based intangible assets | 13 | 18 | |||||||
thereof operating permits | 8 | 15 | |||||||
Technology-based intangible assets | 84 | 3 | |||||||
thereof computer software | 80 | 3 | |||||||
Intangible assets not subject to amortization | 25 | — | |||||||
Total | 145 | ||||||||
F-43
Table of Contents
€ in millions | ||||
2005 | 345 | |||
2006 | 309 | |||
2007 | 260 | |||
2008 | 210 | |||
2009 | 180 | |||
Total | 1,304 | |||
b) | Property, Plant and Equipment |
F-44
Table of Contents
E.ON’s | |||||||||||||||||
E.ON’s | accumulated | E.ON’s | |||||||||||||||
ownership | E.ON’s total | depreciation & | construction | ||||||||||||||
interest | acquisition cost | amortization | work in process | ||||||||||||||
Name of plants by type | in % | (€ in millions) | (€ in millions) | (€ in millions) | |||||||||||||
Nuclear | |||||||||||||||||
Isar 2 | 75.00 | 2,055 | 1,887 | 9 | |||||||||||||
Gundremmingen B | 25.00 | 108 | 92 | — | |||||||||||||
Gundremmingen C | 25.00 | 115 | 98 | — | |||||||||||||
Lignite | |||||||||||||||||
Lippendorf S | 50.00 | 530 | 342 | 4 | |||||||||||||
Hard Coal | |||||||||||||||||
Bexbach 1 | 8.33 | 64 | 60 | — | |||||||||||||
Trimble County | 75.00 | 439 | 152 | 3 | |||||||||||||
Rostock | 50.38 | 317 | 277 | — | |||||||||||||
Hydroelectric/ Wind | |||||||||||||||||
Nymølle Havspark/ Rødsand | 20.00 | 43 | 2 | — | |||||||||||||
Nußdorf | 53.00 | 55 | 40 | — | |||||||||||||
Ering | 50.00 | 31 | 28 | — | |||||||||||||
Egglfing | 50.00 | 47 | 42 | — |
c) | Financial Assets |
thereof | thereof | thereof | thereof | thereof | thereof | |||||||||||||||||||||||||||||||
€ in millions | 2004 | RAG | GFE(2) | 2003 | RAG | GFE | 2002 | RAG | GFE | |||||||||||||||||||||||||||
Sales | 55,790 | 18,240 | — | 51,096 | 12,791 | — | 46,260 | 15,258 | — | |||||||||||||||||||||||||||
Net income/(loss) | 2,415 | — | — | 2,258 | 86 | 1 | 3,246 | 21 | 576 | |||||||||||||||||||||||||||
E.ON’s share of net income/(loss) | 881 | — | — | 791 | 34 | — | 1,452 | 8 | 290 | |||||||||||||||||||||||||||
Other(1) | (232 | ) | — | — | (127 | ) | (49 | ) | — | (128 | ) | — | (109 | ) | ||||||||||||||||||||||
Income from companies accounted for under the equity method | 649 | — | — | 664 | (15 | ) | — | 1,324 | 8 | 181 | ||||||||||||||||||||||||||
(1) | Other primarily includes adjustments to conform with E.ON accounting policies, amortization of fair value adjustments due to purchase price allocations and intercompany eliminations. |
(2) | GFE was liquidated as of July 31, 2004. |
F-45
Table of Contents
December 31, | ||||||||||||||||||||||||
thereof | thereof | thereof | thereof | |||||||||||||||||||||
€ in millions | 2004 | RAG | GFE(2) | 2003 | RAG | GFE | ||||||||||||||||||
Fixed assets | 48,318 | 17,714 | — | 46,714 | 13,654 | — | ||||||||||||||||||
Current assets and prepaid expenses | 30,713 | 11,973 | — | 28,109 | 8,453 | 1 | ||||||||||||||||||
Accrued liabilities | 26,797 | 14,686 | — | 24,444 | 11,678 | — | ||||||||||||||||||
Liabilities and deferred income | 29,561 | 9,785 | — | 29,306 | 7,386 | — | ||||||||||||||||||
Minority interests | 3,085 | 2,889 | — | 512 | 404 | — | ||||||||||||||||||
Net assets | 19,588 | 2,327 | — | 20,561 | 2,639 | 1 | ||||||||||||||||||
E.ON’s share in equity | 7,433 | 912 | — | 7,699 | 1,034 | — | ||||||||||||||||||
Other(1) | 2,398 | (912 | ) | — | 2,678 | (1,034 | ) | — | ||||||||||||||||
Investment in companies accounted for under the equity method | 9,831 | — | — | 10,377 | — | — | ||||||||||||||||||
(1) | Other primarily includes adjustments to conform with E.ON accounting policies, goodwill, fair value adjustments due to purchase price allocations, intercompany eliminations and impairments. |
(2) | GFE was liquidated as of July 31, 2004. |
December 31, 2004 | December 31, 2003 | ||||||||||||||||||||||||||||||||
Gross | Gross | Gross | Gross | ||||||||||||||||||||||||||||||
Amortized | unrealized | unrealized | Amortized | unrealized | unrealized | ||||||||||||||||||||||||||||
€ in millions | cost | Fair value | loss | gain | cost | Fair value | loss | gain | |||||||||||||||||||||||||
Fixed-term securities | |||||||||||||||||||||||||||||||||
Less than 1 year | 109 | 109 | — | — | 11 | 11 | — | — | |||||||||||||||||||||||||
Between 1 and 5 years | 14 | 14 | — | — | 276 | 276 | — | — | |||||||||||||||||||||||||
More than 5 years | 97 | 101 | — | 4 | 94 | 95 | — | 1 | |||||||||||||||||||||||||
Subtotal | 220 | 224 | — | 4 | 381 | 382 | — | 1 | |||||||||||||||||||||||||
Non-fixed-term securities | 2,755 | 5,094 | 1 | 2,340 | 3,312 | 4,592 | 9 | 1,289 | |||||||||||||||||||||||||
Total | 2,975 | 5,318 | 1 | 2,344 | 3,693 | 4,974 | 9 | 1,290 | |||||||||||||||||||||||||
F-46
Table of Contents
December 31, 2004 | December 31, 2003 | |||||||||||||||||||||||
Interest rate | Maturity | Interest rate | Maturity | |||||||||||||||||||||
€ in millions | up to | through | € in millions | up to | through | |||||||||||||||||||
Loans to affiliated companies | 592 | 8.25% | 2025 | 695 | 3.90% | 2015 | ||||||||||||||||||
Loans to associated companies and other share investments | 297 | 9.00% | 2024 | 296 | 4.60% | 2007 | ||||||||||||||||||
Other long-term loans | 549 | 9.00% | 2023 | 794 | 9.00% | 2010 | ||||||||||||||||||
Total | 1,438 | 1,785 | ||||||||||||||||||||||
December 31, | |||||||||
€ in millions | 2004 | 2003 | |||||||
Raw materials and supplies by segment | |||||||||
Central Europe | 838 | 756 | |||||||
Pan-European Gas | 104 | 101 | |||||||
U.K. | 221 | 138 | |||||||
Nordic | 213 | 211 | |||||||
U.S. Midwest | 182 | 209 | |||||||
Corporate Center | — | (12 | ) | ||||||
Core energy business | 1,558 | 1,403 | |||||||
Other activities | 69 | 98 | |||||||
Total | 1,627 | 1,501 | |||||||
Work in progress | 320 | 405 | |||||||
Finished products | 98 | 83 | |||||||
Goods purchased for resale | 602 | 488 | |||||||
Inventories | 2,647 | 2,477 | |||||||
F-47
Table of Contents
December 31, 2004 | December 31, 2003 | |||||||||||||||
With a | With a | With a | With a | |||||||||||||
remaining | remaining term | remaining | remaining term | |||||||||||||
term up to | of more than | term up to | of more than | |||||||||||||
€ in millions | 1 year | 1 year | 1 year | 1 year | ||||||||||||
Financial receivables from affiliated companies | 85 | 19 | 180 | 43 | ||||||||||||
Financial receivables from associated companies | 84 | 3 | 74 | 6 | ||||||||||||
Other financial assets | 1,145 | 788 | 1,139 | 750 | ||||||||||||
Financial receivables and other financial assets | 1,314 | 810 | 1,393 | 799 | ||||||||||||
Trade receivables | 6,462 | 72 | 6,211 | 6 | ||||||||||||
Operating receivables from affiliated companies | 63 | — | 67 | — | ||||||||||||
Operating receivables from associated companies and other share investments | 747 | 24 | 781 | 26 | ||||||||||||
Reinsurance claim due from the mutual insurance fund | 44 | 974 | 42 | 833 | ||||||||||||
Regulatory assets | 58 | 55 | 69 | 91 | ||||||||||||
Other operating assets | 6,334 | 926 | 6,739 | 968 | ||||||||||||
Operating receivables and other operating assets | 13,708 | 2,051 | 13,909 | 1,924 | ||||||||||||
Receivables and other assets | 15,022 | 2,861 | 15,302 | 2,723 | ||||||||||||
F-48
Table of Contents
€ in millions | 2004 | 2003 | ||||||
Balance as of January 1 | 463 | 212 | ||||||
Changes affecting income | (13 | ) | 99 | |||||
Changes not affecting income | (19 | ) | 152 | |||||
Balance as of December 31 | 431 | 463 | ||||||
December 31, | ||||||||
€ in millions | 2004 | 2003 | ||||||
Deposits at banking institutions with an original maturity greater than 3 months | 89 | 539 | ||||||
Securities with an original maturity greater than 3 months | 7,751 | 6,935 | ||||||
Investments in short-term securities | 7,840 | 7,474 | ||||||
December 31, 2004 | December 31, 2003 | |||||||||||||||||||||||||||||||
Gross | Gross | Gross | Gross | |||||||||||||||||||||||||||||
Amortized | Fair | unrealized | unrealized | Amortized | Fair | unrealized | unrealized | |||||||||||||||||||||||||
€ in millions | cost | value | loss | gain | cost | value | loss | gain | ||||||||||||||||||||||||
Fixed-term securities | ||||||||||||||||||||||||||||||||
Less than 1 year | 165 | 168 | — | 3 | 163 | 166 | — | 3 | ||||||||||||||||||||||||
Between 1 and 5 years | 2,372 | 2,395 | 17 | 40 | 2,215 | 2,211 | 27 | 23 | ||||||||||||||||||||||||
More than 5 years | 2,359 | 2,413 | 27 | 81 | 1,968 | 1,934 | 57 | 23 | ||||||||||||||||||||||||
Subtotal | 4,896 | 4,976 | 44 | 124 | 4,346 | 4,311 | 84 | 49 | ||||||||||||||||||||||||
Non-fixed-term securities | 2,459 | 2,807 | 40 | 388 | 2,415 | 2,677 | 44 | 306 | ||||||||||||||||||||||||
Total | 7,355 | 7,783 | 84 | 512 | 6,761 | 6,988 | 128 | 355 | ||||||||||||||||||||||||
F-49
Table of Contents
December 31, 2004 | ||||||||||||||||||||||||
less than | 12 months | |||||||||||||||||||||||
12 months | or greater | Total | ||||||||||||||||||||||
Gross | Gross | Gross | ||||||||||||||||||||||
Fair | unrealized | Fair | unrealized | Fair | unrealized | |||||||||||||||||||
€ in millions | value | loss | value | loss | value | loss | ||||||||||||||||||
Fixed-term securities | ||||||||||||||||||||||||
Less than 1 year | 12 | — | — | — | 12 | — | ||||||||||||||||||
Between 1 and 5 years | 298 | 17 | — | — | 298 | 17 | ||||||||||||||||||
More than 5 years | 273 | 26 | 4 | 1 | 277 | 27 | ||||||||||||||||||
Subtotal | 583 | 43 | 4 | 1 | 587 | 44 | ||||||||||||||||||
Non-fixed-term securities | 539 | 39 | 4 | 1 | 543 | 40 | ||||||||||||||||||
Total | 1,122 | 82 | 8 | 2 | 1,130 | 84 | ||||||||||||||||||
F-50
Table of Contents
Authorized Capital |
(18) | Additional Paid-in Capital |
December 31, | ||||||||||||
€ in millions | 2004 | 2003 | 2002 | |||||||||
Legal reserves | 45 | 45 | 45 | |||||||||
Other retained earnings | 19,958 | 16,931 | 13,427 | |||||||||
Total | 20,003 | 16,976 | 13,472 | |||||||||
F-51
Table of Contents
December 31, 2004 | December 31, 2003 | December 31, 2002 | ||||||||||||||||||||||||||||||||||
Tax | Tax | Tax | ||||||||||||||||||||||||||||||||||
benefit/ | benefit/ | benefit/ | ||||||||||||||||||||||||||||||||||
€ in millions | Before tax | (expense) | Net-of-tax | Before tax | (expense) | Net-of-tax | Before tax | (expense) | Net-of-tax | |||||||||||||||||||||||||||
Foreign currency translation adjustments | 139 | (25 | ) | 114 | (701 | ) | (152 | ) | (853 | ) | (438 | ) | (55 | ) | (493 | ) | ||||||||||||||||||||
Plus (Less): reclassification adjustments affecting income | 11 | — | 11 | 71 | 3 | 74 | (125 | ) | — | (125 | ) | |||||||||||||||||||||||||
Unrealized holding gains/(losses) arising during period | 1,349 | (243 | ) | 1,106 | 1,282 | (35 | ) | 1,247 | (514 | ) | (20 | ) | (534 | ) | ||||||||||||||||||||||
Plus (Less): reclassification adjustments affecting income | (107 | ) | (5 | ) | (112 | ) | (74 | ) | 14 | (60 | ) | 1,355 | (559 | ) | 796 | |||||||||||||||||||||
Additional minimum pension liability | (935 | ) | 337 | (598 | ) | (156 | ) | 65 | (91 | ) | (116 | ) | 35 | (81 | ) | |||||||||||||||||||||
Cash flow hedges | 89 | (33 | ) | 56 | 224 | (89 | ) | 135 | (129 | ) | 65 | (64 | ) | |||||||||||||||||||||||
Total | 546 | 31 | 577 | 646 | (194 | ) | 452 | 33 | (534 | ) | (501 | ) | ||||||||||||||||||||||||
December 31, | ||||||||
€ in millions | 2004 | 2003 | ||||||
Central Europe | 2,096 | 2,208 | ||||||
Pan-European Gas | 126 | 185 | ||||||
U.K. | 92 | 122 | ||||||
Nordic | 1,668 | 1,656 | ||||||
U.S. Midwest | 103 | 109 | ||||||
Corporate Center | 36 | (19 | ) | |||||
Core energy business | 4,121 | 4,261 | ||||||
Other activities | 23 | 364 | ||||||
Total | 4,144 | 4,625 | ||||||
(22) | Provisions for Pensions |
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Changes in Projected Benefit Obligations | ||||||||
€ in millions | 2004 | 2003 | ||||||
Balance as of January 1 | 13,295 | 15,816 | ||||||
Service cost | 215 | 176 | ||||||
Interest cost | 804 | 724 | ||||||
Change in scope of consolidation | 1,397 | (2,816 | ) | |||||
Prior service cost | 6 | 22 | ||||||
Actuarial gains(-)/losses | 1,182 | 669 | ||||||
Exchange rate differences | (144 | ) | (539 | ) | ||||
Other | 6 | (3 | ) | |||||
Pensions paid | (843 | ) | (754 | ) | ||||
Balance as of December 31 | 15,918 | 13,295 | ||||||
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Changes in Plan Assets | ||||||||
€ in millions | 2004 | 2003 | ||||||
Balance as of January 1 | 4,922 | 5,477 | ||||||
Actual return on plan assets | 601 | 660 | ||||||
Company contributions | 182 | 229 | ||||||
Employee contributions | 16 | 15 | ||||||
Change in scope of consolidation | 1,220 | (683 | ) | |||||
Exchange rate differences | (97 | ) | (401 | ) | ||||
Pensions paid | (439 | ) | (365 | ) | ||||
Other | (6 | ) | (10 | ) | ||||
Balance as of December 31 | 6,399 | 4,922 | ||||||
December 31, | ||||||||||||
Target | ||||||||||||
in % | Allocation | 2004 | 2003 | |||||||||
Equity securities | 45 | 51 | 53 | |||||||||
Debt securities | 49 | 42 | 40 | |||||||||
Real estate | 5 | 5 | 6 | |||||||||
Other | 1 | 2 | 1 |
December 31, | ||||||||
€ in millions | 2004 | 2003 | ||||||
Funded status | 9,519 | 8,373 | ||||||
Unrecognized actuarial loss | (2,453 | ) | (1,518 | ) | ||||
Unrecognized prior service cost | (27 | ) | (42 | ) | ||||
Unfunded accrued benefit cost | 7,039 | 6,813 | ||||||
Additional minimum liability | 1,550 | 629 | ||||||
Provisions for pensions | 8,589 | 7,442 | ||||||
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€ in millions | 2004 | 2003 | 2002 | |||||||||
Employer service cost | 199 | 161 | 173 | |||||||||
Interest cost | 804 | 724 | 688 | |||||||||
Expected return on plan assets | (426 | ) | (331 | ) | (238 | ) | ||||||
Prior service cost | 24 | 21 | 17 | |||||||||
Net amortization of (gains)/losses | 42 | 25 | 45 | |||||||||
Total | 643 | 600 | 685 | |||||||||
€ in millions | ||||
2005 | 814 | |||
2006 | 837 | |||
2007 | 859 | |||
2008 | 882 | |||
2009 | 906 | |||
2010 – 2014 | 4,835 | |||
Total | 9,133 | |||
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December 31, 2004 | December 31, 2003 | |||||||||||||||||||||||
United | United | United | United | |||||||||||||||||||||
in % | Germany | Kingdom | States | Germany | Kingdom | States | ||||||||||||||||||
Discount rate | 4.75 | 5.30 | 5.75 | 5.50 | 5.50 | 6.25 | ||||||||||||||||||
Salary increase rate | 2.75 | 4.00 | 4.50 | 2.75 | 4.00 | 3.00 | ||||||||||||||||||
Expected return on plan assets | 4.75 | 6.70 | 8.25 | 5.50 | 6.70 | 8.50 | ||||||||||||||||||
Pension increase rate | 1.25 | 2.80 | — | 1.25 | 2.50 | — |
• | retirement costs shown in sub-items 1ab) and 1ba) for decommissioning of nuclear power plants in Germany in the amount of€8,204 million (2003:€8,106 million) and in Sweden in the amount of€404 million (2003:€385 million), | |
• | environmental improvement measures reported under sub-item 8) related to the locations of non-nuclear power plants, including removal of electricity transmission and distribution equipment in the amount of€327 million (2003:€377 million), and | |
• | environmental improvements at gas storage facilities in the amount of€77 million (2003:€76 million) and at opencast mining facilities in the amount of€59 million (2003:€55 million), as well as the decommissioning of oil and gas field infrastructure in the amount of€17 million (2003:€10 million). These obligations are also reported under sub-item 8). |
€ in millions | 2004 | 2003 | ||||||
Balance as of January 1 | 9,009 | 8,638 | ||||||
Liabilities incurred in the current period | 11 | 18 | ||||||
Liabilities settled in the current period | (164 | ) | (104 | ) | ||||
Change in scope of consolidation | 2 | 76 | ||||||
Accretion expense | 499 | 486 | ||||||
Revision in estimated cash flows | (272 | ) | (97 | ) | ||||
Other changes | 3 | (8 | ) | |||||
Balance as of December 31 | 9,088 | 9,009 | ||||||
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December 31, | |||||||||
€ in millions | 2004 | 2003 | |||||||
Provisions for nuclear waste management(1) | 13,481 | 13,758 | |||||||
Disposal of nuclear fuel rods | 5,370 | 5,710 | |||||||
Asset retirement obligation (SFAS 143) | 8,608 | 8,491 | |||||||
Waste disposal | 378 | 408 | |||||||
less: advance payments | (875 | ) | (851 | ) | |||||
Provisions for taxes(2) | 2,871 | 2,827 | |||||||
Provisions for personnel costs(3) | 1,611 | 1,568 | |||||||
Provisions for supplier-related contracts(4) | 2,818 | 2,740 | |||||||
Provisions for customer-related contracts(5) | 439 | 1,295 | |||||||
U.S. regulatory liabilities(6) | 415 | 462 | |||||||
Provisions for environmental remediation(7) | 337 | 332 | |||||||
Provisions for environmental improvements, including land reclamation(8) | 1,657 | 1,693 | |||||||
Miscellaneous(9) | 2,024 | 2,211 | |||||||
Total | 25,653 | 26,886 | |||||||
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aa) | Management of Spent Nuclear Fuel Rods |
• | the costs of transporting spent fuel to the reprocessing firms, | |
• | the costs of fuel reprocessing, as well as | |
• | the costs of outbound transportation and the intermediate storage of nuclear waste. |
• | contractual costs for procuring intermediate containers and intermediate on-site storage on the plant premises, and | |
• | costs of transporting spent fuel rods to conditioning facilities, conditioning costs, and costs for procuring permanent storage containers as determined by external studies. |
ab) | Nuclear Plant Decommissioning |
ac) | Waste from Plant Operations |
b) | Sweden |
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ba) | Decommissioning |
bb) | Nuclear Fuel Rods and Nuclear Waste in Sweden |
c) | United Kingdom and United States |
6) | U.S. Regulatory Liabilities |
7) | Environmental Remediation |
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8) | Environmental Improvements and Similar Liabilities, including Land Reclamation |
9) | Miscellaneous |
(24) | Liabilities |
December 31, 2004 | December 31, 2003 | ||||||||||||||||||||||||||||||||||||||||
With a remaining | With a remaining | ||||||||||||||||||||||||||||||||||||||||
term of | term of | ||||||||||||||||||||||||||||||||||||||||
Average | Average | ||||||||||||||||||||||||||||||||||||||||
interest rate | interest rate | ||||||||||||||||||||||||||||||||||||||||
up to | 1 to 5 | over | up to 1 year | up to | 1 to 5 | over | up to 1 year | ||||||||||||||||||||||||||||||||||
€ in millions | Total | 1 year | years | 5 years | (in %) | Total | 1 year | years | 5 years | (in %) | |||||||||||||||||||||||||||||||
Bonds (including Medium Term Note programs) | 9,148 | 355 | 5,306 | 3,487 | 2.4 | 11,506 | 1,400 | 1,469 | 8,637 | 5.4 | |||||||||||||||||||||||||||||||
Commercial paper | 3,631 | 3,631 | — | — | 2.1 | 2,168 | 2,168 | — | — | 2.5 | |||||||||||||||||||||||||||||||
Bank loans/ Liabilities to banks | 4,130 | 1,010 | 1,506 | 1,614 | 3.7 | 4,917 | 1,283 | 1,633 | 2,001 | 3.9 | |||||||||||||||||||||||||||||||
Bills payable | 51 | 3 | 48 | — | 2.6 | 71 | — | 3 | 68 | 3.6 | |||||||||||||||||||||||||||||||
Other financial liabilities | 1,648 | 155 | 547 | 946 | 4.4 | 1,332 | 340 | 228 | 764 | 4.2 | |||||||||||||||||||||||||||||||
Financial liabilities to banks and third parties | 18,608 | 5,154 | 7,407 | 6,047 | 19,994 | 5,191 | 3,333 | 11,470 | |||||||||||||||||||||||||||||||||
Financial liabilities to affiliated companies | 134 | 128 | — | 6 | 2.5 | 231 | 225 | 1 | 5 | 2.3 | |||||||||||||||||||||||||||||||
Liabilities to associated companies and other share investments | 1,834 | 1,754 | 20 | 60 | 3.5 | 1,925 | 1,850 | 12 | 63 | 2.0 | |||||||||||||||||||||||||||||||
Financial liabilities to Group companies | 1,968 | 1,882 | 20 | 66 | 2,156 | 2,075 | 13 | 68 | |||||||||||||||||||||||||||||||||
Financial liabilities | 20,576 | 7,036 | 7,427 | 6,113 | 22,150 | 7,266 | 3,346 | 11,538 | |||||||||||||||||||||||||||||||||
Accounts payable | 3,662 | 3,627 | 35 | — | 3,778 | 3,768 | 10 | — | |||||||||||||||||||||||||||||||||
Liabilities to affiliated companies | 147 | 103 | — | 44 | 77 | 39 | — | 38 | |||||||||||||||||||||||||||||||||
Liabilities to associated companies and other share investments | 184 | 92 | 71 | 21 | 239 | 170 | 55 | 14 | |||||||||||||||||||||||||||||||||
Capital expenditure grants | 271 | 26 | 93 | 152 | 285 | 22 | 78 | 185 | |||||||||||||||||||||||||||||||||
Construction grants from energy consumers | 3,558 | 347 | 692 | 2,519 | 3,516 | 162 | 639 | 2,715 | |||||||||||||||||||||||||||||||||
Advance payments | 725 | 722 | 3 | — | 695 | 670 | 25 | — | |||||||||||||||||||||||||||||||||
Other | 5,507 | 3,793 | 323 | 1,391 | 5,313 | 3,811 | 125 | 1,377 | |||||||||||||||||||||||||||||||||
thereof taxes | 989 | 989 | — | — | 781 | 781 | — | — | |||||||||||||||||||||||||||||||||
thereof social security contributions | 62 | 62 | — | — | 55 | 55 | — | — | |||||||||||||||||||||||||||||||||
Operating liabilities | 14,054 | 8,710 | 1,217 | 4,127 | 13,903 | 8,642 | 932 | 4,329 | |||||||||||||||||||||||||||||||||
Liabilities | 34,630 | 15,746 | 8,644 | 10,240 | 36,053 | 15,908 | 4,278 | 15,867 | |||||||||||||||||||||||||||||||||
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• | the repayment of the affected financing arrangement | |
• | the declaration that a liability becomes due and payable before its stated maturity | |
• | the triggering of cross defaults in other financing arrangements | |
• | E.ON’s access to additional financing on favorable terms being severely curtailed or even eliminated |
• | €4.25 billion issued by E.ON International Finance with a coupon of 5.75 percent and a maturity in May 2009 | |
• | €0.9 billion issued by E.ON International Finance with a coupon of 6.375 percent and a maturity in May 2017 |
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• | GBP 500 million or€704 million issued by E.ON International Finance with a coupon of 6.375 percent and a maturity in May 2012 | |
• | GBP 0.975 billion or€1.37 billion issued by E.ON International Finance with a coupon of 6.375 percent and a maturity in June 2032 |
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• | GBP 250 million or€352 million bond issued by E.ON UK plc with a coupon of 8.5 percent maturing in July 2006, of which GBP 44 million or€62 million was held by external investors | |
• | GBP 250 million or€352 million bond issued by E.ON UK plc with a coupon of 6.25 percent maturing in April 2024, of which GBP 8 million or€11 million was held by external investors | |
• | GBP 150 million or€211 million issued by Central Networks plc (previously Midlands Electricity plc, a wholly-owned subsidiary of E.ON UK plc) with a coupon of 7.375 percent maturing in November 2007 (part of the Midlands Debt), of which GBP 1 million or approximately€1 million was held by external investors | |
• | €500 million Eurobond issued by E.ON UK plc with a coupon of 5.0 percent maturing in July 2009, of which€264 million was held by external investors | |
• | USD 410 million or€301 million Yankee Bond issued by Powergen (East Midlands) Investments, London, U.K., with a coupon of 7.45 percent maturing in May 2007, of which USD 173 million or€127 million was held by external investors |
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Repayment | Repayment | Repayment | Repayment | Repayment | Repayment | |||||||||||||||||||||||
€ in millions | 2005 | 2006 | 2007 | 2008 | 2009 | after 2009 | Total | |||||||||||||||||||||
Bonds (including MTN programs) | 355 | 448 | 202 | 134 | 4,522 | 3,487 | 9,148 | |||||||||||||||||||||
Commercial paper | 3,631 | — | — | — | — | — | 3,631 | |||||||||||||||||||||
Bank loans/ Liabilities due to banks | 1,010 | 474 | 410 | 195 | 427 | 1,614 | 4,130 | |||||||||||||||||||||
Bills payable | 3 | — | 48 | — | — | — | 51 | |||||||||||||||||||||
Other financial liabilities | 155 | 170 | 126 | 130 | 121 | 946 | 1,648 | |||||||||||||||||||||
Financial liabilities to banks and third parties | 5,154 | 1,092 | 786 | 459 | 5,070 | 6,047 | 18,608 | |||||||||||||||||||||
Used credit lines | 315 | 11 | 3 | — | — | 69 | 398 | |||||||||||||||||||||
Unused credit lines | 5,834 | 1 | 5 | 10 | 5,005 | 136 | 10,991 | |||||||||||||||||||||
Used and unused credit lines | 6,149 | 12 | 8 | 10 | 5,005 | 205 | 11,389 | |||||||||||||||||||||
December 31, 2004 | ||||||||||||||||||||
€ in millions | 0 - 3% | 3.1 - 7% | 7.1 - 10% | more than 10% | Total | |||||||||||||||
Bonds (including MTN programs) | 463 | 8,486 | 199 | — | 9,148 | |||||||||||||||
Commercial paper | 3,631 | — | — | — | 3,631 | |||||||||||||||
Bank loans/ Liabilities due to banks | 1,507 | 2,533 | 90 | — | 4,130 | |||||||||||||||
Bills payable | — | 51 | — | — | 51 | |||||||||||||||
Other financial liabilities | 285 | 1,338 | 5 | 20 | 1,648 | |||||||||||||||
Financial liabilities to banks and third parties | 5,886 | 12,408 | 294 | 20 | 18,608 | |||||||||||||||
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December 31, | ||||||||
€ in millions | 2004 | 2003 | ||||||
Bank loans collateralized by mortgages on real estate | 1,147 | 1,678 | ||||||
Other collateralized bank loans | 805 | 574 | ||||||
Uncollateralized bank loans, drawings on credit lines, short-term loans | 2,178 | 2,665 | ||||||
Total | 4,130 | 4,917 | ||||||
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€ in millions | Total | Less than 1 year | 1 - 3 years | 3 - 5 years | After 5 years | |||||||||||||||
Natural gas | 104,123 | 8,932 | 15,515 | 20,324 | 59,352 | |||||||||||||||
Oil | — | — | — | — | — | |||||||||||||||
Coal | 1,971 | 839 | 754 | 263 | 115 | |||||||||||||||
Lignite and other fossil fuels | 311 | 48 | 102 | 106 | 55 | |||||||||||||||
Total fossil fuel purchase obligations | 106,405 | 9,819 | 16,371 | 20,693 | 59,522 | |||||||||||||||
Electricity purchase obligations | 3,444 | 807 | 693 | 441 | 1,503 | |||||||||||||||
Other purchase obligations | 1,264 | 408 | 222 | 150 | 484 | |||||||||||||||
Total long term purchase commitments/obligations | 111,113 | 11,034 | 17,286 | 21,284 | 61,509 | |||||||||||||||
Major repairs | 6 | 6 | — | — | — | |||||||||||||||
Environmental protection measures | 18 | 1 | 2 | 1 | 14 | |||||||||||||||
Other (i.e. capital expenditure commitments) | 904 | 404 | 93 | 56 | 351 | |||||||||||||||
Total other purchase commitments/obligations | 928 | 411 | 95 | 57 | 365 | |||||||||||||||
Other financial liabilities | 4,093 | 509 | 2,885 | 641 | 58 | |||||||||||||||
Loan commitments | 8,325 | 323 | 116 | 4,387 | 3,499 | |||||||||||||||
Total | 124,459 | 12,277 | 20,382 | 26,369 | 65,431 | |||||||||||||||
€ in millions | ||||
2005 | 144 | |||
2006 | 129 | |||
2007 | 121 | |||
2008 | 113 | |||
2009 | 75 | |||
Thereafter | 765 | |||
Total | 1,347 | |||
(26) | Litigation and Claims |
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(27) | Supplemental Disclosure of Cash Flow Information |
€ in millions | 2004 | 2003 | 2002 | ||||||||||
Cash paid during the year for | |||||||||||||
Interest, net of amounts capitalized | 1,216 | 1,197 | 917 | ||||||||||
Income taxes, net of refunds | 1,241 | 1,064 | 1,170 | ||||||||||
Non-cash investing and financing activities | |||||||||||||
Increase of stakes in subsidiaries in exchange for distribution of E.ON AG shares to minority shareholders | 182 | 153 | — | ||||||||||
Purchase price payments for Deutschbau shares not due until subsequent years | 367 | — | — | ||||||||||
Exchange and contribution of assets as part of acquisitions | — | — | 167 |
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• | Currency, electricity, gas, oil and coal forward contracts, swaps, and emissions-related derivatives are valued separately at their forward rates and prices as of the balance sheet date. Forward rates and prices are based on spot rates and prices, with forward premiums and discounts taken into consideration. | |
• | Market prices for currency, electricity and gas options are valued using standard option pricing models commonly used in the market. The fair values of caps, floors, and collars are determined on the basis of quoted market prices or on calculations based on option pricing models. | |
• | The fair values of existing instruments to hedge interest rate risk are determined by discounting future cash flows using market interest rates over the remaining term of the instrument. Discounted cash values are determined for interest rate, cross-currency and cross-currency interest rate swaps for each individual transaction as of the balance-sheet date. Interest exchange amounts are considered with an effect on current results at the date of payment or accrual. | |
• | Equity swaps are valued on the basis of the stock prices of the underlying equities, taking into consideration any financing components. | |
• | Exchange-traded energy futures and option contracts are valued individually at daily settlement prices determined on the futures markets that are published by their respective clearing houses. Paid initial margins are disclosed under other assets. Variation margins received or paid during the term of such contracts are stated under other liabilities or other assets, respectively. |
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• | Certain long-term energy contracts are valued by the use of valuation models that include average probabilities and take into account individual contract details and variables. |
December 31, 2004 | December 31, 2003 | |||||||||||||||||
Total Volume of Foreign Currency, Interest Rate and | ||||||||||||||||||
Equity-Based Derivatives | Nominal | Fair | Nominal | Fair | ||||||||||||||
€ in millions | value | value | value | value | ||||||||||||||
FX forward transactions | ||||||||||||||||||
Buy | 4,238.2 | (41.3 | ) | 2,149.5 | (142.5 | ) | ||||||||||||
Sell | 5,328.6 | 134.2 | 4,789.8 | 174.6 | ||||||||||||||
FX currency options | ||||||||||||||||||
Buy | 782.7 | 46.7 | 425.4 | 14.6 | ||||||||||||||
Sell | 422.2 | (36.4 | ) | 17.5 | — | |||||||||||||
Subtotal | 10,771.7 | 103.2 | 7,382.2 | 46.7 | ||||||||||||||
Cross currency swaps | ||||||||||||||||||
up to 1 year | 499.1 | (7.0 | ) | 376.1 | (25.1 | ) | ||||||||||||
1 year to 5 years | 11,033.7 | 484.2 | 3,464.8 | 251.1 | ||||||||||||||
more than 5 years | 7,163.8 | 236.3 | 7,304.6 | 188.9 | ||||||||||||||
Interest rate/cross currency swaps | ||||||||||||||||||
up to 1 year | 102.3 | 1.4 | 51.1 | (0.7 | ) | |||||||||||||
1 year to 5 years | 125.0 | 12.1 | 227.3 | 17.4 | ||||||||||||||
more than 5 years | 297.4 | (38.5 | ) | 297.4 | (3.2 | ) | ||||||||||||
Subtotal | 19,221.3 | 688.5 | 11,721.3 | 428.4 | ||||||||||||||
Interest rate swaps | ||||||||||||||||||
Fixed-rate payer | ||||||||||||||||||
up to 1 year | 371.0 | (5.4 | ) | 315.1 | (2.6 | ) | ||||||||||||
1 year to 5 years | 2,092.5 | (107.9 | ) | 1,567.5 | (49.8 | ) | ||||||||||||
more than 5 years | 373.3 | (36.6 | ) | 1,283.9 | (64.4 | ) | ||||||||||||
Fixed-rate receiver | ||||||||||||||||||
up to 1 year | 23.3 | 0.3 | 47.6 | 0.4 | ||||||||||||||
1 year to 5 years | 3,914.0 | 100.6 | 99.7 | 8.9 | ||||||||||||||
more than 5 years | 147.0 | 4.5 | 1,450.1 | 83.7 | ||||||||||||||
Subtotal | 6,921.1 | (44.5 | ) | 4,763.9 | (23.8 | ) | ||||||||||||
Interest rate options | ||||||||||||||||||
Buy up to 1 year | 554.6 | (7.2 | ) | — | — | |||||||||||||
1 year to 5 years | — | — | 220.3 | 0.1 | ||||||||||||||
more than 5 years | — | — | — | — | ||||||||||||||
Sell up to 1 year | 110.9 | (2.0 | ) | — | — | |||||||||||||
1 year to 5 years | — | — | 220.3 | (4.0 | ) | |||||||||||||
more than 5 years | — | — | — | — | ||||||||||||||
Subtotal | 665.5 | (9.2 | ) | 440.6 | (3.9 | ) | ||||||||||||
Equity swaps | 63.8 | 103.0 | 76.5 | 158.3 | ||||||||||||||
Subtotal | 63.8 | 103.0 | 76.5 | 158.3 | ||||||||||||||
Total | 37,643.4 | 841.0 | 24,384.5 | 605.7 | ||||||||||||||
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Thereof Trading | |||||||||||||||||||||||||
December 31, | December 31, | December 31, | |||||||||||||||||||||||
2004 | 2004 | 2003 | |||||||||||||||||||||||
Total Volume of Electricity, Gas, Coal, Oil and Emissions Related Financial Derivatives | Nominal | Fair | Nominal | Fair | Nominal | Fair | |||||||||||||||||||
€ in millions | value | value | value | value | value | value | |||||||||||||||||||
Electricity forwards | |||||||||||||||||||||||||
up to 1 year | 7,521.9 | 41.6 | 6,537.0 | 9.7 | 7,514.0 | (167.5 | ) | ||||||||||||||||||
1 year to 3 years | 2,306.2 | (39.9 | ) | 1,866.8 | (19.9 | ) | 2,364.4 | (59.7 | ) | ||||||||||||||||
4 years to 5 years | 59.6 | (0.4 | ) | — | — | 153.8 | (7.0 | ) | |||||||||||||||||
more than 5 years | 7.5 | (1.0 | ) | — | — | 15.4 | (0.4 | ) | |||||||||||||||||
Subtotal | 9,895.2 | 0.3 | 8,403.8 | (10.2 | ) | 10,047.6 | (234.6 | ) | |||||||||||||||||
Electricity swaps | |||||||||||||||||||||||||
up to 1 year | 29.7 | 0.3 | 29.7 | 0.3 | 28.4 | 1.6 | |||||||||||||||||||
1 year to 3 years | 3.1 | (0.1 | ) | 3.1 | (0.1 | ) | 21.4 | 3.5 | |||||||||||||||||
4 years to 5 years | — | — | — | — | 10.0 | 0.0 | |||||||||||||||||||
more than 5 years | — | — | — | — | — | — | |||||||||||||||||||
Subtotal | 32.8 | 0.2 | 32.8 | 0.2 | 59.8 | 5.1 | |||||||||||||||||||
Electricity options | |||||||||||||||||||||||||
up to 1 year | 8.8 | (0.2 | ) | 8.0 | 0.0 | 49.3 | 0.2 | ||||||||||||||||||
1 year to 3 years | — | — | — | — | — | — | |||||||||||||||||||
4 years to 5 years | — | — | — | — | — | — | |||||||||||||||||||
more than 5 years | — | — | — | — | — | — | |||||||||||||||||||
Subtotal | 8.8 | (0.2 | ) | 8.0 | 0.0 | 49.3 | 0.2 | ||||||||||||||||||
Exchange traded electricity forwards | |||||||||||||||||||||||||
up to 1 year | 3,085.4 | (93.3 | ) | 2,053.8 | (30.6 | ) | 794.0 | (83.5 | ) | ||||||||||||||||
1 year to 3 years | 1,309.9 | (9.9 | ) | 696.8 | 7.1 | 858.1 | (42.5 | ) | |||||||||||||||||
4 years to 5 years | — | — | — | — | — | — | |||||||||||||||||||
more than 5 years | — | — | — | — | — | — | |||||||||||||||||||
Subtotal | 4,395.3 | (103.2 | ) | 2,750.6 | (23.5 | ) | 1,652.1 | (126.0 | ) | ||||||||||||||||
Exchange traded electricity options | |||||||||||||||||||||||||
up to 1 year | 64.9 | (1.5 | ) | 58.6 | (1.1 | ) | 101.5 | (1.5 | ) | ||||||||||||||||
1 year to 3 years | 132.6 | (1.6 | ) | 132.6 | (1.6 | ) | 6.2 | (4.4 | ) | ||||||||||||||||
4 years to 5 years | — | — | — | — | — | — | |||||||||||||||||||
more than 5 years | — | — | — | — | — | — | |||||||||||||||||||
Subtotal | 197.5 | (3.1 | ) | 191.2 | (2.7 | ) | 107.7 | (5.9 | ) | ||||||||||||||||
Coal forwards and swaps | |||||||||||||||||||||||||
up to 1 year | 1,541.6 | 26.8 | 844.5 | 1.5 | 269.2 | 3.4 | |||||||||||||||||||
1 year to 3 years | 851.2 | 18.3 | 283.6 | 2.2 | 129.2 | 13.9 | |||||||||||||||||||
4 years to 5 years | 112.0 | 1.1 | — | — | — | — | |||||||||||||||||||
more than 5 years | — | — | — | — | — | — | |||||||||||||||||||
Subtotal | 2,504.8 | 46.2 | 1,128.1 | 3.7 | 398.4 | 17.3 | |||||||||||||||||||
Oil derivatives | |||||||||||||||||||||||||
up to 1 year | 405.0 | 28.5 | 89.5 | 0.4 | 336.2 | 9.6 | |||||||||||||||||||
1 year to 3 years | 266.0 | 28.1 | — | — | 91.8 | 4.3 | |||||||||||||||||||
4 years to 5 years | 2.8 | 0.0 | — | — | — | — | |||||||||||||||||||
more than 5 years | — | — | — | — | — | — | |||||||||||||||||||
Subtotal | 673.8 | 56.6 | 89.5 | 0.4 | 428.0 | 13.9 | |||||||||||||||||||
Gas forwards | |||||||||||||||||||||||||
up to 1 year | 1,606.8 | 77.4 | 4.2 | 0.1 | 2,714.5 | 102.1 | |||||||||||||||||||
1 year to 3 years | 1,117.9 | 131.7 | 7.0 | 0.0 | 832.8 | 71.3 | |||||||||||||||||||
4 years to 5 years | 426.0 | 2.0 | — | — | 389.6 | 31.2 | |||||||||||||||||||
more than 5 years | — | — | — | — | 453.4 | 58.9 | |||||||||||||||||||
Subtotal | 3,150.7 | 211.1 | 11.2 | 0.1 | 4,390.3 | 263.5 | |||||||||||||||||||
Gas swaps | |||||||||||||||||||||||||
up to 1 year | 1,908.1 | 78.1 | 809.7 | 0.8 | 261.6 | 1.1 | |||||||||||||||||||
1 year to 3 years | 1,513.9 | 143.6 | 364.2 | 5.9 | 28.1 | 2.3 | |||||||||||||||||||
4 years to 5 years | 503.1 | (7.0 | ) | — | — | — | — | ||||||||||||||||||
more than 5 years | 373.8 | (24.2 | ) | — | — | — | — | ||||||||||||||||||
Subtotal | 4,298.9 | 190.5 | 1,173.9 | 6.7 | 289.7 | 3.4 | |||||||||||||||||||
Gas options | |||||||||||||||||||||||||
up to 1 year | 34.1 | (7.6 | ) | — | — | 419.3 | (10.6 | ) | |||||||||||||||||
1 year to 3 years | 24.5 | (7.7 | ) | — | — | 502.1 | (4.7 | ) | |||||||||||||||||
4 years to 5 years | — | — | — | �� | — | 56.4 | 5.7 | ||||||||||||||||||
more than 5 years | — | — | — | — | — | — | |||||||||||||||||||
Subtotal | 58.6 | (15.3 | ) | — | — | 977.8 | (9.6 | ) | |||||||||||||||||
Emissions related derivatives | |||||||||||||||||||||||||
up to 1 year | 28.8 | (0.5 | ) | 11.3 | 0.1 | — | — | ||||||||||||||||||
1 year to 3 years | 5.9 | (0.1 | ) | — | — | — | — | ||||||||||||||||||
4 years to 5 years | — | — | — | — | — | — | |||||||||||||||||||
more than 5 years | — | — | — | — | — | — | |||||||||||||||||||
Subtotal | 34.7 | (0.6 | ) | 11.3 | 0.1 | — | — | ||||||||||||||||||
Total | 25,251.1 | 382.5 | 13,800.4 | (25.2 | ) | 18,400.7 | (72.7 | ) | |||||||||||||||||
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December 31, 2004 | ||||||||||||||||||||||||||||||||
Total | Up to 1 Year | 1 to 5 Years | More than 5 Years | |||||||||||||||||||||||||||||
Rating of Counterparties | Counter- | Counter- | Counter- | Counter- | ||||||||||||||||||||||||||||
Standard & Poor’s and/or Moody’s | Nominal | party | Nominal | party | Nominal | party | Nominal | party | ||||||||||||||||||||||||
€ in millions | Value | Risk | Value | Risk | Value | Risk | Value | Risk | ||||||||||||||||||||||||
AAA and Aaa through AA- and Aa3 | 27,387.9 | 1,783.8 | 9,421.2 | 347.7 | 12,089.9 | 686.3 | 5,876.8 | 749.8 | ||||||||||||||||||||||||
AA- and A1 or A+ and Aa3 through A- and A3 | 18,960.4 | 583.8 | 8,254.7 | 202.5 | 9,192.6 | 324.3 | 1,513.1 | 57.0 | ||||||||||||||||||||||||
A- and Baa1 or BBB+ and A3 through BBB- or Baa3 | 2,707.0 | 142.8 | 1,414.1 | 74.1 | 973.8 | 42.5 | 319.1 | 26.2 | ||||||||||||||||||||||||
BBB- and Ba1 or BB+ and Baa3 through BB- and Ba3 | 522.7 | 22.3 | 380.5 | 17.2 | 142.2 | 5.1 | — | — | ||||||||||||||||||||||||
Other(1) | 8,723.6 | 467.6 | 5,009.9 | 280.1 | 3,059.8 | 127.7 | 653.9 | 59.8 | ||||||||||||||||||||||||
Total | 58,301.6 | 3,000.3 | 24,480.4 | 921.6 | 25,458.3 | 1,185.9 | 8,362.9 | 892.8 | ||||||||||||||||||||||||
(1) | This position consists primarily of parties to contracts with respect to which E.ON has received collateral from counterparties with ratings of the above categories or with an equivalent internal rating. |
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December 31, 2004 | December 31, 2003 | ||||||||||||||||
€ in millions | Book value | Fair value | Book value | Fair value | |||||||||||||
Assets | |||||||||||||||||
Loans | 1,438 | 1,477 | 1,785 | 1,787 | |||||||||||||
Securities | 8,617 | 8,617 | 7,969 | 7,969 | |||||||||||||
Financial receivables and other financial assets | 2,124 | 2,124 | 2,192 | 2,192 | |||||||||||||
Liquid funds | 4,233 | 4,233 | 3,807 | 3,807 | |||||||||||||
Total | 16,412 | 16,451 | 15,753 | 15,755 | |||||||||||||
Liabilities | |||||||||||||||||
Financial liabilities | 20,301 | 21,168 | 21,787 | 22,498 | |||||||||||||
€ in millions | 2004 | 2003 | ||||||
Income | 4,846 | 4,736 | ||||||
Expenses | 2,530 | 2,402 | ||||||
Receivables | 1,686 | 1,999 | ||||||
Liabilities | 1,973 | 2,353 |
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• | The Central Europe market unit, led by E.ON Energie AG, Munich, Germany, focuses on E.ON’s integrated electricity business and the downstream gas business in central Europe. | |
• | Pan-European Gas is responsible for the upstream and midstream gas business. Additionally, this market unit holds a number of minority shareholdings in the downstream gas business. The lead company of this market unit is E.ON Ruhrgas AG, Essen, Germany. | |
• | The U.K. market unit encompasses the integrated energy business in the United Kingdom. This market unit is led by E.ON UK plc., Coventry, U.K. | |
• | The Nordic market unit, which is led by E.ON Nordic AB, Malmö, Sweden, focuses on the integrated energy business in Northern Europe. | |
• | The U.S. Midwest market unit, led by LG&E Energy LLC, Louisville, Kentucky, U.S., is primarily active in the regulated energy market in the U.S. state of Kentucky. | |
• | The Corporate Center contains the interests managed directly by E.ON AG, E.ON AG itself, and consolidation effects at the Group level. |
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€ in millions | 2004 | 2003 | 2002 | |||||||||
Adjusted EBIT | 7,361 | 6,228 | 4,649 | |||||||||
Adjusted interest income (net) | (1,140 | ) | (1,663 | ) | (832 | ) | ||||||
Net book gains | 589 | 1,257 | 1,071 | |||||||||
Cost-management and restructuring expenses | (108 | ) | (479 | ) | (331 | ) | ||||||
Other non-operating earnings | 97 | 195 | (5,316 | ) | ||||||||
Income/(Loss) from continuing operations before income taxes and minority interests | 6,799 | 5,538 | (759 | ) | ||||||||
Income taxes | (1,947 | ) | (1,124 | ) | 662 | |||||||
Minority interests | (504 | ) | (464 | ) | (623 | ) | ||||||
Income/(Loss) from continuing operations | 4,348 | 3,950 | (720 | ) | ||||||||
Income/(Loss) from discontinued operations, net | (9 | ) | 1,137 | 3,306 | ||||||||
Cumulative effect of changes in accounting principles, net | — | (440 | ) | 191 | ||||||||
Net income | 4,339 | 4,647 | 2,777 | |||||||||
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Central Europe | Pan-European Gas | U.K. | Nordic | ||||||||||||||||||||||||||||||||||||||||||||||
€ in millions | 2004 | 2003 | 2002 | 2004 | 2003 | 2002(1) | 2004 | 2003 | 2002 | 2004 | 2003 | 2002 | |||||||||||||||||||||||||||||||||||||
External sales | 20,540 | 18,983 | 16,068 | 13,859 | 12,573 | 549 | 8,480 | 7,915 | 3,162 | 3,281 | 2,776 | 2,490 | |||||||||||||||||||||||||||||||||||||
Intersegment sales | 212 | 270 | 272 | 567 | 400 | 18 | 10 | 8 | — | 66 | 48 | 81 | |||||||||||||||||||||||||||||||||||||
Total sales | 20,752 | 19,253 | 16,340 | 14,426 | 12,973 | 567 | 8,490 | 7,923 | 3,162 | 3,347 | 2,824 | 2,571 | |||||||||||||||||||||||||||||||||||||
Depreciation and amortization | (1,121 | ) | (1,447 | ) | (1,239 | ) | (378 | ) | (429 | ) | (28 | ) | (575 | ) | (426 | ) | (196 | ) | (420 | ) | (386 | ) | (322 | ) | |||||||||||||||||||||||||
Impairments(2) | (185 | ) | (45 | ) | (6 | ) | (94 | ) | (4 | ) | — | — | — | — | — | (1 | ) | — | |||||||||||||||||||||||||||||||
Adjusted EBIT | 3,602 | 2,979 | 2,281 | 1,428 | 1,463 | 308 | 1,017 | 610 | 176 | 701 | 546 | 480 | |||||||||||||||||||||||||||||||||||||
Thereof: earnings from companies accounted for at equity(3) | 143 | 290 | 269 | 419 | 406 | 143 | 43 | 36 | 16 | 10 | 21 | 40 | |||||||||||||||||||||||||||||||||||||
Investments | 2,527 | 2,126 | 5,508 | 660 | 667 | 435 | 503 | 388 | 2,672 | 740 | 1,265 | 956 | |||||||||||||||||||||||||||||||||||||
Intangible assets and property plant and equipment | 1,388 | 1,255 | 1,148 | 145 | 214 | 38 | 511 | 322 | 149 | 350 | 369 | 434 | |||||||||||||||||||||||||||||||||||||
Financial assets | 1,139 | 871 | 4,360 | 515 | 453 | 397 | (8 | ) | 66 | 2,523 | 390 | 896 | 522 | ||||||||||||||||||||||||||||||||||||
Total assets | 55,537 | 54,808 | 45,477 | 22,720 | 22,928 | 3,269 | 14,986 | 12,610 | 14,153 | 11,289 | 10,662 | 10,998 | |||||||||||||||||||||||||||||||||||||
U.S. Midwest | Corporate Center | Core Energy Business | Other Activities | ||||||||||||||||||||||||||||||||||||||||||||||
€ in millions | 2004 | 2003 | 2002 | 2004 | 2003 | 2002 | 2004 | 2003 | 2002 | 2004 | 2003 | 2002 | |||||||||||||||||||||||||||||||||||||
External sales | 1,913 | 1,971 | 1,260 | 52 | 141 | 146 | 48,125 | 44,359 | 23,675 | 978 | 2,068 | 12,949 | |||||||||||||||||||||||||||||||||||||
Intersegment sales | — | — | — | (865 | ) | (737 | ) | (401 | ) | (10 | ) | (11 | ) | (30 | ) | 10 | 11 | 30 | |||||||||||||||||||||||||||||||
Total sales | 1,913 | 1,971 | 1,260 | (813 | ) | (596 | ) | (255 | ) | 48,115 | 44,348 | 23,645 | 988 | 2,079 | 12,979 | ||||||||||||||||||||||||||||||||||
Depreciation and amortization | (195 | ) | (200 | ) | (112 | ) | (23 | ) | (20 | ) | (23 | ) | (2,712 | ) | (2,908 | ) | (1,920 | ) | (139 | ) | (209 | ) | (974 | ) | |||||||||||||||||||||||||
Impairments(2) | — | — | — | (18 | ) | (26 | ) | — | (297 | ) | (76 | ) | (6 | ) | (11 | ) | (37 | ) | (9 | ) | |||||||||||||||||||||||||||||
Adjusted EBIT | 349 | 317 | 241 | (314 | ) | (319 | ) | (160 | ) | 6,783 | 5,596 | 3,326 | 578 | 632 | 1,323 | ||||||||||||||||||||||||||||||||||
Thereof: earnings from companies accounted for at equity(3) | 17 | 17 | 29 | (42 | ) | 33 | 56 | 590 | 803 | 553 | 107 | 105 | 40 | ||||||||||||||||||||||||||||||||||||
Investments | 277 | 443 | 399 | 434 | 4,147 | 12,697 | 5,141 | 9,036 | 22,667 | 144 | 160 | 1,492 | |||||||||||||||||||||||||||||||||||||
Intangible assets and property plant and equipment | 277 | 443 | 399 | 11 | (53 | ) | (61 | ) | 2,682 | 2,550 | 2,107 | 30 | 110 | 1,103 | |||||||||||||||||||||||||||||||||||
Financial assets | — | — | — | 423 | 4,200 | 12,758 | 2,459 | 6,486 | 20,560 | 114 | 50 | 389 | |||||||||||||||||||||||||||||||||||||
Total assets | 7,643 | 8,367 | 9,111 | (3,672 | ) | (3,656 | ) | 8,496 | 108,503 | 105,719 | 91,504 | 5,559 | 6,131 | 21,999 | |||||||||||||||||||||||||||||||||||
E.ON Group | |||||||||||||
€ in millions | 2004 | 2003 | 2002 | ||||||||||
External sales | 49,103 | 46,427 | 36,624 | ||||||||||
Intersegment sales | — | — | — | ||||||||||
Total sales | 49,103 | 46,427 | 36,624 | ||||||||||
Depreciation and amortization | (2,851 | ) | (3,117 | ) | (2,894 | ) | |||||||
Impairments(2) | (308 | ) | (113 | ) | (15 | ) | |||||||
Adjusted EBIT | 7,361 | 6,228 | 4,649 | ||||||||||
Thereof: earnings from companies accounted for at equity(3) | 697 | 908 | 593 | ||||||||||
Investments | 5,285 | 9,196 | 24,159 | ||||||||||
Intangible assets and property plant and equipment | 2,712 | 2,660 | 3,210 | ||||||||||
Financial assets | 2,573 | 6,536 | 20,949 | ||||||||||
Total assets | 114,062 | 111,850 | 113,503 | ||||||||||
(1) | Includes only the 2002 results of those entities transferred from Central Europe to Pan-European Gas during 2004 and 2003. |
(2) | For all periods presented, the impairment charges included in adjusted EBIT deviated from the values reported in accordance with U.S. GAAP. In 2004, the deviation was due to impairment charges on real |
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property and on a municipal utility investment at the Central Europe market unit, as well as to an impairment charge recorded for an Asian power plant investment at the UK market unit, all of which are included in non- operating earnings. In 2003, the deviation was due to the impairment charge on an Asian power plant investment at the UK market unit, which was also included in non-operating earnings. Deviations in 2002 were due primarily to the goodwill stemming from the E.ON UK acquisition and the valuation allowance on the HypoVereinsbank shares, all of which were also recorded in non-operating earnings. | |
(3) | For all periods presented, earnings contributing to adjusted EBIT from companies accounted for at equity deviated from earnings from companies accounted for at equity in accordance with U.S. GAAP. In 2004, this deviation was the result of the impairment charge on a municipal utility investment at the Central Europe market unit and of an impairment charge on an Asian power plant investment at the UK market unit, all of which are included in non- operating earnings. In 2003, the deviation was due to the reclassification of at equity earnings from RAG in other non-operating earnings and to the impairment charge on the UK market unit’s Asian power plant investment, which was recorded in other non-operating earnings. In 2002, the deviation resulted from the book gain on the disposal of Schmalbach-Lubeca and the sale of the STEAG interest, both of which were recorded in other non-operating earnings. |
€ in millions | 2004 | 2003 | 2002 | |||||||||
Interest and similar expenses (net) as shown in Note 6 | (1,141 | ) | (1,107 | ) | (372 | ) | ||||||
(+) Non-operating interest income (net)(1) | 138 | (62 | ) | 164 | ||||||||
(-) Interest portion of long-term provisions | 137 | 494 | 624 | |||||||||
Adjusted interest income (net) | (1,140 | ) | (1,663 | ) | (832 | ) | ||||||
(1) | This figure is calculated by adding interest expenses and subtracting interest income. |
Europe (Eurozone | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Germany | excluding Germany) | Europe (other) | United States | Other | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
€ in millions | 2004 | 2003 | 2002 | 2004 | 2003 | 2002 | 2004 | 2003 | 2002 | 2004 | 2003 | 2002 | 2004 | 2003 | 2002 | 2004 | 2003 | 2002 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
External sales | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
by location of customer | 29,775 | 28,281 | 20,215 | 2,354 | 2,404 | 3,190 | 14,303 | 12,554 | 6,705 | 2,322 | 2,619 | 3,884 | 349 | 569 | 2,630 | 49,103 | 46,427 | 36,624 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
by location of company | 31,388 | 29,832 | 22,825 | 1,656 | 1,697 | 1,985 | 13,608 | 11,936 | 6,300 | 2,293 | 2,689 | 4,027 | 158 | 273 | 1,487 | 49,103 | 46,427 | 36,624 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, plant and equipment | 23,171 | 23,418 | 23,463 | 1,283 | 1,331 | 1,379 | 15,327 | 13,898 | 11,708 | 3,693 | 4,044 | 5,379 | 89 | 106 | 498 | 43,563 | 42,797 | 42,427 |
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Fixed | Variable | Compensation for | |||||||||||||||
compensation for | compensation for | Supervisory Board | |||||||||||||||
service on E.ON’s | service on E.ON’s | memberships at | |||||||||||||||
Name | Supervisory Board | Supervisory Board | affiliated companies | Total | |||||||||||||
(€) | |||||||||||||||||
Ulrich Hartmann | 30,000 | 323,925 | 0 | 353,925 | |||||||||||||
Hubertus Schmoldt | 20,000 | 215,950 | 0 | 235,950 | |||||||||||||
Günter Adam | 10,000 | 107,975 | 0 | 117,975 | |||||||||||||
Dr. Karl-Hermann Baumann | 20,000 | 215,950 | 0 | 235,950 | |||||||||||||
Ralf Blauth | 15,000 | 161,963 | 0 | 176,963 | |||||||||||||
Dr. Rolf-E. Breuer | 10,000 | 107,975 | 0 | 117,975 | |||||||||||||
Dr. Gerhard Cromme | 15,000 | 161,963 | 0 | 176,963 | |||||||||||||
Wolf Rüdiger Hinrichsen | 15,000 | 161,963 | 0 | 176,963 | |||||||||||||
Ulrich Hocker | 10,000 | 107,975 | 0 | 117,975 | |||||||||||||
Eva Kirchhof | 10,000 | 107,975 | 0 | 117,975 | |||||||||||||
Seppel Kraus | 10,000 | 107,975 | 0 | 117,975 | |||||||||||||
Prof. Dr. Ulrich Lehner | 10,000 | 107,975 | 0 | 117,975 | |||||||||||||
Dr. Klaus Liesen | 10,000 | 107,975 | 0 | 117,975 | |||||||||||||
Peter Obramski | 10,000 | 107,975 | 0 | 117,975 | |||||||||||||
Ulrich Otte | 10,000 | 107,975 | 66,700 | 184,675 | |||||||||||||
Klaus-Dieter Raschke | 15,000 | 161,963 | 44,778 | 221,741 | |||||||||||||
Dr. Henning Schulte-Noelle | 15,000 | 161,963 | 0 | 176,963 | |||||||||||||
Prof. Dr. Wilhelm Simson | 10,000 | 107,975 | 0 | 117,975 | |||||||||||||
Gerhard Skupke | 10,000 | 107,975 | 14,250 | 132,225 | |||||||||||||
Dr. Georg Freiherr von Waldenfels | 10,000 | 107,975 | 0 | 117,975 | |||||||||||||
Attendance fees and meeting-related reimbursements(1) | 97,838 | ||||||||||||||||
Total | 265,000 | 2,861,340 | 125,728 | 3,349,906 | |||||||||||||
(1) | Attendance fees and meeting-related reimbursements are given as an aggregate for all Supervisory Board members. |
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SARs | |||||||||||||||||||||
Fixed annual | Annual | Gains from | granted | ||||||||||||||||||
Name | compensation | bonus | exercising SARs | Total | in 2004 | ||||||||||||||||
(€) | (€) | (€) | (€) | (No. of | |||||||||||||||||
SARs) | |||||||||||||||||||||
Dr. Wulf H. Bernotat | 1,025,000 | 2,100,000 | 0 | 3,125,000 | 95,339 | ||||||||||||||||
Dr. Burckhard Bergmann | 650,000 | 1,400,000 | 0 | 2,050,000 | 63,559 | ||||||||||||||||
Dr. Hans Michael Gaul | 650,000 | 1,400,000 | 109,935 | 2,159,935 | 63,559 | ||||||||||||||||
Dr. Manfred Krüper | 650,000 | 1,400,000 | 0 | 2,050,000 | 63,559 | ||||||||||||||||
Dr. Erhard Schipporeit | 650,000 | 1,400,000 | 107,800 | 2,157,800 | 63,559 | ||||||||||||||||
Dr. Johannes Teyssen | 530,000 | 1,100,000 | 100,200 | 1,730,200 | 52,966 | ||||||||||||||||
Other compensation | 503,962 | ||||||||||||||||||||
Total | 4,155,000 | 8,800,000 | 317,935 | 13,776,897 | 402,541 | ||||||||||||||||
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F-84
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E.ON AG |
By: | /s/Dr. Erhard Schipporeit |
Dr. Erhard Schipporeit | |
Member of the Board of Management and | |
Chief Financial Officer | |
/s/Michael C. Wilhelm | |
Michael C. Wilhelm | |
Senior Vice President Accounting |