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o | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
OR | ||
þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended: December 31, 2006 | ||
OR | ||
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
OR | ||
o | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
Date of event requiring this shell company report . | ||
For the transition period from to | ||
Commission file number: 1-14688 |
Federal Republic of Germany | E.ON-Platz 1, D-40479 Düsseldorf, GERMANY | |
(Jurisdiction of Incorporation or Organization) | (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* |
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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. | |
• | “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 LLC (“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”). | |
• | “E.ON Sverige” refers to E.ON Sverige AB (formerly Sydkraft AB or “Sydkraft”) and its consolidated subsidiaries, and “E.ON Finland” refers to E.ON Finland Oyj (“E.ON Finland”) and its consolidated subsidiaries, which collectively comprised E.ON’s Nordic energy business in the Nordic market unit until the disposal of E.ON Finland. | |
• | “E.ON U.S.” refers to E.ON U.S. LLC (formerly LG&E Energy) 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, E.ON U.S. formed the U.S. business of the Powergen Group. | |
• | “Viterra” refers to Viterra AG and its consolidated subsidiaries, which collectively comprised E.ON’s real estate business in the other activities segment. | |
• | “Degussa” refers to Degussa AG and its consolidated subsidiaries, which collectively comprised E.ON’s chemicals business in the other activities segment. | |
• | “VEBA Oel” refers to VEBA Oel AG and its consolidated subsidiaries, which collectively comprised E.ON’s former oil division. | |
• | “VAW” refers to VAW aluminium AG and its consolidated subsidiaries, which collectively comprised E.ON’s former aluminum division. |
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Item 1. | Identity of Directors, Senior Management and Advisers. |
Item 2. | Offer Statistics and Expected Timetable. |
Item 3. | Key Information. |
Year Ended December 31, | ||||||||||||||||||||||||
2006(1) | 2006 | 2005 | 2004 | 2003 | 2002 | |||||||||||||||||||
(in millions, except share amounts) | ||||||||||||||||||||||||
Statement of Income Data: | ||||||||||||||||||||||||
Sales | $ | 89,422 | €67,759 | €56,141 | €46,489 | €44,839 | €35,133 | |||||||||||||||||
Sales excluding electricity and natural gas taxes(2) | 84,721 | 64,197 | 51,616 | 42,150 | 39,953 | 34,200 | ||||||||||||||||||
Income/(Loss) from continuing operations before income taxes | 6,774 | 5,133 | 7,152 | 6,332 | 5,204 | (1,013 | ) | |||||||||||||||||
Income/(Loss) from continuing operations after income taxes(3) | 7,200 | 5,456 | 4,891 | 4,480 | 4,051 | (324 | ) | |||||||||||||||||
Income/(Loss) from continuing operations | 6,506 | 4,930 | 4,355 | 4,011 | 3,602 | (949 | ) | |||||||||||||||||
Income/(Loss) from discontinued operations(4) | 168 | 127 | 3,059 | 328 | 1,485 | 3,535 | ||||||||||||||||||
Net income | 6,674 | 5,057 | 7,407 | 4,339 | 4,647 | 2,777 | ||||||||||||||||||
Basic earnings/(Loss) per share from continuing operations | 9.87 | 7.48 | 6.61 | 6.11 | 5.51 | (1.45 | ) | |||||||||||||||||
Basic earnings (Loss) per share from discontinued operations, net(4) | 0.25 | 0.19 | 4.64 | 0.50 | 2.27 | 5.42 | ||||||||||||||||||
Basic earnings per share from net income(5) | 10.12 | 7.67 | 11.24 | 6.61 | 7.11 | 4.26 | ||||||||||||||||||
Balance Sheet Data: | ||||||||||||||||||||||||
Total assets | $ | 167,908 | €127,232 | €126,562 | €114,062 | €111,850 | €113,503 | |||||||||||||||||
Long-term financial liabilities | 13,143 | 9,959 | 10,555 | 13,540 | 14,884 | 17,576 | ||||||||||||||||||
Stockholders’ equity(6) | 63,141 | 47,845 | 44,484 | 33,560 | 29,774 | 25,653 | ||||||||||||||||||
Number of authorized shares | 692,000,000 | 692,000,000 | 692,000,000 | 692,000,000 | 692,000,000 |
(1) | Amounts in this column are unaudited and have been translated solely for the convenience of the reader at an exchange rate of $1.3197 = €1.00, the Noon Buying Rate on December 29, 2006. |
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(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 €526 million for 2006, as compared with €536 million, €469 million, €449 million and €625 million for 2005, 2004, 2003 and 2002, 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, €(0.01), €0.00, €(0.67) and €0.29 for 2006, 2005, 2004, 2003 and 2002, respectively. |
(6) | After minority interests. |
Dividends Paid | ||||||||
per Ordinary | ||||||||
Share with no | ||||||||
par value | ||||||||
Year Ended December 31, | € | $(1) | ||||||
2002 | 1.75 | 1.96 | ||||||
2003 | 2.00 | 2.39 | ||||||
2004 | 2.35 | 3.04 | ||||||
2005(2) | 2.75 | 3.50 | ||||||
2006(3) | 3.35 | 4.42 |
(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 2006 amount, which has been translated at the Noon Buying Rate on December 29, 2006. |
(2) | An extra dividend for 2005 of €4.25 per Ordinary Share, resulting from the proceeds from the sale of E.ON’s remaining 42.9 percent stake in Degussa, was paid together with the regular 2005 dividend amount. For details on this transaction, see “Item 5. Operating and Financial Review and Prospects — Overview.” |
(3) | The dividend amount for the year ended December 31, 2006 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 May 3, 2007. |
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Period | Average(1) | High | Low | Period-End | ||||||||||||
2002 | 0.9495 | 1.0485 | ||||||||||||||
2003 | 1.1411 | 1.2597 | ||||||||||||||
2004 | 1.2478 | 1.3538 | ||||||||||||||
2005 | 1.2400 | 1.1842 | ||||||||||||||
2006 | 1.2661 | 1.3197 | ||||||||||||||
September | 1.2833 | 1.2648 | ||||||||||||||
October | 1.2773 | 1.2502 | ||||||||||||||
November | 1.3261 | 1.2705 | ||||||||||||||
December | 1.3327 | 1.3073 | ||||||||||||||
2007 | ||||||||||||||||
January | 1.3286 | 1.2904 | ||||||||||||||
February | 1.3246 | 1.2933 |
(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 countermeasures; | |
• | Evaluation of risks according to the degree of severity and the probability of occurrence, and an annual assessment of the effectiveness of existing countermeasures; and | |
• | Analysis of the results and structured disclosure in a risk report. |
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• | As noted above, in Germany the BNetzA has reduced the allowed network charges which were submitted for approval by the Company’s electricity and gas distribution network operators. For electricity, approved network charges of E.ON’s transmission system operator as well as its regional distribution network operators averaged a 13.7 percent reduction from the network charges E.ON originally filed for approval, while approved network charges for E.ON’s regional gas distribution network operators averaged a 10.0 percent reduction from those initially proposed by the Company. The approved network charges were based on a different interpretation of Germany’s new energy law by the BNetzA than that used by E.ON’s network operators (and the majority of German network operators) to calculate their network charges. | |
• | In Germany, the state antitrust authorities as well as the German Federal Cartel Office (Bundeskartellamt) regularly examine gas tariffs of utilities for household customers to determine whether these prices constitute market abuse. The companies belonging to the E.ON Energie group have delivered the information required. No formal proceedings are pending. | |
• | The Federal Cartel Office has opened proceedings against E.ON Energie and RWE, alleging that these two companies are abusing their dominant position in the energy market by including the costs for CO2 emission certificates in the calculation of energy prices for industrial customers. In this context, RWE has already received a statement of objections from the Federal Cartel Office. E.ON believes that the way the Group’s businesses calculate their electricity prices is in accordance with accepted calculation methods and therefore there have been no illegal acts by the Group in this regard. Should the Federal Cartel Office qualify E.ON’s calculation method as an abuse of a dominant position, E.ON would appeal against the decision. However, the outcome of such an appeal cannot be predicted. | |
• | Electricity and gas prices and sales practices have also been the subject of periodic challenges by the German antitrust authorities, although to date E.ON has prevailed in such cases, sometimes on appeal after a negative ruling by a court of first instance. Currently, 54 customers of E.ON Hanse AG (“E.ON Hanse”) have brought a claim asserting that recent price increases violate certain provisions of the German Civil Code(Bürgerliches Gesetzbuch). In order to support its case that the price increases were reasonable within the meaning of applicable law, E.ON Hanse has disclosed the basis on which it calculates prices for household customers to the District Court(Landgericht)in Hamburg. The court is currently examining E.ON Hanse’s submissions in this respect. In an unrelated proceeding, E.ON Westfalen Weser AG (“E.ON Westfalen Weser”) has brought suit against a group of customers that have refused to pay the increased prices. No assurances can be given as to the outcome of either of these proceedings. | |
• | With effect from April 2005, regulators in the United Kingdom renewed a price control framework for electricity distribution customers that is in effect through the five year period ending March 2010. | |
• | In the United States, the rates for E.ON U.S.’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 as an adjustment is sought and approved. E.ON U.S.’s affected utilities applied for and received increases in regulated tariffs effective as of July 1, 2004. |
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• | On January 8-9, 2005, a severe storm hit Sweden, destroying the electricity distribution grid in some areas in the south of the country. Approximately 250,000 E.ON Sverige customers were affected by the resulting power outage, and some customers were left without electricity for several weeks. In 2005, E.ON Sverige recorded related costs for rebuilding its distribution grid and compensating customers of approximately €140 million. | |
• | In July 2006, a transmission-related incident at the Forsmark nuclear power plant in Sweden (in which E.ON Sverige owns a minority interest) resulted in an emergency shutdown of the plant and subsequent modifications to the plant’s transmission infrastructure. Reviews of similar infrastructure at other reactors following the Forsmark incident took a number of Swedish reactors out of service for a period of several weeks and revealed the need for a significant overhaul at the Oskarshamn I reactor operated by E.ON Sverige, which was only restarted in January 2007. | |
• | On November 4, 2006, an overload in the northwestern German power transmission grid occurred, leading to disturbances in other parts of the continental European power grid and an interruption of the power supply for more than 15 million European households located in parts of Germany, France, Belgium, the Netherlands, Italy and Spain. According to initial findings, the overload occurred after the E.ON Netz GmbH (“E.ON Netz”, a subsidiary of E.ON Energie) control center made an erroneous estimation in its planned interruption of a high voltage power line across the Ems river in Germany to allow the passage of a Norwegian cruise liner. Functioning safety mechanisms and close cooperation among European transmission system operators ensured that a full reconnection of the power grids and stabilization of the system occurred within 38 minutes after the grid separated into three “islands”, thus avoiding an uncontrolled blackout. A further investigation of the circumstances leading to the power blackout (including whether other factors played a role) will determine if consumers affected by the power interruption are entitled to compensation by E.ON Netz. | |
• | On January 14, 2007, another severe storm hit southern Sweden. Approximately 170,000 E.ON Sverige customers were affected by the resulting power outage, and some customers were left without electricity for up to ten days. Preliminary estimates of the costs to be incurred by E.ON Nordic for rebuilding its distribution grid and compensating affected customers are in the range of €95 million. | |
• | On January 18 and 19, 2007, a severe storm hit several European countries, damaging the electricity distribution grid of E.ON Energie in some areas of Germany, the Czech Republic, Hungary and Romania. In Germany, approximately 750,000 customers were disconnected from the grid (in the Czech Republic: approximately 500,000 customers; in Hungary: approximately 90,000 customers; and in Romania: approximately 5,000 customers). Approximately 80 percent of the affected customers were reconnected within one day, and nearly all customers were reconnected within three days. The costs of repairing the damages are not expected to be significant. |
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• | receipt of valid tenders in the U.S. Offer and the Spanish Offer for at least an aggregate of 529,481,934 Endesa ordinary shares (including Endesa ordinary shares represented by Endesa ADSs), representing 50.01 percent of Endesa’s share capital (the “minimum tender condition”); | |
• | certain modifications being made to Endesa’s articles of association with regard to limitations on voting rights, qualifications for directors and other corporate governance matters; and | |
• | the completion of the Spanish Offer. |
Expected Date | Action | |
March 29, 2007 | End of acceptance period of the Offers | |
April 3, 2007 | CNMV informs E.ON about acceptance levels | |
April 5, 2007 | Spanish stock exchanges publish results in official bulletins | |
April 12, 2007 | Settlement of tendered shares |
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• | Tranche A (2/3 of facility amount) with a maturity on February 18, 2008 and | |
• | Tranche B (1/3 of facility amount) with a maturity on February 20, 2009. |
• | upon a change of control if so requested by the majority of banks within 30 days of the occurrence of a change of control event; | |
• | out of the net proceeds of amounts raised pursuant to the refinancing strategy for the amounts borrowed that E.ON intends to carry out; |
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• | out of the net proceeds of any disposal required by any applicable law, regulation or any decision taken by a competent antitrust or other authority in connection with the acquisition of Endesa and received by E.ON (or capable of being made available to E.ON by way of inter-company loan or dividend); and | |
• | out of the net proceeds of material disposals that are received by E.ON (or capable of being made available to E.ON by way of inter-company loan or dividend) in excess of €1 billion (either on its own or aggregated) as long as the total term loan commitments exceed €17 billion at the time of disposal. |
• | Existing and Future Cash. Initially the entire settlement amount for the Offers will be funded with bank debt, but part of this will be refinanced with existing cash resources. At the date of this annual report, it is expected that between €4 and €6 billion of liquid funds will be available for the refinancing of part of the bank debt. Also, E.ON’s business is highly cash generative, and it is foreseen that strong cash flows will be available that are sufficient to comply with the investment plans and also repayment plans. | |
• | Equity or Equity like Issues. Depending on the volume of acceptances of the Offers, E.ON may issue equity or equity like instruments to repay part of the bank debt and help to meet E.ON’s rating objective. E.ON will consider issuing up to 10 percent of its equity capital. |
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• | Debt Capital Market Issues. Subject to market conditions, E.ON intends to access the debt capital markets quickly, but in an orderly manner and will consider debt instruments in euros, sterling, U.S. dollars and possibly other currencies. E.ON has an existing €10 billion commercial paper program, and a €20 billion MTN program. Both programs have been already partially used but can be increased in size if required. | |
• | Asset Disposals. If necessary, E.ON may also consider asset disposals to repay part of the bank debt and help to meet its rating objective. The proceeds of such sales would be used to repay the bank debt in line with the mandatory prepayment clause. |
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• | broaden the dimensions of E.ON in Europe’s gas and power markets, given the positions of Endesa in Southern Europe; | |
• | add Endesa’s outstanding position in fast growing markets to E.ON’s strong asset portfolio; and | |
• | bring together two companies with the same vision of creating a leading integrated power and gas business, with the aim of investing for the long term to create value for both investors and customers. |
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• | E.ON 12 must keep Endesa as the parent company of its group and may not merge any of its subsidiaries with E.ON 12 for a period of five years after having obtained control of Endesa. Endesa must keep its brand, registered office and administrative body. | |
• | E.ON 12 must adequately fund Endesa in order to maintain a ratio of net financial debt to EBITDA of less than 5.25 for a period of three years after having obtained control of Endesa. | |
• | Until the year 2010, member companies of the combined E.ON and Endesa group carrying out regulated activities in Spain may only pay dividends if the resources generated by them are sufficient to meet their financial and investment commitments. | |
• | E.ON 12 must make all investments in regulated activities of gas and electricity as set out in the Endesa investment plans for the period2006-2009 and certain other plans, and must furnish certain information and plans to the competent authorities. | |
• | In the period from 2010 to 2015, E.ON 12 must annually inform the CNE about its future investment plans regarding regulated activities and strategic assets of gas and electricity. | |
• | E.ON 12 must maintain Endesa’s ordinary generation facilities for their remaining usable life as currently intended by Endesa. | |
• | Until the year 2009, E.ON 12 may not redirect any natural gas to markets other than the Spanish market, if the annual volume of gas as set out in the natural gas supply plans submitted by Endesa to the CNE is not met. | |
• | All nuclear facilities owned by Endesa must comply with the obligations and regulations regarding nuclear matters and all applicable law and agreements as to the management of such nuclear facilities regarding questions of security and supply of uranium. | |
• | For a period of five years after obtaining control of Endesa, E.ON 12 must maintain the current companies owning assets used for the generation, distribution or transmission of insular or extra-peninsular electricity systems. | |
• | For a period of five years after obtaining control of Endesa, E.ON 12 must guarantee that the aggregated annual consumption of each of Endesa’s plants that currently consume Spanish coal is not less than the aggregated annual volume set out in the National Plan of Coal Mining2006-2012. | |
• | Future acquisitions of shares in Endesa shall be governed by the same set of rules as in force. |
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• | E.ON 12 must not adopt strategic decisions as to Endesa which will affect the security of supply contrary to the Spanish law. | |
• | Any violation of the conditions set out by the decision of the Spanish Ministry of Industry may lead to legal proceedings under the applicable Spanish energy regulations. | |
• | If, during a period of ten years after E.ON 12 obtained control of Endesa, any third party acquires or attempts to acquire, directly or indirectly, shares in E.ON amounting to more than 50 percent of the share capital or granting more than 50 percent of the voting rights, E.ON must notify CNE, which will be entitled to modify the decision of the Spanish Ministry of Industry set forth above. In this case, CNE may require E.ON to dispose of all the ordinary shares of Endesa. | |
• | The CNE may request the Spanish government to adopt measures based on the relevant Spanish regulations in order to guarantee the supply of energy in emergency situations. |
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• | An Integrated Power and Gas Business. E.ON intends to follow a long-term strategy with a clear focus on integrated power and gas operations that enjoy leading positions in their respective markets. In doing so, it seeks to develop positions throughout the energy value chain, including positions in infrastructure where they are seen as enhancing E.ON’s access to markets and customers. | |
• | A Clear Geographic Focus. E.ON seeks to strengthen its leading positions and performance in its existing markets (Central Europe, Pan-European Gas, U.K., Nordic and U.S. Midwest), while taking focused steps in new markets such as Italy, Russia, Turkey and — through the proposed acquisition of Endesa — also Spain and Latin America. | |
• | Clear Strategic Priorities. E.ON’s first priority is to strengthen and grow its position in European markets while maintaining a strong and diversified generation portfolio and enhancing its gas supply position through investments in “equity gas” produced from fields in which E.ON holds an interest, as well as the potential development of liquefied natural gas (“LNG”) as an alternative form of gas delivery. E.ON currently views the United States as an opportunity for more long-term growth. | |
• | Strict Investment Criteria. In following this model, E.ON applies strict strategic and financial criteria to each potential investment, focusing on those which management believes exhibit the potential for material value creation. |
• | 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 vertical integration (i.e., establishing a presence in all parts of the value chains for both power and gas); | |
• | 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; |
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• | 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, both through organic growth and through pursuing selective investments which contribute to these objectives or provide stand alone value creation opportunities, as described below; | |
• | Creation of a common corporate culture under the OneE.ON initiative, which seeks to enhance integration of all market units and their subsidiaries under the E.ON banner so as to help the E.ON Group realize its vision and strategic goals, while maintaining its commitment to corporate social responsibilities; and | |
• | Tapping value-enhancing growth potential in new markets such as Italy, Russia, Turkey and Spain and Latin America. |
• | Central Europe — Fortifying strong market positions, enhancing the company’s competitive activities in the mass market and developing new growth potential through: |
• | consolidation of distribution and sales activities and capitalizing on opportunities from power-gas convergence; | |
• | significant investment in power generation to maintain the market position; | |
• | hedging exposure to price risks through vertical integration of generation and sales operations; | |
• | participating in the privatization of power and downstream gas companies in Eastern Europe, as well as significant investments in power generation; and | |
• | continued growth in the market of Italy,i.e.in power generation, trading and the retail business. |
• | Pan-European Gas — Strengthening and diversifying E.ON Ruhrgas’ current position through: |
• | selective equity investments in gas production in the North Sea and Russia; | |
• | pursuing LNG options (including upstream positions) to maintain long-term supply diversification; | |
• | securing security of supply through new (and renewed) long-term supply contracts with producers; and | |
• | participating in infrastructure projects to enhance gas supply position 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 U.K. 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. |
• | Nordic — Strengthening E.ON’s position through: |
• | expanding its presence in power generation; | |
• | enhancing scale through synergistic acquisitions in distribution and district heating; and | |
• | continued participation in gas supply and infrastructure developments. |
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• | U.S. Midwest — Focusing on optimizing E.ON U.S.’s current operations in Kentucky and delivering additional performance improvements. This could include investments in generation capacity if the demand for electricity grows. |
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2006 | 2005 | 2004 | ||||||||||||||||||||||
(€ in | (€ in | (€ in | ||||||||||||||||||||||
millions) | % | millions) | % | millions) | % | |||||||||||||||||||
Central Europe(1) | 28,380 | 41.9 | 24,295 | 43.3 | 20,752 | 44.6 | ||||||||||||||||||
Pan-European Gas(2)(3) | 24,987 | 36.9 | 17,914 | 32.0 | 13,227 | 28.5 | ||||||||||||||||||
U.K. | 12,569 | 18.5 | 10,176 | 18.1 | 8,490 | 18.3 | ||||||||||||||||||
Nordic(2)(4) | 3,204 | 4.7 | 3,213 | 5.7 | 3,094 | 6.7 | ||||||||||||||||||
U.S. Midwest(2) | 1,947 | 2.9 | 2,045 | 3.6 | 1,718 | 3.7 | ||||||||||||||||||
Corporate Center(2)(5) | (3,328 | ) | (4.9 | ) | (1,502 | ) | (2.7 | ) | (792 | ) | (1.8 | ) | ||||||||||||
Total Revenues(6) | 67,759 | 100.0 | 56,141 | 100.0 | 46,489 | 100.0 | ||||||||||||||||||
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(1) | Includes energy taxes of €1,124 million in 2006, €1,049 million in 2005 and €1,051 million in 2004. |
(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) | Sales include natural gas and electricity taxes of €2,061 million in 2006, €3,110 million in 2005 and €2,923 million in 2004. |
(4) | Sales include electricity and natural gas taxes of €377 million in 2006, €382 million in 2005 and €376 million in 2004. |
(5) | Includes primarily the parent company and effects from consolidation, as well as the results of its remaining telecommunications interests, as noted above. |
(6) | Excludes intercompany sales. |
• | In February 2006, E.ON Energie and RWE signed agreements to swap certain shareholdings in the Czech Republic and Hungary. These transactions were completed in August 2006. | |
• | In July 2006, E.ON Ruhrgas and OAO Gazprom signed a framework agreement memorializing the basic understanding of the parties regarding a swap of assets, including a 25.0 percent plus one share interest in E.ON Hungária Energetikai ZRt. (“E.ON Hungária”), currently wholly owned by E.ON Energie, which is to be transferred to OAO Gazprom. For details, see “— Pan-European Gas — Overview.” | |
• | In December 2006, E.ON Energie acquired 75.0 percent of the share capital of Dalmine Energie S.p.A. (“Dalmine”), an Italian company that focuses on electricity and gas wholesale. |
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• | Construction has already begun on new facilities at Irsching, Germany (a 530 MW advanced natural gas plant to be built in cooperation with Siemens AG, scheduled to begin operations in 2011), Datteln, Germany (a 1,100 MW hard coal plant, scheduled to begin operations in 2011) and Livorno Ferraris, Italy (an 800 MW natural gas plant, scheduled to begin operations in 2008). | |
• | E.ON Energie is also committed to building a new plant at Irsching, Germany (an 800 MW natural gas plant). In addition, E.ON Energie plans to build new plants at the location of Staudinger, Germany (a 1,100 MW hard coal plant) and Maasvlakte, the Netherlands (a 1,100 MW hard coal plant) if all requirements are met. | |
• | E.ON Energie plans to build various power plants in Eastern Europe. |
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• | Leading entity for the management and coordination of the group activities. |
• | Centralized strategic, controlling and service functions. |
• | 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 in the Netherlands. |
• | District heating in the Netherlands. |
• | Sales of power and gas in the Netherlands. |
• | Operation of high voltage grids (380 kilovolt-110 kilovolt). |
• | System operation, including provision of regulating and balancing power. |
• | 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. |
• | Distribution and sales of electricity, gas, heat and water to retail customers. |
• | Ownership and operation of regional grid companies in compliance with the Energy Law of 2005. |
• | Energy support services. |
• | Waste incineration. |
• | Customer service and electricity and heat supply to utilities and industrial customers in the Ruhr region. |
• | Generation, distribution and sales of electricity and gas in Hungary through its group companies. |
• | Generation, distribution and sales of electricity and gas in the Czech Republic through its group companies. |
• | Distribution and sales of electricity in Romania. |
• | Distribution and sales of electricity in Bulgaria through its group companies. |
• | Distribution and sales of electricity in Slovakia. |
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• | Provision of consulting and planning services in the energy sector to companies within the Group and third parties. |
• | Marketing of expertise in the area of conventional, renewable, cogeneration and nuclear power generation and pipeline business. |
• | Provision of information technology services to companies within the Group and third parties. |
• | Infrastructure services. |
(1) | According to the framework agreement between E.ON Ruhrgas and OAO Gazprom regarding a swap of assets, including a 25.0 percent plus one share interest in E.ON Hungária, E.ON Energie’s interest in E.ON Hungária will be reduced to 75.0 percent minus one share. For details, see “— Pan-European Gas — Overview.” |
(2) | The remaining 43.0 percent is held by E.ON Ruhrgas. |
(3) | The remaining 40.0 percent is held by E.ON AG and E.ON Ruhrgas. |
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: | the transfer of electricity from the interregional power grid and its delivery, across local distribution systems, to customers; | |
Sales: | the sale of electricity to customers; and | |
Trading: | the buying and selling of electricity and related products for purposes of portfolio optimization, arbitrage and risk management. |
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2006 | 2005 | |||||||||||
million | million | % | ||||||||||
Sources of Power | kWh | kWh | Change | |||||||||
Own production | 131,304 | 129,063 | +1.7 | |||||||||
Purchased power | 149,867 | 142,215 | +5.4 | |||||||||
from power stations in which E.ON Energie has an interest of 50 percent or less | 12,287 | 12,019 | +2.2 | |||||||||
from other suppliers | 137,580 | 130,196 | +5.7 | |||||||||
Total power procured(1) | 281,171 | 271,278 | +3.6 | |||||||||
Power used for operating purposes, network losses and pump storage | (12,951 | ) | (12,735 | ) | +1.7 | |||||||
Total | 268,220 | 258,543 | +3.7 | |||||||||
(1) | Excluding physically-settled electricity trading activities at E.ON Sales & Trading GmbH (“EST”). EST’s physically-settled electricity trading activities amounted to 161,892 million kWh and 113,666 million kWh in 2006 and 2005, respectively. |
Total | Total | |||||||||||
2006 | 2005 | % | ||||||||||
million | million | Change in | ||||||||||
Sale of Power(1) to | kWh | kWh | Total | |||||||||
Non-consolidated interregional, regional and municipal utilities | 145,688 | 138,425 | +5.2 | |||||||||
Industrial and commercial customers | 77,238 | 77,175 | — | |||||||||
Residential and small commercial customers | 45,294 | 42,943 | +5.5 | |||||||||
Total | 268,220 | 258,543 | +3.7 | |||||||||
(1) | Excluding physically-settled electricity trading activities at EST. EST’s physically-settled electricity trading activities amounted to 161,892 million kWh and 113,666 million kWh in 2006 and 2005, respectively. |
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Total | Total | |||||||||||
2006 | 2005 | % | ||||||||||
million | million | Change in | ||||||||||
Sale of Gas to | kWh | kWh | Total | |||||||||
Non-consolidated interregional, regional and municipal utilities | 30,631 | 29,475 | +3.9 | |||||||||
Industrial and commercial customers | 53,208 | 46,199 | +15.2 | |||||||||
Residential and small commercial customers | 44,629 | 36,653 | +21.8 | |||||||||
Total | 128,468 | 112,327 | +14.4 | |||||||||
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Capacity | ||||||||||||||||
Total | Attributable to | |||||||||||||||
Capacity | E.ON Energie | 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 | 352 | 100.0 | 352 | 1985 | ||||||||||||
Lippendorf S | 891 | 50.0 | 446 | 1999 | ||||||||||||
Schkopau | 900 | 55.6 | 500 | 1995 | ||||||||||||
Others (< 100 MW) | 33 | n/a | 17 | n/a | ||||||||||||
Total | 2,176 | 1,315 | ||||||||||||||
Hard Coal | ||||||||||||||||
Bexbach 1 | 714 | 8.3 | 59 | 1983 | ||||||||||||
Datteln 3 | 113 | 100.0 | 113 | 1969 | ||||||||||||
Farge | 345 | 100.0 | 345 | 1969 | ||||||||||||
GKW Weser/Veltheim 3 | 303 | 67.0 | 203 | 1970 | ||||||||||||
Heyden | 875 | 100.0 | 875 | 1987 | ||||||||||||
Kiel | 323 | 50.0 | 162 | 1970 | ||||||||||||
Knepper C | 345 | 100.0 | 345 | 1971 | ||||||||||||
Maasvlakte 1 (NL)(2) | 532 | 100.0 | 532 | 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 | ||||||||||||
Scholven D | 345 | 100.0 | 345 | 1970 | ||||||||||||
Scholven E | 345 | 100.0 | 345 | 1971 | ||||||||||||
Scholven F | 676 | 100.0 | 676 | 1979 |
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Capacity | ||||||||||||||||
Total | Attributable to | |||||||||||||||
Capacity | E.ON Energie | Start-up | ||||||||||||||
Power Plants | Net MW | %(1) | MW | Date | ||||||||||||
Hard Coal (continued) | ||||||||||||||||
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 | ||||||||||||
Others (< 100 MW) | 353 | n/a | 322 | n/a | ||||||||||||
Total | 10,057 | 8,513 | ||||||||||||||
Natural Gas | ||||||||||||||||
Kirchlengern | 180 | 62.9 | 113 | 1980 | ||||||||||||
Burghausen (CHP) | 120 | 100.0 | 120 | 2001 | ||||||||||||
Obernburg (CHP) | 100 | 50.0 | 50 | 1995 | ||||||||||||
Franken I/1 | 383 | 100.0 | 383 | 1973 | ||||||||||||
Franken I/2 | 440 | 100.0 | 440 | 1976 | ||||||||||||
Galileistraat (NL) (CHP) | 209 | 100.0 | 209 | 1988 | ||||||||||||
GKW Weser/Veltheim 4 GT | 390 | 67.0 | 261 | 1975 | ||||||||||||
Huntorf | 290 | 100.0 | 290 | 1977 | ||||||||||||
Irsching 3 | 415 | 100.0 | 415 | 1974 | ||||||||||||
Jena-Süd | 199 | 62.9 | 125 | 1996 | ||||||||||||
Kirchmöser | 160 | 100.0 | 160 | 1994 | ||||||||||||
RoCa 3 (NL) (CHP)(2) | 220 | 100.0 | 220 | 1996 | ||||||||||||
Robert Frank 4 | 491 | 100.0 | 491 | 1973 | ||||||||||||
Staudinger 4 | 622 | 100.0 | 622 | 1977 | ||||||||||||
Emden 4(3) | 433 | 100.0 | 433 | 1972 | ||||||||||||
Others (< 100 MW) | 737 | n/a | 599 | n/a | ||||||||||||
Total | 5,389 | 4,931 | ||||||||||||||
Fuel Oil | ||||||||||||||||
Ingolstadt 3 | 386 | 100.0 | 386 | 1973 | ||||||||||||
Ingolstadt 4 | 386 | 100.0 | 386 | 1974 | ||||||||||||
Others (< 100 MW) | 381 | n/a | 381 | n/a | ||||||||||||
Total | 1,153 | 1,153 | ||||||||||||||
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Capacity | ||||||||||||||||
Total | Attributable to | |||||||||||||||
Capacity | E.ON Energie | Start-up | ||||||||||||||
Power Plants | Net MW | %(1) | MW | Date | ||||||||||||
Hydroelectric | ||||||||||||||||
Braunau-Simbach | 100 | 50.0 | 50 | 1953 | ||||||||||||
Erzhausen | 220 | 100.0 | 220 | 1964 | ||||||||||||
Happurg | 160 | 100.0 | 160 | 1958 | ||||||||||||
Jochenstein | 132 | 50.0 | 66 | 1955 | ||||||||||||
Langenprozelten | 164 | 100.0 | 164 | 1975 | ||||||||||||
Reisach | 105 | 100.0 | 105 | 1955 | ||||||||||||
Walchensee | 124 | 100.0 | 124 | 1924 | ||||||||||||
Waldeck 1 | 120 | 100.0 | 120 | 1931 | ||||||||||||
Waldeck 2 | 440 | 100.0 | 440 | 1975 | ||||||||||||
Others (< 100 MW) | 1,843 | n/a | 1,664 | n/a | ||||||||||||
Total | 3,408 | 3,113 | ||||||||||||||
Others (waste, wind, biomass et al.) | ||||||||||||||||
Waste | 261 | 163 | ||||||||||||||
Wind, biomass et al. | 332 | 210 | ||||||||||||||
Total | 593 | 373 | ||||||||||||||
Total | 36,336 | 27,871 | ||||||||||||||
Mothballed/Shutdown/Reduced Mothballed | ||||||||||||||||
Irsching 1 | 151 | 100.0 | 151 | 1969 | ||||||||||||
Irsching 2 | 312 | 100.0 | 312 | 1972 | ||||||||||||
Pleinting 1 | 292 | 100.0 | 292 | 1968 | ||||||||||||
Pleinting 2 | 402 | 100.0 | 402 | 1976 | ||||||||||||
Staudinger 2 | 249 | 100.0 | 249 | 1965 | ||||||||||||
Dismantling | ||||||||||||||||
Arzberg 5 | 104 | 100.0 | 104 | 1966 | ||||||||||||
Arzberg 6 | 252 | 100.0 | 252 | 1974 | ||||||||||||
Arzberg 7 | 121 | 100.0 | 121 | 1979 | ||||||||||||
Offleben | 280 | 100.0 | 280 | 1972 | ||||||||||||
Rauxel 2 | 164 | 100.0 | 164 | 1967 | ||||||||||||
Scholven G | 672 | 50.0 | 336 | 1974 | ||||||||||||
Scholven H | 672 | 50.0 | 336 | 1975 | ||||||||||||
Stade | 640 | 66.7 | 417 | 1972 | ||||||||||||
Total | 4,311 | 3,416 | ||||||||||||||
(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) | Emden 4 was restarted on January 13, 2006. |
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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 allocated kWh among themselves. This means that if one nuclear plant closes before it has produced the allocated 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 was allowed until June 30, 2005. 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 Company is to construct five interimon-site storage facilities. Two of these, Grafenrheinfeld and Grohnde, went into operation in the first quarter of 2006, while the remaining three interimon-site storage facilities (Brokdorf, Isar and Unterweser) are scheduled to go into operation in the first half of 2007. |
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2006 | 2005 | % | ||||||||||
million | million | Change in | ||||||||||
Sale of Power to | kWh | kWh | Total | |||||||||
Non-consolidated interregional, regional and municipal utilities(1) | 135,112 | 116,654 | +15.8 | |||||||||
Industrial and commercial customers(2)(3) | 53,896 | 59,134 | −8.9 | |||||||||
Residential and small commercial customers | 29,736 | 29,978 | −0.8 | |||||||||
Total(3) | 218,744 | 205,766 | +6.3 | |||||||||
(1) | The sale of power to non-consolidated interregional, regional and municipal utilities increased in 2006 compared with 2005, primarily reflecting two effects. Sales volumes of EST outside of Germany increased markedly, partially due to the transfer of contracts from companies outside of Germany to EST. The increase also reflects the reclassification in 2006 of sales that had been previously attributed to industrial and commercial customers. | |
(2) | The sale of power to industrial and commercial customers decreased in 2006 compared with 2005 due to the reclassification in 2006 of sales that are now attributed to non-consolidated interregional, regional and municipal utilities. | |
(3) | The sale of power includes sales of EST in other European countries. |
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2006 | 2005 | % | ||||||||||
million | million | Change | ||||||||||
Trading of Power | kWh | kWh | in Total | |||||||||
Power sold | 201,543 | 164,109 | +22.8 | |||||||||
Power purchased | 222,843 | 168,734 | +32.1 | |||||||||
Total | 424,386 | 332,843 | +27.5 | |||||||||
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• | In March 2006, ERI completed the acquisition of 100 percent of the gas trading and gas storage businesses of the Hungarian oil and gas company MOL by acquiring ownership interests in MOL Földgázellátó Rt. and MOL Földgáztároló Rt. (which have since been renamed E.ON Földgaz Trade and E.ON Földgaz Storage). The acquisition of MOL’s 50.0 percent interest in the gas importer Panrusgáz was completed at the end of October 2006. | |
• | In July 2006, E.ON Ruhrgas signed a framework agreement with OAO Gazprom memorializing the basic understanding of the parties regarding the swap of the following assets: E.ON Ruhrgas to receive 25.0 percent minus one share in the Severneftegazprom joint venture company, which holds the exploration and production license for the Yushno Russkoje gas field in Russia and Gazprom to receive 50.0 percent minus one share in each of E.ON Földgaz Trade and E.ON Földgaz Storage and 25.0 percent plus one share in E.ON Hungária. Any difference in the agreed value of the assets to be exchanged is to be settled, as applicable, by Gazprom through a cash payment and/or by E.ON through the payment of cash or E.ON Ordinary Shares (with Gazprom being able to select the method of payment). However, the timing of these transfers and the precise terms on which they are to be executed have yet to be determined. | |
• | In December 2006, Thüga Aktiengesellschaft (“Thüga”) agreed with EnBW to sell certain shareholdings to EnBW group companies. The transfer of the shareholdings is expected to take place in the first half of 2007. |
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: | The transmission of gas within Germany via a network of approximately 11,400 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 supraregional and regional distributors, municipal utilities and industrial customers, as well as the delivery of gas to a number of customers in other European countries. |
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Total 2006 | Total 2005 | |||||||||||||||
Purchases | billion kWh | % | billion kWh | % | ||||||||||||
Imports | 609.9 | 84.4 | 580.0 | 84.5 | ||||||||||||
German sources | 113.3 | 15.6 | 106.1 | 15.5 | ||||||||||||
Total | 723.2 | 100.0 | 686.1 | 100.0 | ||||||||||||
Sales | ||||||||||||||||
Domestic distributors | 318.7 | 44.9 | 323.7 | 46.9 | ||||||||||||
Domestic municipal utilities | 163.1 | 23.0 | 160.9 | 23.3 | ||||||||||||
Domestic industrial customers | 67.6 | 9.5 | 70.4 | 10.2 | ||||||||||||
Sales abroad | 160.3 | 22.6 | 135.2 | 19.6 | ||||||||||||
Total | 709.7 | 100.0 | 690.2 | 100.0 | ||||||||||||
Total 2006 | Total 2005 | |||||||||||||||
Sources of Gas | billion kWh | % | billion kWh | % | ||||||||||||
Germany | 113.3 | 15.6 | 106.1 | 15.5 | ||||||||||||
Russia | 178.4 | 24.7 | 193.5 | 28.2 | ||||||||||||
Norway | 196.5 | 27.2 | 188.4 | 27.5 | ||||||||||||
The Netherlands | 137.5 | 19.0 | 139.0 | 20.2 | ||||||||||||
United Kingdom | 67.2 | 9.3 | 34.1 | 5.0 | ||||||||||||
Denmark | 22.9 | 3.2 | 23.7 | 3.4 | ||||||||||||
Others(1) | 7.4 | 1.0 | 1.3 | 0.2 | ||||||||||||
Total | 723.2 | 100.0 | 686.1 | 100.0 | ||||||||||||
(1) | Italy, France, Austria, Hungary and Slovakia. |
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E.ON Share | ||||||
Name of Producing Field | in % | Start-up Date | ||||
Ravenspurn North | 28.75 | July 1990 | ||||
Caister | 40.0 | October 1993 | ||||
Johnston | 50.107 | September 1994 | ||||
Schooner | 4.83 | September 1996 | ||||
Elgin/Franklin | 5.2 | April 2001 | ||||
Scoter | 12.0 | December 2003 | ||||
Hunter | 79.0 | January 2006 | ||||
Glenelg | 18.57 | April 2006 | ||||
Merganser | 7.9185 | December 2006 |
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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 GmbH & Co.) | 74.8 | |||
GHG (GHG-Gasspeicher Hannover Gesellschaft mbH) | 13.2 | |||
MEGAL (MEGAL Mittel-Europäische-Gasleitungsgesellschaft mbH & Co. KG) | 51.0 | |||
METG (Mittelrheinische Erdgastransportleitungsgesellschaft mbH) | 100.0 | |||
NETG (Nordrheinische Erdgastransportleitungsgesellschaft mbH & Co. KG) | 50.0 | |||
NETRA (NETRA GmbH Norddeutsche Erdgas Transversale & Co. KG) | 40.6 | |||
TENP (Trans Europa Naturgas Pipeline GmbH & Co. KG) | 51.0 |
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Maintained | ||||||||
Total | by E.ON Ruhrgas AG | |||||||
Pipelines | km | km | ||||||
Owned by E.ON Ruhrgas AG | 6,556 | 6,234 | ||||||
Co-owned pipelines | 1,543 | 604 | ||||||
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) | 998 | 998 | ||||||
Companies in which E.ON Ruhrgas AG holds a stake through its subsidiaries ERI and Thüga | — | 2,032 | ||||||
Owned by third parties | — | 1,034 | ||||||
Total in Germany | 11,405 | 12,724 | ||||||
(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 AG | ||||||||||||||||
Owned or Co-owned by | Stations | Units | MW | E.ON Ruhrgas AG | MW | |||||||||||||||
E.ON Ruhrgas AG (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 | 19 | 201 | 19 | 201 | |||||||||||||||
METG (PC) (transportation) | 2 | 11 | 131 | 11 | 131 | |||||||||||||||
NETG (PC) (transportation) | 2 | 5 | 50 | 2 | 20 | |||||||||||||||
NETRA (PC) (transportation) | 2 | 5 | 42 | 3 | 20 | |||||||||||||||
TENP (PC) (transportation) | 4 | 15 | 151 | 15 | 151 | |||||||||||||||
Total in Germany | 34 | 108 | 992 | 94 | 907 | |||||||||||||||
(PC) | project company |
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E.ON Ruhrgas | E.ON Ruhrgas | |||||||||||||||||
E.ON Ruhrgas | AG’s Share in | AG’s Share in | ||||||||||||||||
AG’s Share in | Maximum | Storage Facility | ||||||||||||||||
Working | Withdrawal | or in the | Operated by | |||||||||||||||
Underground Storage | Capacity | Rate (thousand | Project Company | E.ON | ||||||||||||||
Facilities | (million m3) | m3/hour) | Owned by | % | Ruhrgas AG | |||||||||||||
Bierwang(P) | 1,360 | 1,200 | E.ON Ruhrgas AG | 100.0 | Yes | |||||||||||||
Empelde(C) | 18 | 47 | GHG-Gasspeicher Hannover Gesellschaft mbH(PC) | 13.2 | — | |||||||||||||
Epe(C) | 1,641 | 2,450 | E.ON Ruhrgas AG | 100.0 | Yes | |||||||||||||
Eschenfelden(P) | 48 | 87 | E.ON Ruhrgas AG/N-ERGIE AG | 66.7 | Yes | |||||||||||||
Etzel(C) | 375 | 987 | Etzel Gas-Lager GmbH & Co. (PC) | 74.8 | — | |||||||||||||
Hähnlein(P) | 80 | 100 | E.ON Ruhrgas AG | 100.0 | Yes | |||||||||||||
Krummhörn(C)(1) | 0 | 0 | E.ON Ruhrgas AG | 100.0 | Yes | |||||||||||||
Sandhausen(P) | 15 | 23 | E.ON Ruhrgas AG/Gasversorgung Süddeutschland GmbH | 50.0 | Yes | |||||||||||||
Stockstadt(P) | 135 | 135 | E.ON Ruhrgas AG | 100.0 | Yes | |||||||||||||
Breitbrunn(P) | 992 | (2) | 520 | RWE Dea AG/ExxonMobil Gasspeicher Deutschland GmbH(3)/ E.ON Ruhrgas AG(4) | Leased | (3) | Yes | (4) | ||||||||||
Inzenham-West(P) | 500 | 300 | RWE Dea AG | Leased | — | |||||||||||||
Total | 5,164 | 5,849 | ||||||||||||||||
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(C) | salt cavern | |
(P) | porous rock |
(PC) | project company |
(1) | Currently out of service for repairs/adjustments. | |
(2) | 970 million m3 was contractually guaranteed in 2005/06; 992 million m3 is the current working gas capacity available to E.ON Ruhrgas AG. | |
(3) | Underground section. | |
(4) | Above ground part, particularly the storage compressor station. |
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Total 2006 | Total 2005 | |||||||||||||||
Sale of Gas to: | billion kWh | % | billion kWh | % | ||||||||||||
Distributors | 318.7 | 58.0 | 323.7 | 58.3 | ||||||||||||
Municipal utilities | 163.1 | 29.7 | 160.9 | 29.0 | ||||||||||||
Industrial customers | 67.6 | 12.3 | 70.4 | 12.7 | ||||||||||||
Total | 549.4 | 100.0 | 555.0 | 100.0 | ||||||||||||
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Share held | ||||
by ERI | ||||
Shareholding | % | |||
Ferngas Nordbayern GmbH(1) | 53.10 | |||
Gas-Union GmbH(1) | 25.93 | |||
Saar Ferngas AG(1) | 20.00 |
(1) | Interest held via ERI’s wholly-owned subsidiary RGE Holding GmbH. |
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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 | |||
Rytu Skirstomieje Tinklai, Lithuania | 20.28 | |||
Mazeikiu Elektrine, Lithunania | 10.90 | |||
Inwestycyjna Spólka Energetyczna Sp.z o.o. (IRB), Poland | 50.00 | |||
Szczencińska Energetyka Cieplna Sp.z o.o. (SECS), Poland(1) | 32.92 | |||
EUROPGAS a.s., Czech Republic(2) | 50.00 | |||
E.ON Földgáz Trade ZRT, Hungary | 100.00 | |||
E.ON Földgáz Storage ZRT, Hungary | 100.00 | |||
Panrusgáz Zrt., Hungary | 50.00 | |||
Colonia-Cluj-Napoca-Energie S.R.L. (CCNE), Romania | 33.33 | |||
E.ON Ruhrgas Mittel- und Osteuropa GmbH(3) | 100.00 | |||
Nafta a.s., Slovakia | 40.45 | |||
S.C. Congaz S.A., Romania | 28.59 | |||
E.ON Servicii Romania S.R.L., Romania | 50.00 | |||
Ekopur d.o.o., Slovenia(4) | 100.00 | |||
SOTEG — Société de Transport de Gaz S.A., Luxembourg | 20.00 | |||
Holdigaz SA, Switzerland | 2.21 |
(1) | The shareholding in this company is expected to be transferred to E.DIS energia sp.z o.o. of the Central Europe market unit in 2007. | |
(2) | EUROPGAS a.s. holds 50.0 percent of SPP Bohemia a.s. and 48.18 percent of Moravské naftové doly a.s. (MND) in the Czech Republic. | |
(3) | E.ON Ruhrgas Mittel- und Osteuropa GmbH has an indirect interest of 24.50 percent in SPP, Slovakia. | |
(4) | Ekopur d.o.o. holds 6.52 percent of Geoplin d.o.o. in Slovenia. |
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Share held | ||||
by Thüga | ||||
Shareholding | % | |||
Stadtwerke Hannover Aktiengesellschaft | 24.00 | |||
N-ERGIE Aktiengesellschaft | 39.80 | |||
Mainova Aktiengesellschaft | 24.44 | |||
Gasag Berliner Gaswerke Aktiengesellschaft | 36.85 | |||
badenova AG & Co. KG | 47.30 | |||
HEAG Südhessische Energie AG (HSE) | 40.01 | |||
DREWAG-Stadtwerke Dresden GmbH | 10.00 | |||
Erdgas Südbayern GmbH | 50.00 | |||
Stadtwerke Duisburg AG | 20.00 | |||
Stadtwerke Karlsruhe GmbH | 10.00 |
Share held | ||||
by Thüga | ||||
Shareholding | % | |||
E.ON Vendita S.r.l | 100.00 | |||
Thüga Laghi S.r.l | 100.00 | |||
Thüga Mediterranea S.r.l | 100.00 | |||
Thüga Orobica S.r.l | 100.00 | |||
Thüga Padana S.r.l | 100.00 | |||
Thüga Triveneto S.r.l | 100.00 | |||
G.E.I. S.p.A. | 48.94 | |||
AMGA Azienda Multiservizi S.p.A | 21.60 |
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Total | Total | |||||||||||
2006 | 2005 | % | ||||||||||
Sources of Power | million kWh | million kWh | Change | |||||||||
Own production(1) | 35,866 | 37,255 | −3.7 | |||||||||
Purchased power from power stations in which E.ON UK has an interest of 50 percent or less | 731 | 627 | +16.6 | |||||||||
Power purchased from other suppliers(2) | 38,131 | 39,224 | −2.8 | |||||||||
Power used for operating purposes, network losses and pump storage | (971 | ) | (2,114 | ) | −54.1 | |||||||
Net power supplied(3) | 73,757 | 74,992 | −1.6 | |||||||||
Sales of Power | ||||||||||||
Mass market sales (residential customers and small and medium sized enterprises) | 37,893 | 37,314 | +1.6 | |||||||||
Industrial and commercial sales(4) | 18,371 | 22,301 | −17.6 | |||||||||
Market sales(2) | 17,493 | 15,377 | +13.8 | |||||||||
Net power sold(3) | 73,757 | 74,992 | −1.6 | |||||||||
(1) | The decrease in own production in 2006 was primarily attributable to an unplanned outage at Ratcliffe power station following an industrial accident. | |
(2) | The decline in power purchased from other suppliers and increase in market sales in 2006 compared with 2005 primarily reflected lower sales to industrial and commercial customers. | |
(3) | Excluding proprietary trading volumes. For information on proprietary trading volumes, see “Non-regulated Business — Energy Wholesale — Energy Trading.” | |
(4) | During 2006, the industrial and commercial sales business continued to focus on securing profitable customers, which resulted in lower sales volumes compared with 2005. |
Total | Total | |||||||||||
2006 | 2005 | % | ||||||||||
Sources of Gas | million kWh | million kWh | Change | |||||||||
Long-term gas supply contracts(1) | 42,918 | 48,431 | −11.4 | |||||||||
Market purchases(2) | 151,064 | 134,041 | +12.7 | |||||||||
Total gas supplied(3) | 193,982 | 182,472 | +6.3 | |||||||||
Sales and Use of Gas | ||||||||||||
Gas used for own generation(4) | 38,632 | 40,318 | −4.2 | |||||||||
Sales to industrial and commercial customers(5) | 28,663 | 32,590 | −12.0 | |||||||||
Sales to retail mass market customers(6) | 63,888 | 67,671 | −5.6 | |||||||||
Market sales(7) | 62,799 | 41,893 | +49.9 | |||||||||
Total gas used and sold(3) | 193,982 | 182,472 | +6.3 | |||||||||
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(1) | The reduction in the volume of gas purchased under long-term gas supply contracts in 2006 was primarily the result of the unavailability of gas due to be delivered under certain contracts. | |
(2) | The increase in the volume of market gas purchases was attributable to the decline in supply contract volumes as well as an increase in activities to optimize E.ON UK’s gas position. | |
(3) | Excluding proprietary trading volumes. For information on proprietary trading volumes, see “Non-regulated Business — Energy Wholesale — Energy Trading.” | |
(4) | Differences in relative margins made gas-fired generation less attractive compared to coal-fired generation, with a resulting reduction in gas used for own generation. | |
(5) | During 2006, the industrial and commercial sales business continued to focus on securing profitable customers, which resulted in lower sales volume in 2006 compared with 2005. | |
(6) | Mass market sales were lower in 2006 due to slightly warmer weather and changes in consumer behaviour. | |
(7) | Market sales in 2006 were higher than in 2005, reflecting both the decline in demand by retail customers (which freed volumes for market sales) and increased product optimization. |
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• | The U.K.’s renewables obligation required electricity retailers to source an increasing amount of the electricity they supply to retail customers from renewable sources. Under the current regime, for the period from April 1, 2006 until March 31, 2007, the renewables obligation is equal to 6.7 percent, rising to a figure of 15.4 percent by 2015/2016. The U.K. government is currently consulting on options to potentially extend targets to a maximum of 20 percent by 2020. 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. | |
• | The United Kingdom implemented the EU Emissions Trading Directive at the beginning of 2005. The scheme requires companies to have CO2 emission certificates in an amount equal to the CO2 emissions made by their fossil fuel-fired power plants with a thermal input of more than 20 MW. During 2005, the U.K. government made an initial allocation of certificates for the first phase of the scheme (2005 to 2007) to owners of generating facilities, with the total number of certificates being issued equal to less than 90 percent of emissions levels in recent years. As a result, E.ON UK bought 9.7 million tons of additional CO2 emission certificates in 2006, of which 4.7 million tons were utilized in 2006. | |
• | The application in the United Kingdom of the EU Large Combustion Plant Directive prevents coal- and oil-powered generation facilities that have not been fitted with specified sulphur oxide and oxides of nitrogen and particulate matter reduction measures from operating for more than a total of 20,000 hours starting in 2008. |
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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(1)(2) | 500 | 100.0 | 500 | 1968 | ||||||||||||
Ratcliffe U2(1)(2) | 500 | 100.0 | 500 | 1969 | ||||||||||||
Ratcliffe U3(1)(2) | 500 | 100.0 | 500 | 1969 | ||||||||||||
Ratcliffe U4(1)(2) | 500 | 100.0 | 500 | 1970 | ||||||||||||
Total | 4,910 | 4,910 | ||||||||||||||
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E.ON UK’s Share | ||||||||||||||||
Total | Attributable | |||||||||||||||
Capacity | Capacity | Start-up | ||||||||||||||
Power Plants | Net MW | % | MW | Date | ||||||||||||
Natural Gas | ||||||||||||||||
Cottam Development Centre (CDC) Module | 400 | 100.0 | 400 | 1999 | ||||||||||||
Connahs Quay U1 | 345 | 100.0 | 345 | 1996 | ||||||||||||
Connahs Quay U2 | 345 | 100.0 | 345 | 1996 | ||||||||||||
Connahs Quay U3 | 345 | 100.0 | 345 | 1996 | ||||||||||||
Connahs Quay U4 | 345 | 100.0 | 345 | 1996 | ||||||||||||
Corby Module | 401 | 50.0 | 200 | 1993 | ||||||||||||
Enfield | 392 | 100.0 | 392 | 2002 | ||||||||||||
Killingholme Mod 1 | 450 | 100.0 | 450 | 1992 | ||||||||||||
Killingholme Mod 2 | 450 | 100.0 | 450 | 1993 | ||||||||||||
Merchant CHP(3) | 218 | 100.0 | 218 | various | ||||||||||||
Total | 3,691 | 3,490 | ||||||||||||||
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 | 197 | various | 183 | various | ||||||||||||
Total | 502 | 488 | ||||||||||||||
CHP schemes(3) | 359 | 100.0 | 359 | various | ||||||||||||
Total Capacity | 10,762 | 10,547 | ||||||||||||||
(1) | Biomass material co-fired during 2006. | |
(2) | In May 2006, after a successful18-month trial,Ratcliffe-on-Soar power station was granted the necessary authorization to allow the co-firing of petroleum coke with coal at all four units. | |
(3) | The decrease in CHP capacity from 577 MW in 2005 to 359 MW in 2006 reflects the reclassification of merchant CHP plants as natural gas plants, as merchant CHP plants have no agreements with associated clients whereby the client agrees to take the power and steam. |
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• | 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 CO2 emission certificates and other environmental products, including Levy Exempt Certificates (issued in relation to the U.K. Climate Change Levy); and | |
• | Achieving portfolio optimization and risk management. |
2006 | 2005 | 2006 | 2005 | |||||||||||||
Electricity | Electricity | Gas | Gas | |||||||||||||
Proprietary Trading Volumes | billion kWh(1) | billion kWh | billion kWh(1) | billion kWh | ||||||||||||
Energy bought | 14.0 | 10.4 | 57.7 | 36.2 | ||||||||||||
Energy sold | 14.0 | 10.4 | 57.7 | 36.2 | ||||||||||||
Gross volume | 28.0 | 20.8 | 115.4 | 72.4 | ||||||||||||
(1) | The increase in traded gas and electricity volumes in 2006 was primarily attributable to higher volatility in market prices and the greater market opportunities this provided. |
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Total | Total | |||||||||||
2006 | 2005 | % | ||||||||||
Distribution of Power to | million kWh | million kWh | Change | |||||||||
Large non-domestic customers | 25,915 | 26,129 | −0.8 | |||||||||
Domestic and small non-domestic customers | 31,238 | 31,287 | −0.2 | |||||||||
Total | 57,153 | 57,416 | −0.5 | |||||||||
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Total 2006 | Total 2005 | % | ||||||||||
Sources of Power | million kWh | million kWh | Change | |||||||||
Own generation | 27,901 | 33,272 | −16.1 | |||||||||
Purchased power from jointly owned power stations | 10,173 | 10,398 | −2.2 | |||||||||
Power purchased from outside sources | 4,646 | 4,153 | +11.9 | |||||||||
Total power procured | 14,819 | 14,551 | +1.8 | |||||||||
Power used for operating purposes and network losses | (2,154 | ) | (1,905 | ) | +13.1 | |||||||
Total | 40,566 | 45,918 | −11.7 | |||||||||
Sales of Power | ||||||||||||
Residential customers | 6,618 | 6,999 | −5.4 | |||||||||
Commercial customers | 12,845 | 12,678 | +1.3 | |||||||||
Sales partners(1)/Nord Pool | 21,103 | 26,241 | −19.6 | |||||||||
Total | 40,566 | 45,918 | −11.7 | |||||||||
(1) | 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 2006 | Total 2005 | % | ||||||||||
Sources of Gas | million kWh | million kWh | Change | |||||||||
Long-term gas supply contracts | 7,156 | 7,901 | −9.4 | |||||||||
Market purchases | 400 | 256 | +56.3 | |||||||||
Total gas supplied | 7,556 | 8,157 | −7.4 | |||||||||
Sale and Use of Gas | ||||||||||||
Gas used for own generation | 1,775 | 1,235 | +43.7 | |||||||||
Sales to industrial and distribution customers | 5,006 | 6,684 | −25.1 | |||||||||
Sales to residential customers | 257 | 238 | +8.0 | |||||||||
Market sales | 518 | 0 | — | |||||||||
Total gas used and sold | 7,556 | 8,157 | −7.4 | |||||||||
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E.ON Nordic’s Share | ||||||||||||||||
Total | Attributable | |||||||||||||||
Capacity | Capacity | Start-up | ||||||||||||||
Power Plants | Net MW | % | MW | Date | ||||||||||||
Nuclear | ||||||||||||||||
Forsmark 1 | 996 | 9.3 | 93 | 1980 | ||||||||||||
Forsmark 2 | 1,006 | 9.3 | 94 | 1981 | ||||||||||||
Forsmark 3 | 1,190 | 10.8 | 128 | 1985 | ||||||||||||
Oskarshamn I | 467 | 54.5 | 255 | 1972 | ||||||||||||
Oskarshamn II | 602 | 54.5 | 328 | 1974 | ||||||||||||
Oskarshamn III | 1,153 | 54.5 | 628 | 1985 | ||||||||||||
Ringhals 1 | 843 | 29.6 | 249 | 1976 | ||||||||||||
Ringhals 2 | 867 | 29.6 | 256 | 1975 | ||||||||||||
Ringhals 3 | 957 | 29.6 | 283 | 1981 | ||||||||||||
Ringhals 4 | 908 | 29.6 | 268 | 1983 | ||||||||||||
Total | 8,989 | 2,582 | ||||||||||||||
Hydroelectric | ||||||||||||||||
Bålforsen | 88 | 100.0 | 88 | 1958 | ||||||||||||
Bergeforsen | 160 | 44.0 | 70 | 1955 | ||||||||||||
Bjurfors nedre | 78 | 100.0 | 78 | 1959 | ||||||||||||
Blåsjön | 60 | 50.0 | 30 | 1957 | ||||||||||||
Degerforsen | 63 | 100.0 | 63 | 1965 | ||||||||||||
Edensforsen | 67 | 96.5 | 65 | 1956 | ||||||||||||
Edsele | 60 | 100.0 | 60 | 1965 | ||||||||||||
Forsse | 52 | 100.0 | 52 | 1968 | ||||||||||||
Gulsele | 64 | 65.0 | 42 | 1955 | ||||||||||||
Hällby | 84 | 65.0 | 55 | 1970 | ||||||||||||
Hammarforsen | 79 | 100.0 | 79 | 1928 | ||||||||||||
Harrsele | 223 | 50.6 | 113 | 1957 | ||||||||||||
Hjälta | 178 | 100.0 | 178 | 1949 | ||||||||||||
Järnvägsforsen | 100 | 94.9 | 95 | 1975 | ||||||||||||
Korselbränna | 130 | 100.0 | 130 | 1961 | ||||||||||||
Moforsen | 135 | 100.0 | 135 | 1968 | ||||||||||||
Olden (Langan) | 112 | 100.0 | 112 | 1974 | ||||||||||||
Pengfors | 52 | 65.0 | 34 | 1954 | ||||||||||||
Ramsele | 157 | 100.0 | 157 | 1958 | ||||||||||||
Rätan | 60 | 100.0 | 60 | 1968 | ||||||||||||
Sollefteåforsen | 61 | 50.0 | 31 | 1966 | ||||||||||||
Stensjön (Hårkan) | 95 | 50.0 | 48 | 1968 |
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E.ON Nordic’s Share | ||||||||||||||||
Total | Attributable | |||||||||||||||
Capacity | Capacity | Start-up | ||||||||||||||
Power Plants | Net MW | % | MW | Date | ||||||||||||
Hydroelectric (continued) | ||||||||||||||||
Storfinnforsen | 112 | 100.0 | 112 | 1953 | ||||||||||||
Trångfors | 73 | 100.0 | 73 | 1975 | ||||||||||||
Other (<50 MW installed capacity) | 835 | n/a | 778 | n/a | ||||||||||||
Total | 3,178 | 2,738 | ||||||||||||||
Fuel Oil | ||||||||||||||||
Barsebäck GT | 84 | 100.0 | 84 | 1974 | ||||||||||||
Bråvalla | 240 | 100.0 | 240 | 1972 | ||||||||||||
Halmstad G11 | 78 | 100.0 | 78 | 1973 | ||||||||||||
Halmstad G12 | 172 | 100.0 | 172 | 1993 | ||||||||||||
Karlshamn G1 | 332 | 70.0 | 232 | 1971 | ||||||||||||
Karlshamn G2 | 332 | 70.0 | 232 | 1971 | ||||||||||||
Karlshamn G3 | 326 | 70.0 | 228 | 1973 | ||||||||||||
Karskär G4 | 125 | 50.0 | 63 | 1968 | ||||||||||||
Öresundsverket GT | 126 | 100.0 | 126 | 1971 | ||||||||||||
Oskarshamn GT | 80 | 54.5 | 44 | 1973 | ||||||||||||
Other (<50 MW installed capacity) | 77 | n/a | 41 | n/a | ||||||||||||
Total | 1,972 | 1,540 | ||||||||||||||
Natural Gas | ||||||||||||||||
Heleneholm G11, G12(CHP) | 130 | 100.0 | 130 | 1966+1970 | ||||||||||||
Wind Power | ||||||||||||||||
Sweden | 18 | n/a | 18 | n/a | ||||||||||||
Denmark | 165 | n/a | 33 | n/a | ||||||||||||
Total | 184 | 51 | ||||||||||||||
Other Power Plants | ||||||||||||||||
Abyverket G1, G2, G3(CHP) | 151 | 100.0 | 151 | 1962-1974 | ||||||||||||
Händelö (Norrköping)(CHP) | 100 | 100.0 | 100 | 1983 | ||||||||||||
Karskär G3 | 48 | 50.0 | 24 | 1968 | ||||||||||||
Total | 299 | 275 | ||||||||||||||
Shutdown | ||||||||||||||||
Barsebäck 1(Nuclear) | — | 25.8 | — | 1975 | ||||||||||||
Barsebäck 2(Nuclear) | — | 25.8 | — | 1977 | ||||||||||||
Total | 14,751 | 7,316 | ||||||||||||||
(CHP) | Combined Heat and Power Generation. |
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2006 | 2005 | |||||||||||
million | million | |||||||||||
Trading of Power | kWh | kWh | % Change | |||||||||
Power sold | 28,281 | 36,580 | −22.7 | |||||||||
Power purchased | 28,304 | 36,842 | −23.2 | |||||||||
Total | 56,585 | 73,422 | −22.9 | |||||||||
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E.ON U.S.’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 |
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E.ON U.S.’s Share | ||||||||||||||||
Total | Attributable | |||||||||||||||
Capacity | Capacity | Start-up | ||||||||||||||
Power Plants | Net MW | % | MW | Date | ||||||||||||
Hard Coal (continued) | ||||||||||||||||
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(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 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 | ||||||||||||
Zorn 1(1) | 14 | 100.0 | 14 | 1969 | ||||||||||||
Total | 2,141 | 2,141 | ||||||||||||||
Hydroelectric | ||||||||||||||||
Dix Dam(2) | 24 | 100.0 | 24 | 1925 |
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E.ON U.S.’s Share | ||||||||||||||||
Total | Attributable | |||||||||||||||
Capacity | Capacity | Start-up | ||||||||||||||
Power Plants | Net MW | % | MW | Date | ||||||||||||
Hydroelectric (continued) | ||||||||||||||||
Ohio Falls(1) | 48 | 100.0 | 48 | 1928 | ||||||||||||
Total | 72 | 72 | ||||||||||||||
Total | 7,635 | 7,507 | ||||||||||||||
Mothballed/Shutdown/Reduced | ||||||||||||||||
Green River 1(2) | 22 | 100.0 | 22 | 1950 | ||||||||||||
Green River 2(2) | 22 | 100.0 | 22 | 1950 | ||||||||||||
Paddy’s Run 12(1) | 23 | 100.0 | 23 | 1968 | ||||||||||||
Tyrone Unit 1(2) | 27 | 100.0 | 27 | 1947 | ||||||||||||
Tyrone Unit 2(2) | 31 | 100.0 | 31 | 1948 | ||||||||||||
Waterside 7(1) | 11 | 100.0 | 11 | 1964 | ||||||||||||
Waterside 8(1) | 11 | 100.0 | 11 | 1964 | ||||||||||||
Total | 147 | 147 | ||||||||||||||
(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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Total 2006 | Total 2005 | |||||||
Sales of Electric Power to | million kWh | million kWh | ||||||
Residential | 10,330 | 10,864 | ||||||
Commercial and industrial customers | 16,628 | 16,684 | ||||||
Municipals | 1,978 | 2,014 | ||||||
Other retail | 3,703 | 3,720 | ||||||
Off-system sales | 2,650 | 4,434 | ||||||
Total | 35,289 | 37,716 | ||||||
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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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• | 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. |
• | closer cooperation between national regulatory authorities; | |
• | strict control of unbundling fulfillment, especially in the case of activities in several member states; |
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• | ad hoc and transparent publication of non-confidential information; | |
• | improvement of third party access at access points; | |
• | improved environment for cross-border trading; and | |
• | creation of regional gas markets. |
• | A true internal energy market: The European Commission recommends a clearer separation of energy production from energy transmission and distribution, where the EU has a strong preference for ownership unbundling,i.e.the separation of ownership of the electricity and gas networks and the other commercial activities of the utilities. Another alternative that does not require ownership unbundling is the use of an independent system operator to operate the electricity and gas networks. The European Commission also calls for stronger independent regulatory control, in particular for cross border issues. To facilitate European-wide energy trading, the European Commission considers it necessary to establish a new single regulatory body at the EU level or, at a minimum, a European network of independent regulators that would take European interests into account and have the appropriate involvement of the Commission. | |
• | Greenhouse gas emissions: The European Commission believes that when international agreement on greenhouse gas emissions for the post-2012 timeframe is reached, the EU should aim to achieve a 20 percent cut in greenhouse gas emissions compared to 1990 levels by 2020 at the latest. Should other countries initiate similar plans to combat climate change, the European Commission has expressed the possibility of a 30 percent abatement target. | |
• | Energy efficiency: The European Commission’s objective is to save 20 percent of total primary energy consumption by 2020 compared to 1990 levels. Potential methods include an efficient use of fuels in vehicles for transport, tougher standards and better labeling for appliances, improved energy performance of the EU’s existing buildings, and improved efficiency of heat and electricity generation, transmission and distribution. |
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• | Fixed charges for renewable energies: Charges for renewable energies are fixed. For wind turbines coming online in 2006, the charge is fixed at 8.36 €cent/kWh. This charge 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 charge is reduced to 5.28 €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 charge is reduced by two percent for new wind turbines every year. For wind turbines coming online in 2007, this means a reduction to 8.19 €cent/kWh and 5.17 €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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• | CHP plants that were commissioned before 1990 received 1.53 €cent/kWh in 2002 and 2003, 1.38 €cent/kWh in 2004 and 2005, and 0.97 €cent/kWh in 2006; | |
• | CHP plants that were commissioned after 1990 received 1.53 €cent/kWh in 2002 and 2003, 1.38 €cent/kWh in 2004 and 2005, and 1.23 €cent/kWh in 2006, and will receive 1.23 €cent/kWh in 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, 2003 and 2004, 1.69 €cent/kWh in 2005, and 1.69 €cent/kWh in 2006, and will receive 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, 2.4 €cent/kWh in 2004 and 2005, and 2.25 €cent/kWh in 2006, and will receive 2.25 €cent/kWh in 2007, 2.1 €cent/kWh in 2008 and 2009, and 1.94 €cent/kWh in 2010. |
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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 plc (energy) | U.K. | 100.0 | % | 100.0 | % | |||||||
E.ON Nordic AB (energy) | Sweden | 100.0 | % | 100.0 | % | |||||||
E.ON U.S. LLC (energy) | U.S.A. | 100.0 | % | 100.0 | % |
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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 forwards 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 internal models that use fundamental data and take into account individual contract details and variables. |
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• | on the one hand, the cost of return transportation and temporary storage of nuclear waste from the reprocessing (including interim storage containers, central temporary storage, conditioning and procurement of final storage containers) based primarily on existing contracts, and | |
• | on the other hand, costs of so-called “permanent storage” of used fuel rods which primarily include: |
• | contractual costs for procuring intermediate containers and intermediateon-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. |
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• | SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities — Including an amendment of FASB Statement No. 115; | |
• | SFAS No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans — an amendment of FASB Statements No. 87, 88, 106, and 132(R); | |
• | FIN No. 48, Accounting for Uncertainty in Income Taxes; | |
• | SFAS No. 157, Fair Value Measurements; and | |
• | Staff Accounting Bulletin (“SAB”) No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements. |
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2006 | 2005 | 2004 | ||||||||||||||||||||||
Adjusted | Adjusted | Adjusted | ||||||||||||||||||||||
Sales | EBIT | Sales | EBIT | Sales | EBIT | |||||||||||||||||||
(€ in millions) | ||||||||||||||||||||||||
Central Europe(1) | 28,380 | 4,168 | 24,295 | 3,930 | 20,752 | 3,602 | ||||||||||||||||||
Pan-European Gas(2)(3) | 24,987 | 2,106 | 17,914 | 1,536 | 13,227 | 1,344 | ||||||||||||||||||
U.K. | 12,569 | 1,229 | 10,176 | 963 | 8,490 | 1,017 | ||||||||||||||||||
Nordic(2)(4) | 3,204 | 619 | 3,213 | 766 | 3,094 | 661 | ||||||||||||||||||
U.S. Midwest(2) | 1,947 | 391 | 2,045 | 365 | 1,718 | 354 | ||||||||||||||||||
Corporate Center(2)(5) | (3,328 | ) | (416 | ) | (1,502 | ) | (399 | ) | (792 | ) | (338 | ) | ||||||||||||
Core Energy Business | 67,759 | 8,097 | 56,141 | 7,161 | 46,489 | 6,640 | ||||||||||||||||||
Other Activities(2)(6) | — | 53 | — | 132 | — | 107 | ||||||||||||||||||
Total | 67,759 | 8,150 | 56,141 | 7,293 | 46,489 | 6,747 | ||||||||||||||||||
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(1) | Sales include energy taxes of €1,124 million in 2006, €1,049 million in 2005 and €1,051 million in 2004. | |
(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) | Sales include natural gas and electricity taxes of €2,061 million in 2006, €3,110 million in 2005 and €2,923 million in 2004. | |
(4) | Sales include electricity and natural gas taxes of €377 million in 2006, €382 million in 2005 and €376 million in 2004. | |
(5) | Includes primarily the parent company and effects from consolidation (including the elimination of intersegment sales), as well as the results of its remaining telecommunications interests, as explained above. Sales between companies in the same market unit are eliminated in calculating sales on the market unit level. | |
(6) | Includes adjusted EBIT of Degussa. |
2006 | 2005 | 2004 | ||||||||||
(€ in millions) | ||||||||||||
Adjusted EBIT | 8,150 | 7,293 | 6,747 | |||||||||
Adjusted interest income, net | (1,081 | ) | (1,027 | ) | (1,032 | ) | ||||||
Net book gains | 1,205 | 491 | 589 | |||||||||
Cost-management and restructuring expenses | — | (29 | ) | (100 | ) | |||||||
Other non-operating results | (3,141 | ) | 424 | 128 | ||||||||
Income/(loss) from continuing operations before income taxes and minority interests | 5,133 | 7,152 | 6,332 | |||||||||
Income taxes | 323 | (2,261 | ) | (1,852 | ) | |||||||
Minority interests | (526 | ) | (536 | ) | (469 | ) | ||||||
Income/(loss) from continuing operations | 4,930 | 4,355 | 4,011 | |||||||||
Income/(loss) from discontinued operations | 127 | 3,059 | 328 | |||||||||
Cumulative effect of change in accounting principles | — | (7 | ) | — | ||||||||
Net income | 5,057 | 7,407 | 4,339 | |||||||||
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2006 | 2005 | |||||||
(€ in millions) | ||||||||
Interest income and similar expenses (net) as shown in Note 6 of the Notes to Consolidated Financial Statements | (687 | ) | (736 | ) | ||||
(+) Non-operating interest income, net(1) | (5 | ) | (39 | ) | ||||
(–) Interest portion of long-term provisions | 389 | 252 | ||||||
Adjusted interest income, net | (1,081 | ) | (1,027 | ) | ||||
(1) | This net figure is calculated by adding in non-operating interest expense and subtracting non-operating interest income. |
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Percent | ||||||||||||
2006 | 2005 | Change | ||||||||||
(€ in millions) | ||||||||||||
Central Europe West Power | 18,885 | 16,945 | +11.4 | |||||||||
Central Europe West Gas | 4,371 | 3,463 | +26.2 | |||||||||
Central Europe East | 3,469 | 2,618 | +32.5 | |||||||||
Other/Consolidation | 531 | 220 | +141.4 | |||||||||
Total | 27,256 | 23,246 | +17.3 | |||||||||
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Percent | ||||||||||||
2006 | 2005 | Change | ||||||||||
(€ in millions) | ||||||||||||
Central Europe West Power | 3,550 | 3,389 | +4.8 | |||||||||
Central Europe West Gas | 272 | 307 | −11.4 | |||||||||
Central Europe East | 269 | 237 | +13.5 | |||||||||
Other/Consolidation | 77 | (3 | ) | — | ||||||||
Total | 4,168 | 3,930 | +6.1 | |||||||||
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Percent | ||||||||||||
2006 | 2005 | Change | ||||||||||
(€ in millions) | ||||||||||||
Up-/Midstream | 18,868 | 13,380 | +41.0 | |||||||||
Downstream | 4,773 | 1,848 | +158.3 | |||||||||
Other/Consolidation | (715 | ) | (424 | ) | −68.6 | |||||||
Total | 22,926 | 14,804 | +54.9 | |||||||||
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Percent | ||||||||||||
2006 | 2005 | Change | ||||||||||
(€ in millions) | ||||||||||||
Up-/Midstream | 1,684 | 988 | +70.4 | |||||||||
Downstream Shareholdings | 431 | 551 | −21.8 | |||||||||
Other/Consolidation | (9 | ) | (3 | ) | −200.0 | |||||||
Total | 2,106 | 1,536 | +37.1 | |||||||||
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Percent | ||||||||||||
2006 | 2005 | Change | ||||||||||
(€ in millions) | ||||||||||||
Non-regulated Business | 12,081 | 9,553 | +26.5 | |||||||||
Regulated Business | 856 | 813 | +5.3 | |||||||||
Other/Consolidation | (368 | ) | (190 | ) | −93.7 | |||||||
Total | 12,569 | 10,176 | +23.5 | |||||||||
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Percent | ||||||||||||
2006 | 2005 | Change | ||||||||||
(€ in millions) | ||||||||||||
Non-regulated Business | 869 | 540 | +60.9 | |||||||||
Regulated Business | 488 | 452 | +8.0 | |||||||||
Other/Consolidation | (128 | ) | (29 | ) | −341.4 | |||||||
Total | 1,229 | 963 | +27.6 | |||||||||
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Percent | ||||||||||||
2006 | 2005 | Change | ||||||||||
(€ in millions) | ||||||||||||
Non-regulated Business | 2,119 | 2,247 | −5.7 | |||||||||
Regulated Business | 725 | 850 | −14.7 | |||||||||
Other/Consolidation | (17 | ) | (266 | ) | +93.6 | |||||||
Total | 2,827 | 2,831 | — | |||||||||
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Percent | ||||||||||||
2006 | 2005 | Change | ||||||||||
(€ in millions) | ||||||||||||
Non-regulated Business | 448 | 541 | −17.2 | |||||||||
Regulated Business | 200 | 244 | −18.0 | |||||||||
Other/Consolidation | (29 | ) | (19 | ) | −52.6 | |||||||
Total | 619 | 766 | −19.2 | |||||||||
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Percent | ||||||||||||
2006 | 2005 | Change | ||||||||||
(€ in millions) | ||||||||||||
Regulated Business | 1,887 | 1,965 | −4.0 | |||||||||
Non-regulated Business | 60 | 80 | −25.0 | |||||||||
Total | 1,947 | 2,045 | −4.8 | |||||||||
Percent | ||||||||||||
2006 | 2005 | Change | ||||||||||
(€ in millions) | ||||||||||||
Regulated Business | 387 | 351 | +10.3 | |||||||||
Non-regulated Business | 4 | 14 | −71.4 | |||||||||
Total | 391 | 365 | +7.1 | |||||||||
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2005 | 2004 | |||||||
(€ in millions) | ||||||||
Interest income and similar expenses (net) as shown in Note 6 of the Notes to Consolidated Financial Statements | (736 | ) | (1,063 | ) | ||||
(+) Non-operating interest income, net(1) | (39 | ) | 151 | |||||
(−) Interest portion of long-term provisions | 252 | 120 | ||||||
Adjusted interest income, net | (1,027 | ) | (1,032 | ) | ||||
(1) | This net figure is calculated by adding in non-operating interest expense and subtracting non-operating interest income. |
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Percent | ||||||||||||
2005 | 2004 | Change | ||||||||||
(€ in millions) | ||||||||||||
Central Europe West Power | 16,945 | 14,597 | +16.1 | |||||||||
Central Europe West Gas | 3,463 | 2,979 | +16.2 | |||||||||
Central Europe East | 2,618 | 1,877 | +39.5 | |||||||||
Other/Consolidation | 220 | 248 | −11.3 | |||||||||
Total | 23,246 | 19,701 | +18.0 | |||||||||
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Percent | ||||||||||||
2005 | 2004 | Change | ||||||||||
(€ in millions) | ||||||||||||
Central Europe West Power | 3,389 | 2,996 | +13.1 | |||||||||
Central Europe West Gas | 307 | 315 | −2.5 | |||||||||
Central Europe East | 237 | 235 | +0.9 | |||||||||
Other/Consolidation | (3 | ) | 56 | — | ||||||||
Total | 3,930 | 3,602 | +9.1 | |||||||||
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Percent | ||||||||||||
2005 | 2004 | Change | ||||||||||
(€ in millions) | ||||||||||||
Up-/Midstream | 13,380 | 9,274 | +44.3 | |||||||||
Downstream | 1,848 | 1,358 | +36.1 | |||||||||
Other/Consolidation | (424 | ) | (328 | ) | −29.3 | |||||||
Total | 14,804 | 10,304 | +43.7 | |||||||||
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Percent | ||||||||||||
2005 | 2004 | Change | ||||||||||
(€ in millions) | ||||||||||||
Up-/Midstream | 988 | 862 | +14.6 | |||||||||
Downstream Shareholdings | 551 | 486 | +13.4 | |||||||||
Other/Consolidation | (3 | ) | (4 | ) | +25.0 | |||||||
Total | 1,536 | 1,344 | +14.3 | |||||||||
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Percent | ||||||||||||
2005 | 2004 | Change | ||||||||||
(€ in millions) | ||||||||||||
Non-regulated Business | 9,553 | 7,788 | +22.7 | |||||||||
Regulated Business | 813 | 941 | −13.6 | |||||||||
Other/Consolidation | (190 | ) | (239 | ) | +20.5 | |||||||
Total | 10,176 | 8,490 | +19.9 | |||||||||
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Percent | ||||||||||||
2005 | 2004 | Change | ||||||||||
(€ in millions) | ||||||||||||
Non-regulated Business | 661 | 626 | +5.6 | |||||||||
Regulated Business | 452 | 446 | +1.4 | |||||||||
Other/Consolidation | (150 | ) | (55 | ) | −172.7 | |||||||
Total | 963 | 1,017 | −5.3 | |||||||||
Percent | ||||||||||||
2005 | 2004 | Change | ||||||||||
(€ in millions) | ||||||||||||
Non-regulated Business | 2,247 | 2,107 | +6.6 | |||||||||
Regulated Business | 850 | 828 | +2.7 | |||||||||
Other/Consolidation | (266 | ) | (217 | ) | −22.6 | |||||||
Total | 2,831 | 2,718 | +4.2 | |||||||||
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Percent | ||||||||||||
2005 | 2004 | Change | ||||||||||
(€ in millions) | ||||||||||||
Non-regulated Business | 541 | 444 | +21.8 | |||||||||
Regulated Business | 244 | 215 | +13.5 | |||||||||
Other/Consolidation | (19 | ) | 2 | — | ||||||||
Total | 766 | 661 | +15.9 | |||||||||
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Percent | ||||||||||||
2005 | 2004 | Change | ||||||||||
(€ in millions) | ||||||||||||
Regulated Business | 1,965 | 1,643 | +19.6 | |||||||||
Non-regulated Business | 80 | 75 | +6.7 | |||||||||
Total | 2,045 | 1,718 | +19.0 | |||||||||
Percent | ||||||||||||
2005 | 2004 | Change | ||||||||||
(€ in millions) | ||||||||||||
Regulated Business | 351 | 339 | +3.5 | |||||||||
Non-regulated Business | 14 | 15 | −6.7 | |||||||||
Total | 365 | 354 | +3.1 | |||||||||
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2006 | 2005 | 2004 | ||||||||||||||||||||||
Cash from | Capital | Cash from | Capital | Cash from | Capital | |||||||||||||||||||
Operations | Expenditures | Operations | Expenditures | Operations | Expenditures | |||||||||||||||||||
(€ in millions) | ||||||||||||||||||||||||
Central Europe | 3,825 | 2,416 | 3,020 | 1,981 | 2,938 | 2,273 | ||||||||||||||||||
Pan-European Gas(3) | 589 | 880 | 1,999 | 523 | 903 | 610 | ||||||||||||||||||
U.K. | 749 | 863 | 101 | 926 | 633 | 503 | ||||||||||||||||||
Nordic(3) | 715 | 631 | 689 | 394 | 893 | 666 | ||||||||||||||||||
U.S. Midwest(3) | 381 | 398 | 214 | 227 | 152 | 247 | ||||||||||||||||||
Corporate Center(3) | 935 | (27 | ) | 521 | (110 | ) | 257 | 478 | ||||||||||||||||
Total | 7,194 | 5,161 | 6,544 | 3,941 | 5,776 | 4,777 | ||||||||||||||||||
(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 investments in other financial assets. | |
(3) | 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. |
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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. |
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(€ in millions)
Fair value of contracts outstanding at the beginning of the period | 1,474.3 | |||
Change to scope of consolidation | (8.4 | ) | ||
Contracts realized or otherwise settled during the period | (609.7 | ) | ||
Fair value of new contracts entered into during the period | (646.8 | ) | ||
Changes in fair values attributable to changes in valuation techniques and assumptions | — | |||
Other changes in fair values | (1,605.2 | ) | ||
Fair value of contracts outstanding at the end of the period | (1,395.8 | ) | ||
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Fair Value of Contracts at Period-End | ||||||||||||||||||||
Maturity | Maturity in | |||||||||||||||||||
less than | Maturity | Maturity | Excess of | Total Fair | ||||||||||||||||
Source of Fair Value | 1 Year | 1-3 Years | 4-5 Years | 5 Years | Value | |||||||||||||||
(€ in millions) | ||||||||||||||||||||
Prices actively quoted | (786.7 | ) | (148.0 | ) | (16.5 | ) | 12.7 | (938.5 | ) | |||||||||||
Prices provided by other external sources | (1.2 | ) | (0.1 | ) | — | — | (1.3 | ) | ||||||||||||
Prices based on models and other valuation methods | (341.2 | ) | (195.8 | ) | 70.5 | 10.5 | (456.0 | ) |
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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(1)(2) | 17,753 | 3,978 | 5,446 | 1,862 | 6,467 | |||||||||||||||
Capital Lease Obligations | 175 | 46 | 56 | 20 | 53 | |||||||||||||||
Operating Leases | 645 | 159 | 175 | 127 | 184 | |||||||||||||||
Purchase Obligations | 241,443 | 28,473 | 43,575 | 41,214 | 128,181 | |||||||||||||||
Asset Retirement Obligations | 9,948 | 460 | 312 | 253 | 8,923 | |||||||||||||||
Pension Payments | 9,790 | 883 | 1,847 | 1,943 | 5,117 | |||||||||||||||
Other Long-Term Obligations | 3,888 | 2,726 | 992 | 5 | 165 | |||||||||||||||
Total Contractual Obligations | 283,642 | 36,725 | 52,403 | 45,424 | 149,090 | |||||||||||||||
(1) | Excludes capital lease obligations. | |
(2) | Includes estimated interest payment obligations for these liabilities. |
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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)* Chairman of the Supervisory Board | 68 | Retired Co-Chief Executive Officer of E.ON AG; formerly Chairman of the Board of Management and Chief Executive Officer of VEBA AG | 2003 | |||
Supervisory Board Memberships/Directorships: | ||||||
Deutsche Bank AG, Deutsche Lufthansa AG, Hochtief AG, IKB Deutsche Industriebank AG (Chairman), Münchener Rückversicherungs-Gesellschaft AG, Henkel KGaA(4) | ||||||
Hubertus Schmoldt(2)(3)(5) Deputy Chairman of the Supervisory Board | 61 | Chairman of the Board of Management of Industriegewerkschaft Bergbau, Chemie, Energie | 1996 | |||
Supervisory Board Memberships/Directorships: | ||||||
Bayer AG, DOW Olefinverbund GmbH, Deutsche BP AG, RAG Aktiengesellschaft, RAG Beteiligungs-AG | ||||||
Dr. Karl-Hermann Baumann(1)* Member of the Supervisory Board | 71 | Formerly Chairman of the Supervisory Board of Siemens AG; formerly member of the Board of Management of Siemens AG | 2000 | |||
Supervisory Board Memberships/Directorships: | ||||||
Linde AG, Schering AG | ||||||
Dr. Rolf-E. Breuer Member of the Supervisory Board | 69 | Formerly Chairman of the Supervisory Board of Deutsche Bank AG; formerly Spokesman of the Board of Management of Deutsche Bank AG | 1997 | |||
Supervisory Board Memberships/Directorships: | ||||||
Landwirtschaftliche Rentenbank(4) | ||||||
Dr. Gerhard Cromme(3) Member of the Supervisory Board | 63 | Chairman of the Supervisory Board of ThyssenKrupp AG | 1993 | |||
Supervisory Board Memberships/Directorships: | ||||||
Allianz SE, Axel Springer AG, Deutsche Lufthansa AG, Siemens AG, Suez S.A.(4), BNP Paribas S.A.(4), Compagnie de Saint-Gobain(4) |
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Year First | ||||||
Name and Position Held | Age | Principal Occupation | Elected | |||
Gabriele Gratz(5)(6) Member of the Supervisory Board | 58 | Chairwoman of the Works Council of E.ON Ruhrgas AG | 2005 | |||
Supervisory Board Memberships/Directorships: | ||||||
E.ON Ruhrgas AG | ||||||
Wolf-Rüdiger Hinrichsen(2)(3)(5) Member of the Supervisory Board | 51 | Vice-Chairman of the Group Workers’ Council of E.ON AG | 1998 | |||
Ulrich Hocker Member of the Supervisory Board | 56 | General Manager of the German Investor Protection Association | 1998 | |||
Supervisory Board Memberships/Directorships: | ||||||
Feri Finance AG, Karstadt Quelle AG, ThyssenKrupp Stainless AG, Gartmore SICAV(4), Phoenix Mecano AG(4) (Chairman) | ||||||
Eva Kirchhof(5) Member of the Supervisory Board | 49 | Diploma-Physicist, E.ON Sales and Trading GmbH | 2002 | |||
Seppel Kraus(5) Member of the Supervisory Board | 53 | Secretary of Labor Union Supervisory Board Memberships/Directorships: Wacker-Chemie AG, Novartis Deutschland GmbH, Hexal AG | 2003 | |||
Prof. Dr. Ulrich Lehner Member of the Supervisory Board | 60 | President and Chief Executive Officer, Henkel KGaA | 2003 | |||
Supervisory Board Memberships/Directorships: HSBC Trinkaus & Burkhardt KGaA, Ecolab Inc.(4), Novartis AG(4), The DIAL Corporation(4) (Chairman) | ||||||
Dr. Klaus Liesen Member of the Supervisory Board | 75 | Honorary Chairman of the Supervisory Board of E.ON Ruhrgas AG and of Volkswagen AG; formerly Chairman of the Supervisory Board of E.ON Ruhrgas AG | 1991 | |||
Erhard Ott(5) Member of the Supervisory Board | 53 | Member of the Board of Management, Unified Services Sector Union (ver.di) | 2005 | |||
Ulrich Otte(1)(5)(6) Member of the Supervisory Board | 57 | Chairman of the Central Works Council, E.ON Energie AG | 2001 | |||
Hans Prüfer(5)(7) Member of the Supervisory Board | 57 | Chairman of the Group Works Council, E.ON AG | 2006 | |||
Supervisory Board Memberships/Directorships: | ||||||
E.ON Energie AG | ||||||
Klaus-Dieter Raschke(1)(5) Member of the Supervisory Board | 53 | Chairman of the Combined Works Council, E.ON Energie AG | 2002 | |||
Supervisory Board Memberships/Directorships: | ||||||
E.ON Energie AG, E.ON Kernkraft GmbH | ||||||
Dr. Henning Schulte-Noelle(2) Member of the Supervisory Board | 64 | Chairman of the Supervisory Board of Allianz SE; formerly Chairman of the Board of Management of Allianz SE | 1993 | |||
Supervisory Board Memberships/Directorships: | ||||||
Siemens AG, ThyssenKrupp AG | ||||||
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Year First | ||||||
Name and Position Held | Age | Principal Occupation | Elected | |||
Prof. Dr. Wilhelm Simson Member of the Supervisory Board | 68 | Retired Co-Chief Executive Officer of E.ON AG; formerly Chairman of the Board of Management and Chief Executive Officer of VIAG AG | 2003 | |||
Supervisory Board Memberships/Directorships: | ||||||
Frankfurter Allgemeine Zeitung GmbH, Merck KGaA(4) (Chairman), Freudenberg KG (4), Jungbunzlauer Holding AG(4), E. Merck OHG(4), Hochtief AG | ||||||
Gerhard Skupke(5) Member of the Supervisory Board | 57 | Chairman of the Central Works Council, E.ON edis AG | 2003 | |||
Supervisory Board Memberships/Directorships: | ||||||
E.ON edis AG | ||||||
Dr. Georg Freiherr von Waldenfels Member of the Supervisory Board | 62 | Former Minister of Finance of the State of Bavaria; Attorney | 2003 | |||
Supervisory Board Memberships/Directorships: | ||||||
Georgsmarienhütte Holding GmbH, GI Ventures AG (Chairman) |
* | 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. | |
(6) | Ulrich Otte was a member of E.ON AG’s Supervisory Board until December 31, 2006. He was elected by the employees and a member of E.ON AG’s Audit Committee. On January 4, 2007, Hans Wollitzer, Chairman of the Central Works Council of E.ON Energie AG, was publicly appointed as his successor. On March 6, 2007, Gabriele Gratz was elected as a new member of E.ON AG’s Audit Committee, replacing Ulrich Otte. | |
(7) | Member since July 25, 2006. Hans Prüfer was elected to the position held prior to that date by Günter Adam. |
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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 | 58 | 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 SE, Metro AG, Bertelsmann AG, RAG Aktiengesellschaft (Chairman), RAG Beteiligungs-AG (Chairman), E.ON Nordic AB(2)(3) (Chairman), E.ON UK plc(2)(3) (Chairman), E.ON US Investments Corp.(2)(3) (Chairman), E.ON Sverige AB(2)(3) (Chairman) | ||||||||||||||
Dr. Burckhard Bergmann Member of the Board of Management | 63 | Upstream Business, Market Management, Group Regulatory Management; Chairman of the Board of Management and Chief Executive Officer of E.ON Ruhrgas AG | 2003 | 2008 | ||||||||||
Supervisory Board Memberships/Directorships: | ||||||||||||||
Thüga AG(1) (Chairman), Allianz Lebensversicherungs-AG, MAN Ferrostaal AG, Jaeger Akustik GmbH & Co.(2) (Chairman), Accumulatorenwerke Hoppecke Carl Zoellner & Sohn GmbH(2), OAO Gazprom(2), E.ON Ruhrgas E & P GmbH(2)(3) (Chairman), Nord Stream AG(2), E.ON Gastransport AG & Co. KG(2)(3) (Chairman), E.ON UK plc(2)(3), ZAO Gerosgaz(2)(3) (Chairman; in alternation with a representative of the foreign partner) | ||||||||||||||
Christoph Dänzer-Vanotti(4) Member of the Board of Management | 51 | Chief Human Resources Officer; Labor Relations, Personnel, Infrastructure and Services, Procurement, Organization; formerly Member of the Board of Management of E.ON Ruhrgas AG | 2006 | 2009 | ||||||||||
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Year First | Year Current | |||||||||||||
Name and Title | Age | Business Activities and Experience | Appointed | Term Expires | ||||||||||
Lutz Feldmann(5) Member of the Board of Management | 49 | Corporate Development/New Markets; formerly Group Vice President Marketing of BP p.l.c. | 2006 | 2009 | ||||||||||
Dr. Hans Michael Gaul(6) Member of the Board of Management | 64 | Controlling/Corporate Planning, M&A, Legal Affairs; formerly Member of the Board of Management of VEBA AG | 1990 | 2007 | ||||||||||
Supervisory Board Memberships/Directorships: | ||||||||||||||
Degussa AG, E.ON Energie AG(1), E.ON Ruhrgas AG(1), Allianz Versicherungs-AG, DKV AG, RAG Aktiengesellschaft, STEAG AG, RAG Beteiligungs-AG, Volkswagen AG, E.ON Nordic AB(2)(3), E.ON Sverige AB(2)(3) | ||||||||||||||
Dr. Marcus Schenck(4) Member of the Board of Management | 41 | Chief Financial Officer; Finance, Accounting, Taxes, IT; formerly Managing Director and Partner of Goldman Sachs & Co. oHG | 2006 | 2009 | ||||||||||
Dr. Johannes Teyssen Member of the Board of Management(7) | 47 | 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: | ||||||||||||||
E.ON Bayern AG(1) (Chairman), E.ON Hanse AG(1) (Chairman), Salzgitter AG, E.ON Nordic AB(2)(3), E.ON Sverige AB(2)(3) |
(1) | Group mandate. | |
(2) | Membership in comparable domestic or foreign supervisory body of a commercial enterprise. | |
(3) | Other Group mandate (membership in comparable domestic or foreign supervisory body of a commercial enterprise). | |
(4) | Member since December 1, 2006. Dr. Marcus Schenck was appointed to the position held prior to that date by Dr. Erhard Schipporeit; Christoph Dänzer-Vanotti was appointed to that formerly held by Dr. Manfred Krüper. | |
(5) | Member since December 1, 2006. Lutz Feldmann was appointed to the new position. | |
(6) | On April 1, 2007, Dr. Hans Michael Gaul will retire from the Board. | |
(7) | Dr. Johannes Teyssen will become Chief Operating Officer as of April 1, 2007. |
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Variable | Variable | |||||||||||||||||||
Fixed | Short-Term | Long-Term | Compensation | |||||||||||||||||
Compensation | Compensation | Compensation | for Supervisory | |||||||||||||||||
for Service on | for Service on | for Service on | Board | |||||||||||||||||
E.ON’s | E.ON’s | E.ON’s | Memberships | |||||||||||||||||
Supervisory | Supervisory | Supervisory | at Affiliated | |||||||||||||||||
Name | Board | Board | Board | Companies | Total | |||||||||||||||
(€) | ||||||||||||||||||||
Ulrich Hartmann | 165,000 | 112,125 | 130,410 | 0 | 407,535 | |||||||||||||||
Hubertus Schmoldt | 110,000 | 74,750 | 86,940 | 0 | 271,690 | |||||||||||||||
Günter Adam (until June 30, 2006) | 27,500 | 18,687 | 21,735 | 0 | 67,922 | |||||||||||||||
Dr. Karl-Hermann Baumann | 110,000 | 74,750 | 86,940 | 0 | 271,690 | |||||||||||||||
Dr. Rolf-E. Breuer | 55,000 | 37,375 | 43,470 | 0 | 135,845 | |||||||||||||||
Dr. Gerhard Cromme | 82,500 | 56,063 | 65,205 | 33,288 | 237,056 | |||||||||||||||
Gabriele Gratz | 55,000 | 37,375 | 43,470 | 102,000 | 237,845 | |||||||||||||||
Wolf-Rüdiger Hinrichsen | 82,500 | 56,063 | 65,205 | 0 | 203,768 | |||||||||||||||
Ulrich Hocker | 55,000 | 37,375 | 43,470 | 0 | 135,845 | |||||||||||||||
Eva Kirchhof | 55,000 | 37,375 | 43,470 | 0 | 135,845 | |||||||||||||||
Seppel Kraus | 55,000 | 37,375 | 43,470 | 0 | 135,845 | |||||||||||||||
Prof. Dr. Ulrich Lehner | 55,000 | 37,375 | 43,470 | 0 | 135,845 | |||||||||||||||
Dr. Klaus Liesen | 55,000 | 37,375 | 43,470 | 0 | 135,845 | |||||||||||||||
Erhard Ott | 55,000 | 37,375 | 43,470 | 0 | 135,845 | |||||||||||||||
Ulrich Otte | 82,500 | 56,063 | 65,205 | 57,074 | 260,842 | |||||||||||||||
Hans Prüfer (from July 25, 2006) | 27,500 | 18,687 | 21,735 | 18,000 | 85,922 | |||||||||||||||
Klaus-Dieter Raschke | 82,500 | 56,063 | 65,205 | 53,230 | 256,998 | |||||||||||||||
Dr. Henning Schulte-Noelle | 82,500 | 56,063 | 65,205 | 0 | 203,768 | |||||||||||||||
Prof. Dr. Wilhelm Simson | 55,000 | 37,375 | 43,470 | 0 | 135,845 | |||||||||||||||
Gerhard Skupke | 55,000 | 37,375 | 43,470 | 16,300 | 152,145 | |||||||||||||||
Dr. Georg Freiherr von Waldenfels | 55,000 | 37,375 | 43,470 | 0 | 135,845 | |||||||||||||||
Subtotal | 1,457,500 | 990,439 | 1,151,955 | 279,892 | 3,879,786 | |||||||||||||||
Attendance fees and meeting-related reimbursements(1) | 172,768 | |||||||||||||||||||
Total | 1,457,500 | 990,439 | 1,151,955 | 279,892 | 4,052,554 | |||||||||||||||
(1) | Attendance fees and meeting-related reimbursements are given as an aggregate for all Supervisory Board members. |
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Current pension entitlement at | Additions to provisions | |||||||||||||||
December 31, 2006 | for pensions in 2006 | |||||||||||||||
As a | ||||||||||||||||
percentage of | ||||||||||||||||
annual base | Thereof | |||||||||||||||
Name | salary | interest cost | ||||||||||||||
(%) | (€) | (€) | (€) | |||||||||||||
Dr. Wulf H. Bernotat | 70 | 868,000 | 1,462,762 | 381,956 | ||||||||||||
Dr. Burckhard Bergmann | — | 728,500 | 918,961 | 539,536 | ||||||||||||
Christoph Dänzer-Vanotti (from December 1, 2006)(1) | 50 | 300,000 | 69,563 | 231 | ||||||||||||
Lutz Feldmann (from December 1, 2006)(1) | 50 | 300,000 | 20,846 | 69 | ||||||||||||
Dr. Hans Michael Gaul | 75 | 562,500 | 669,008 | 397,514 | ||||||||||||
Dr. Manfred Krüper (until November 30, 2006)(2) | — | — | 691,085 | 355,312 | ||||||||||||
Dr. Marcus Schenck (from December 1, 2006)(1) | 50 | 300,000 | 34,245 | 114 | ||||||||||||
Dr. Erhard Schipporeit (until November 30, 2006)(3) | 75 | 562,500 | 1,042,739 | 332,170 | ||||||||||||
Dr. Johannes Teyssen | 70 | 525,000 | 617,863 | 245,552 |
(1) | Pension entitlement not yet vested. | |
(2) | Entered retirement on December 1, 2006. | |
(3) | Will enter retirement in February 2009. |
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Fair Value of | ||||||||||||||||||||||||
Performance | Performance | |||||||||||||||||||||||
Rights granted in | Rights Granted | |||||||||||||||||||||||
Fixed Annual | Annual | Other | 1st Tranche | in 1st Tranche | ||||||||||||||||||||
Name | Compensation | Bonus | Compensation(1) | in 2006 | Total | in 2006 | ||||||||||||||||||
(€) | (€) | (€) | (€) | (€) | (No. of | |||||||||||||||||||
Performance | ||||||||||||||||||||||||
Rights) | ||||||||||||||||||||||||
Dr. Wulf H. Bernotat | 1,195,000 | 2,400,000 | 63,913 | 1,273,133 | 4,932,046 | 17,041 | ||||||||||||||||||
Dr. Burckhard Bergmann | 725,000 | 1,500,000 | 27,325 | 754,422 | 3,006,747 | 10,098 | ||||||||||||||||||
Christoph Dänzer-Vanotti (from December 1, 2006) | 50,000 | 100,000 | 1,273 | 50,280 | 201,553 | 673 | ||||||||||||||||||
Lutz Feldmann (from December 1, 2006) | 50,000 | 100,000 | 3,371 | 50,280 | 203,651 | 673 | ||||||||||||||||||
Dr. Hans Michael Gaul | 725,000 | 1,500,000 | 28,708 | 754,422 | 3,008,130 | 10,098 | ||||||||||||||||||
Dr. Manfred Krüper (until November 30, 2006) | 662,500 | 1,375,000 | 27,245 | 754,422 | 2,819,167 | 10,098 | ||||||||||||||||||
Dr. Marcus Schenck (from December 1, 2006) | 50,000 | 100,000 | 1,500,000 | 50,280 | 1,700,280 | 673 | ||||||||||||||||||
Dr. Erhard Schipporeit (until November 30, 2006) | 662,500 | 1,375,000 | 38,423 | 754,422 | 2,830,345 | 10,098 | ||||||||||||||||||
Dr. Johannes Teyssen | 725,000 | 1,500,000 | 54,098 | 754,422 | 3,033,520 | 10,098 | ||||||||||||||||||
Total | 4,845,000 | 9,950,000 | 1,744,356 | 5,196,083 | 21,735,439 | 69,550 | ||||||||||||||||||
(1) | Dr. Schenck received other compensation of €1.5 million as a one-time reimbursement for parts of his long-term compensation from his previous employer that he forfeited when he joined E.ON. The remaining other compensation of the members of the Board of Management consists primarily of benefits in kind from the personal use of company cars. |
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Employees at | Employees at | Employees at | ||||||||||||||||||||||||||||||||||
December 31, 2006 | December 31, 2005 | December 31, 2004 | ||||||||||||||||||||||||||||||||||
Total | Germany | Foreign | Total | Germany | Foreign | Total | Germany | Foreign | ||||||||||||||||||||||||||||
Central Europe | 43,546 | 30,199 | 13,347 | 44,476 | 30,307 | 14,169 | 36,811 | 29,208 | 7,603 | |||||||||||||||||||||||||||
Pan-European Gas | 12,417 | 3,371 | 9,046 | 13,366 | 3,411 | 9,955 | 4,001 | 3,432 | 569 | |||||||||||||||||||||||||||
U.K. | 15,621 | 13 | 15,608 | 12,891 | 10 | 12,881 | 10,397 | 6 | 10,391 | |||||||||||||||||||||||||||
Nordic | 5,693 | 3 | 5,690 | 5,424 | 2 | 5,422 | 5,106 | 2 | 5,104 | |||||||||||||||||||||||||||
U.S. Midwest | 2,890 | 2 | 2,888 | 3,002 | 2 | 3,000 | 2,997 | 1 | 2,996 | |||||||||||||||||||||||||||
Corporate Center | 445 | 426 | 19 | 411 | 395 | 16 | 420 | 403 | 17 | |||||||||||||||||||||||||||
Total | 80,612 | 34,014 | 46,598 | 79,570 | 34,127 | 45,443 | 59,732 | 33,052 | 26,680 | |||||||||||||||||||||||||||
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Price per ADS | ||||||||
($)(1) | ||||||||
High | Low | |||||||
2002 | 58.02 | 39.80 | ||||||
2003 | 65.44 | 38.52 | ||||||
2004 | 91.15 | 61.72 | ||||||
2005 | 35.01 | 27.67 | ||||||
First Quarter | 31.01 | 28.21 | ||||||
Second Quarter | 29.97 | 27.67 | ||||||
Third Quarter | 33.73 | 29.14 | ||||||
Fourth Quarter | 35.01 | 29.15 | ||||||
2006 | 45.36 | 34.30 | ||||||
First Quarter | 38.39 | 35.60 | ||||||
Second Quarter | 40.79 | 34.30 | ||||||
Third Quarter | 42.92 | 36.10 | ||||||
Fourth Quarter | 45.36 | 38.58 | ||||||
September | 42.88 | 39.35 | ||||||
October | 40.13 | 38.58 | ||||||
November | 42.90 | 38.93 | ||||||
December | 45.36 | 42.02 | ||||||
2007 | ||||||||
January | 45.40 | 41.91 | ||||||
February | 48.52 | 43.62 |
(1) | One E.ON ADS equaled one Ordinary Share until March 28, 2005. |
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Price Per | ||||||||||||||||
Ordinary Share | DAX 30 Index(1) | |||||||||||||||
High | Low | High | Low | |||||||||||||
(€) | (€ in thousands) | |||||||||||||||
2002 | 59.97 | 38.16 | 5,462.55 | 2,597.88 | ||||||||||||
2003 | 51.74 | 34.67 | 3,965.16 | 2,202.96 | ||||||||||||
2004 | 67.06 | 49.27 | 4,261.79 | 3,646.99 | ||||||||||||
2005 | 88.92 | 64.50 | 5,458.58 | 4,178.10 | ||||||||||||
First Quarter | 71.70 | 64.50 | 4,428.09 | 4,201.81 | ||||||||||||
Second Quarter | 73.68 | 69.60 | 4,627.48 | 4,178.10 | ||||||||||||
Third Quarter | 80.80 | 72.59 | 5,048.74 | 4,530.18 | ||||||||||||
Fourth Quarter | 88.92 | 72.25 | 5,458.58 | 4,806.05 | ||||||||||||
2006 | 104.40 | 82.12 | 6,611.81 | 5,292.14 | ||||||||||||
First Quarter | 96.10 | 87.07 | 5,984.18 | 5,334.30 | ||||||||||||
Second Quarter | 100.35 | 82.12 | 6,140.72 | 5,292.14 | ||||||||||||
Third Quarter | 100.94 | 85.52 | 6,004.33 | 5,396.85 | ||||||||||||
Fourth Quarter | 104.40 | 91.50 | 6,611.81 | 5,992.22 | ||||||||||||
September | 100.94 | 92.65 | 6,004.33 | 5,773.72 | ||||||||||||
October | 94.96 | 91.50 | 6,284.19 | 5,992.22 | ||||||||||||
November | 98.25 | 91.73 | 6,476.13 | 6,223.33 | ||||||||||||
December | 104.40 | 94.52 | 6,611.81 | 6,241.13 | ||||||||||||
2007 | ||||||||||||||||
January | 104.24 | 96.59 | 6,789.11 | 6,566.56 | ||||||||||||
February | 111.65 | 99.14 | 7,027.59 | 6,715.44 |
(1) | The DAX 30 Index is a continuously updated, capital-weighted performance index of 30 German blue chip companies. E.ON represented approximately 9.23 percent of the DAX 30 Index as of March 2, 2007. 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. |
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• | The annual general meeting of shareholdersratifies 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 boardappoints 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 managementmanages 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 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. |
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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. |
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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. |
• | register in text form in the German or English language no later than the end of the seventh day prior to the day of the shareholders’ meeting; and | |
• | prove their right to participate in the shareholders’ meeting and to exercise the voting right. This must occur by the end of the seventh day prior to the day of the shareholders’ meeting by presenting proof of the shareholding in text form in the German or English language issued by the institution where the shares are deposited. Such proof of shareholding must relate to the beginning of the twenty-first day prior to the shareholders’ meeting. |
• | quarterly reports; | |
• | annual reports prepared in accordance with German law (in both German and English); |
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• | the Annual Report onForm 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. |
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December 31, 2006 | December 31, 2005 | |||||||||||||||||||||||||||||||
1-day | 10-day | 1-day | 10-day | |||||||||||||||||||||||||||||
Nominal | Fair | Value- | Value- | Nominal | Fair | Value- | Value- | |||||||||||||||||||||||||
Value | Value | at-Risk | at-Risk | Value | Value | at-Risk | at-Risk | |||||||||||||||||||||||||
(€ in millions) | ||||||||||||||||||||||||||||||||
FX forward transactions | ||||||||||||||||||||||||||||||||
Buy | 4,532.7 | (27.1 | ) | 8.1 | 25.5 | 4,091.3 | 79.2 | 16.9 | 53.4 | |||||||||||||||||||||||
Sell | 6,982.4 | 19.4 | 15.6 | 49.4 | 8,331.2 | (81.7 | ) | 23.6 | 74.6 | |||||||||||||||||||||||
FX currency options | ||||||||||||||||||||||||||||||||
Buy | 7.4 | 0.1 | 0.0 | 0.0 | 227.7 | 32.8 | 0.2 | 0.6 | ||||||||||||||||||||||||
Sell | — | — | — | — | 139.6 | (39.0 | ) | 0.4 | 1.3 | |||||||||||||||||||||||
Subtotal | 11,522.5 | (7.6 | ) | 8.1 | 25.5 | 12,789.8 | (8.7 | ) | 8.5 | 26.9 | ||||||||||||||||||||||
(Remaining maturities) | ||||||||||||||||||||||||||||||||
Cross currency swaps | ||||||||||||||||||||||||||||||||
up to 1 year | 1,457.8 | 9.7 | 4.4 | 14.0 | 1,734.7 | 34.7 | 1.9 | 6.0 | ||||||||||||||||||||||||
1 year to 5 years | 10,812.9 | (22.8 | ) | 32.2 | 101.9 | 8,163.2 | 57.8 | 34.6 | 109.3 | |||||||||||||||||||||||
more than 5 years | 6,228.6 | 20.5 | 6.9 | 21.8 | 6,358.4 | 66.6 | 8.7 | 27.5 | ||||||||||||||||||||||||
Interest rate/cross currency swaps | ||||||||||||||||||||||||||||||||
up to 1 year | — | — | — | — | 125.0 | 13.1 | 0.5 | 1.6 | ||||||||||||||||||||||||
1 year to 5 years | 321.9 | (17.0 | ) | 2.5 | 7.8 | 316.4 | 5.0 | 2.3 | 7.3 | |||||||||||||||||||||||
more than 5 years | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Subtotal | 18,821.2 | (9.6 | ) | 35.7 | 112.8 | 16,697.7 | 177.2 | 40.6 | 128.3 | |||||||||||||||||||||||
Total | 30,343.7 | (17.2 | ) | 39.5 | 124.7 | 29,487.5 | 168.5 | 48.0 | 151.7 | |||||||||||||||||||||||
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December 31, 2006 | December 31, 2005 | |||||||||||||||||||||||||||||||
1-day | 10-day | 1-day | 10-day | |||||||||||||||||||||||||||||
Nominal | Fair | Value- | Value- | Nominal | Fair | Value- | Value- | |||||||||||||||||||||||||
Value | Value | at-Risk | at-Risk | Value | Value | at-Risk | at-Risk | |||||||||||||||||||||||||
(€ in millions) | ||||||||||||||||||||||||||||||||
(Remaining maturities) | ||||||||||||||||||||||||||||||||
Interest rate swaps fixed-rate payer | ||||||||||||||||||||||||||||||||
up to 1 year | 150.9 | 0.8 | 0.9 | 2.7 | 612.2 | (11.8 | ) | 0.1 | 0.3 | |||||||||||||||||||||||
1 year to 5 years | 1221.8 | (3.1 | ) | 1.1 | 3.4 | 1,294.9 | (44.1 | ) | 1.4 | 4.4 | ||||||||||||||||||||||
more than 5 years | 919.8 | (14.1 | ) | 8.3 | 26.2 | 1,033.5 | (18.0 | ) | 4.0 | 12.6 | ||||||||||||||||||||||
fixed-rate receiver up to 1 year | 55.1 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||||||||||||||||||
1 year to 5 years | 5,263.9 | (75.5 | ) | 5.8 | 18.5 | 5,364.4 | 64.3 | 7.7 | 24.3 | |||||||||||||||||||||||
more than 5 years | 759.3 | (14.3 | ) | 4.9 | 15.5 | 1,196.4 | (20.7 | ) | 4.4 | 13.9 | ||||||||||||||||||||||
Total | 8,370.8 | (106.2 | ) | 9.0 | 28.5 | 9,501.4 | (30.3 | ) | 6.6 | 20.9 | ||||||||||||||||||||||
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Year Ended | Year Ended | |||||||
Type of Fees | December 31, 2006 | December 31, 2005 | ||||||
(€ in millions) | ||||||||
Audit Fees | 53.4 | 39.8 | ||||||
Audit-Related Fees | 4.6 | 9.7 | ||||||
Tax Fees | 0.9 | 1.4 | ||||||
All Other Fees | 1.9 | 1.1 | ||||||
Total | 60.8 | 52.0 | ||||||
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• | 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. |
• | 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 compliance services, including return preparation and tax payment planning; | |
• | Tax advice relating to transactions or events; | |
• | Transfer pricing studies; and | |
• | Tax services for employee benefit plans. |
• | 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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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 | |||||||||||||
2006 | (a) | (b) | (c) | (d) | ||||||||||||
Jan. 1-31 | 3,400 | 88.16 | — | 36,353,552 | ||||||||||||
Feb. 1-28 | — | — | — | 36,353,552 | ||||||||||||
Mar. 1-31 | — | — | — | 36,353,552 | ||||||||||||
Apr. 1-30 | 3,666 | 91.06 | — | 36,353,552 | ||||||||||||
May 1-31 | — | — | — | 36,353,574 | ||||||||||||
Jun. 1-30 | — | — | — | 36,353,574 | ||||||||||||
Jul. 1-31 | — | — | — | 36,353,574 | ||||||||||||
Aug. 1-31 | — | — | — | 36,353,574 | ||||||||||||
Sep. 1-30 | — | — | — | 36,353,574 | ||||||||||||
Oct. 1-31 | — | — | — | 36,353,574 | ||||||||||||
Nov. 1-30 | — | — | — | 36,797,269 | ||||||||||||
Dec. 1-31 | — | — | — | 36,797,269 | ||||||||||||
Total | 7,066 | 89.66 | — | |||||||||||||
�� |
(a) | 366 Ordinary Shares were purchased for the benefit of the Company’s Group Works Council. 6,700 Ordinary Shares were purchased to compensate a minority shareholder in the context of the squeeze-out proceedings of E.ON Bayern. All of the purchases were made in the market. | |
(c)(d) | Pursuant to shareholder resolutions approved at the annual general meeting of shareholders held on May 4, 2006, 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 November 4, 2007. 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 2006 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 2006, as the shares purchased for the benefit of the Company’s Group Works Council and for compensation in the context of the E.ON Bayern squeeze-out were not purchased pursuant to such plan. |
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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.** | ||
4 | .3 | Sale and Purchase Agreement Regarding the Sale and Purchase of All Shares in Viterra AG between E.ON Viterra-Beteiligungsgesellschaft mbH, E.ON AG, Atrium Einhunderterste VV GmbH and Praetorium 40. VV GmbH, dated May 17, 2005.*** † | ||
4 | .4 | EUR 37,100,000,000 Syndicated Term and Guarantee Facility Agreement, dated October 16, 2006, between and among E.ON, as Original Borrower and Guarantor, HSBC Bank plc, Citigroup Global Markets Limited, J.P. Morgan plc, BNP Paribas, The Royal Bank of Scotland plc and Deutsche Bank AG, as mandated lead arrangers and the other parties thereto.**** | ||
4 | .5 | EUR 5,300,000,000 Term Loan and Guarantee Facility Agreement, dated February 2, 2007, between and among E.ON, as Original Borrower and Guarantor, HSBC Bank plc, Citigroup Global Markets Limited, J.P. Morgan plc, BNP Paribas, The Royal Bank of Scotland plc and Deutsche Bank AG, as mandated lead arrangers and the other parties thereto.***** | ||
8 | .1 | Subsidiaries as of the end of the year covered by this annual report: see “Item 4. Information on the Company — Organizational Structure.” | ||
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 theForm 20-F filed by E.ON AG with the Securities and Exchange Commission on March 19, 2003, file number 1-14688. | |
*** | Incorporated by reference to theForm 20-F filed by E.ON AG with the Securities and Exchange Commission on March 9, 2006, file number 1-14688. | |
**** | Incorporated by reference to the Tender Offer Statement on Schedule TO filed by E.ON AG with the Securities and Exchange Commission on January 26, 2007, file number005-80961. | |
***** | Incorporated by reference to Amendment No. 2 to the Tender Offer Statement on Schedule TO filed by E.ON AG with the Securities and Exchange Commission on February 5, 2007, file number005-80961. | |
† | Confidential material appearing in this document has been omitted and filed separately with the Securities and Exchange Commission in accordance with the Securities Exchange Act of 1934, as amended, andRule 24b-2 promulgated thereunder. Omitted information has been redacted and marked with an asterisk and appropriate legend to indicate redaction. |
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Report of Independent Registered Public Accounting Firm | F-1 | |||
Consolidated Financial Statements: | ||||
Consolidated Statements of Income for the years ended December 31, 2006, 2005 and 2004 | F-3 | |||
Consolidated Balance Sheets at December 31, 2006 and 2005 | F-4 | |||
Consolidated Statements of Cash Flows for the years ended December 31, 2006, 2005 and 2004 | F-5 | |||
Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2006, 2005 and 2004 | F-6 | |||
Notes to the Consolidated Financial Statements | F-7 |
F-i
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Düsseldorf, March 6, 2007 | PricewaterhouseCoopers Aktiengesellschaft Wirtschaftsprüfungsgesellschaft | |||
/s/ Dr. Vogelpoth | /s/ Laue | |||
Dr. Vogelpoth | Laue | |||
Wirtschaftsprüfer | Wirtschaftsprüfer | |||
(German Public Auditor) | (German Public Auditor) |
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Year Ended December 31, | ||||||||||||||||||
Note | 2006* | 2006 | 2005 | 2004 | ||||||||||||||
Public utility sales | $ | 60,838 | € | 46,100 | € | 39,729 | € | 34,054 | ||||||||||
Gas sales | 32,976 | 24,987 | 17,914 | 13,227 | ||||||||||||||
Other sales | (4,392 | ) | (3,328 | ) | (1,502 | ) | (792 | ) | ||||||||||
Sales | (31) | 89,422 | 67,759 | 56,141 | 46,489 | |||||||||||||
Electricity and petroleum tax | (4,701 | ) | (3,562 | ) | (4,525 | ) | (4,339 | ) | ||||||||||
Sales, net of electricity and petroleum tax | 84,721 | 64,197 | 51,616 | 42,150 | ||||||||||||||
Cost of goods sold — Public utility | (45,723 | ) | (34,646 | ) | (28,482 | ) | (23,019 | ) | ||||||||||
Cost of goods sold — Gas | (27,662 | ) | (20,961 | ) | (13,588 | ) | (9,017 | ) | ||||||||||
Cost of goods sold and services provided — Other | 4,359 | 3,303 | 1,467 | 766 | ||||||||||||||
Cost of goods sold and services provided | (69,026 | ) | (52,304 | ) | (40,603 | ) | (31,270 | ) | ||||||||||
Gross profit on sales | 15,695 | 11,893 | 11,013 | 10,880 | ||||||||||||||
Selling expenses | (5,729 | ) | (4,341 | ) | (3,845 | ) | (4,226 | ) | ||||||||||
General and administrative expenses | (2,341 | ) | (1,774 | ) | (1,516 | ) | (1,334 | ) | ||||||||||
Other operating income (expenses), net | (5) | (1,119 | ) | (848 | ) | 1,674 | 1,378 | |||||||||||
Financial earnings, net | (6) | (835 | ) | (633 | ) | (607 | ) | (1,014 | ) | |||||||||
Income/(Loss) from companies accounted for under the equity method | (11c) | 1,103 | 836 | 433 | 648 | |||||||||||||
Income/(Loss) from continuing operations before income taxes and minority interests | 6,774 | 5,133 | 7,152 | 6,332 | ||||||||||||||
Income taxes | (7) | 426 | 323 | (2,261 | ) | (1,852 | ) | |||||||||||
Income/(Loss) from continuing operations after income taxes | 7,200 | 5,456 | 4,891 | 4,480 | ||||||||||||||
Minority interests | (8) | (694 | ) | (526 | ) | (536 | ) | (469 | ) | |||||||||
Income/(Loss) from continuing operations | 6,506 | 4,930 | 4,355 | 4,011 | ||||||||||||||
Income/(Loss) from discontinued operations net (less applicable income taxes of €42, €(35) and €95, respectively): | (4) | 168 | 127 | 3,059 | 328 | |||||||||||||
Income before cumulative effect of changes in accounting principles | 6,674 | 5,057 | 7,414 | 4,339 | ||||||||||||||
Cumulative effect of changes in accounting principles, net (less applicable income taxes of €(0), €(3) and €0, respectively) | — | — | (7 | ) | — | |||||||||||||
Net income | 6,674 | 5,057 | 7,407 | 4,339 | ||||||||||||||
Basic earnings per share: | (10) | |||||||||||||||||
Income/(Loss) from continuing operations | 9.87 | 7.48 | 6.61 | 6.11 | ||||||||||||||
Income/(Loss) from discontinued operations, net | 0.25 | 0.19 | 4.64 | 0.50 | ||||||||||||||
Cumulative effect of changes in accounting principles, net | — | — | (0.01 | ) | — | |||||||||||||
Net income | 10.12 | 7.67 | 11.24 | 6.61 | ||||||||||||||
Diluted earnings per share: | (10) | |||||||||||||||||
Income/(Loss) from continuing operations | 9.87 | 7.48 | 6.61 | 6.11 | ||||||||||||||
Income/(Loss) from discontinued operations, net | 0.25 | 0.19 | 4.64 | 0.50 | ||||||||||||||
Cumulative effect of changes in accounting principles, net | — | — | (0.01 | ) | — | |||||||||||||
Net income | 10.12 | 7.67 | 11.24 | 6.61 | ||||||||||||||
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December 31, | ||||||||||||||||
Note | 2006* | 2006 | 2005 | |||||||||||||
ASSETS | ||||||||||||||||
Goodwill | (11a) | $ | 19,959 | € | 15,124 | € | 15,363 | |||||||||
Intangible assets | (11a) | 4,948 | 3,749 | 4,125 | ||||||||||||
Property, plant and equipment | (11b) | 56,367 | 42,712 | 41,323 | ||||||||||||
Companies accounted for under the equity method | (11c) | 10,514 | 7,967 | 9,689 | ||||||||||||
Other financial assets | (11c) | 26,836 | 20,335 | 16,119 | ||||||||||||
Financial receivables and other financial assets | (13) | 1,839 | 1,394 | 2,059 | ||||||||||||
Operating receivables, other operating assets and prepaid expenses | (13) | 4,689 | 3,553 | 3,530 | ||||||||||||
Deferred tax assets | (7) | 1,993 | 1,510 | 1,706 | ||||||||||||
Non-current assets | 127,145 | 96,344 | 93,914 | |||||||||||||
Inventories | (12) | 5,266 | 3,990 | 2,457 | ||||||||||||
Financial receivables and other financial assets | (13) | 1,870 | 1,417 | 1,060 | ||||||||||||
Operating receivables, other operating assets and prepaid expenses | (13) | 24,199 | 18,337 | 18,180 | ||||||||||||
Restricted cash | (14) | 775 | 587 | 98 | ||||||||||||
Securities and fixed-term deposits | (15) | 5,870 | 4,448 | 5,453 | ||||||||||||
Cash and cash equivalents | (16) | 1,520 | 1,152 | 4,346 | ||||||||||||
Assets of disposal groups | (4) | 805 | 610 | 681 | ||||||||||||
Deferred tax assets | (7) | 458 | 347 | 373 | ||||||||||||
Current assets | 40,763 | 30,888 | 32,648 | |||||||||||||
Total assets | 167,908 | 127,232 | 126,562 | |||||||||||||
December 31, | ||||||||||||||||
Note | 2006* | 2006 | 2005 | |||||||||||||
STOCKHOLDERS’ EQUITY AND LIABILITIES | ||||||||||||||||
Capital stock | (17) | $ | 2,374 | € | 1,799 | € | 1,799 | |||||||||
Additional paid-in capital | (18) | 15,520 | 11,760 | 11,749 | ||||||||||||
Retained earnings | (19) | 34,713 | 26,304 | 25,861 | ||||||||||||
Accumulated other comprehensive income | (20) | 10,838 | 8,212 | 5,331 | ||||||||||||
Treasury stock | (17) | (304 | ) | (230 | ) | (256 | ) | |||||||||
Stockholders’ equity | 63,141 | 47,845 | 44,484 | |||||||||||||
Minority interests | (21) | 6,489 | 4,917 | 4,734 | ||||||||||||
Financial liabilities | (24) | 13,143 | 9,959 | 10,555 | ||||||||||||
Operating liabilities and deferred income | (24) | 7,715 | 5,846 | 6,365 | ||||||||||||
Provisions for pensions | (22) | 4,974 | 3,769 | 8,290 | ||||||||||||
Other provisions | (23) | 26,929 | 20,406 | 19,112 | ||||||||||||
Deferred tax liabilities | (7) | 9,626 | 7,294 | 7,929 | ||||||||||||
Non-current liabilities | 62,387 | 47,274 | 52,251 | |||||||||||||
Financial liabilities | (24) | 4,540 | 3,440 | 3,807 | ||||||||||||
Operating liabilities and deferred income | (24) | 19,273 | 14,604 | 13,504 | ||||||||||||
Provisions for pensions | (22) | 153 | 116 | 430 | ||||||||||||
Other provisions | (23) | 10,296 | 7,802 | 6,030 | ||||||||||||
Liabilities of disposal groups | (4) | 812 | 615 | 831 | ||||||||||||
Deferred tax liabilities | (7) | 817 | 619 | 491 | ||||||||||||
Current liabilities | 35,891 | 27,196 | 25,093 | |||||||||||||
Total stockholders’ equity and liabilities | 167,908 | 127,232 | 126,562 | |||||||||||||
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Year Ended December 31, | ||||||||||||||||
2006* | 2006 | 2005 | 2004 | |||||||||||||
Net income | $ | 6,674 | € | 5,057 | € | 7,407 | € | 4,339 | ||||||||
Income applicable to minority interests | 694 | 526 | 536 | 469 | ||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities | ||||||||||||||||
Income from discontinued operations | (168 | ) | (127 | ) | (3,059 | ) | (328 | ) | ||||||||
Depreciation, amortization and impairment on intangible assets, property, plant, equipment and equity investments | 4,950 | 3,751 | 3,030 | 3,014 | ||||||||||||
Changes in provisions | 2,376 | 1,800 | (362 | ) | 68 | |||||||||||
Changes in deferred taxes | (1,090 | ) | (826 | ) | 390 | (570 | ) | |||||||||
Other non-cash income and expenses | (494 | ) | (374 | ) | 90 | 209 | ||||||||||
Gain/Loss on disposal: | ||||||||||||||||
Equity investments | (974 | ) | (738 | ) | (44 | ) | (397 | ) | ||||||||
Intangible assets and property, plant and equipment | (120 | ) | (91 | ) | (36 | ) | (31 | ) | ||||||||
Securities (other than trading) (> 3 months) | (650 | ) | (493 | ) | (398 | ) | (240 | ) | ||||||||
Changes in current assets and other operating liabilities | ||||||||||||||||
Inventories | (1,793 | ) | (1,359 | ) | (281 | ) | (279 | ) | ||||||||
Trade receivables | (1,918 | ) | (1,453 | ) | (1,502 | ) | (195 | ) | ||||||||
Other operating receivables | 888 | 673 | (3,828 | ) | (21 | ) | ||||||||||
Trade payables | 113 | 86 | 1,386 | (119 | ) | |||||||||||
Other operating liabilities | 1,006 | 762 | 3,215 | (143 | ) | |||||||||||
Cash provided by operating activities | 9,494 | 7,194 | 6,544 | 5,776 | ||||||||||||
Proceeds from disposal of | ||||||||||||||||
Equity investments | 4,818 | 3,651 | 6,093 | 1,619 | ||||||||||||
Intangible assets and property, plant and equipment | 400 | 303 | 201 | 269 | ||||||||||||
Purchase of | ||||||||||||||||
Equity investments | (1,423 | ) | (1,078 | ) | (985 | ) | (2,203 | ) | ||||||||
Intangible assets and property, plant and equipment | (5,388 | ) | (4,083 | ) | (2,956 | ) | (2,574 | ) | ||||||||
Changes in securities (other than trading) (> 3 months) | (1,017 | ) | (771 | ) | (568 | ) | (135 | ) | ||||||||
Changes in financial receivables and fixed-term deposits | (3,127 | ) | (2,369 | ) | (1,339 | ) | 2,697 | |||||||||
Changes in restricted cash | (203 | ) | (154 | ) | (4 | ) | (32 | ) | ||||||||
Cash provided by (used for) investing activities | (5,940 | ) | (4,501 | ) | 442 | (359 | ) | |||||||||
Payments received from/(made for) capital including minority interests | 1 | 1 | (26 | ) | 3 | |||||||||||
Payments received from/(made for) treasury stock, net | 37 | 28 | (33 | ) | — | |||||||||||
Payment of cash dividends to | ||||||||||||||||
Stockholders of E.ON AG | (6,089 | ) | (4,614 | ) | (1,549 | ) | (1,312 | ) | ||||||||
Minority stockholders | (319 | ) | (242 | ) | (239 | ) | (278 | ) | ||||||||
Proceeds from financial liabilities | 14,313 | 10,846 | 3,013 | 3,522 | ||||||||||||
Repayments of financial liabilities | (15,662 | ) | (11,868 | ) | (7,624 | ) | (6,684 | ) | ||||||||
Cash provided by (used for) financing activities | (7,719 | ) | (5,849 | ) | (6,458 | ) | (4,749 | ) | ||||||||
Net increase (decrease) in cash and cash equivalents | (4,165 | ) | (3,156 | ) | 528 | 668 | ||||||||||
Cash provided by operating activities of discontinued operations | 91 | 69 | 114 | 196 | ||||||||||||
Cash used for investing activities of discontinued operations | (144 | ) | (109 | ) | (315 | ) | (269 | ) | ||||||||
Cash provided by financing activities of discontinued operations | 3 | 2 | (171 | ) | 288 | |||||||||||
Net increase in cash and cash equivalents from discontinued operations | (50 | ) | (38 | ) | (372 | ) | 215 | |||||||||
Effect of foreign exchange rates on cash and cash equivalents | — | — | 77 | (60 | ) | |||||||||||
Cash and cash equivalents at the beginning of the period | 5,735 | 4,346 | 4,113 | 3,290 | ||||||||||||
Cash and cash equivalents from continuing operations at the end of the period | 1,520 | 1,152 | 4,346 | 4,113 | ||||||||||||
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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 | SFAS 158 | hedges | stock | Total | |||||||||||||||||||||||||||||||
Balance as of January 1, 2004 | 1,799 | 11,564 | 16,976 | (1,021 | ) | 1,184 | (492 | ) | — | 20 | (256 | ) | 29,774 | |||||||||||||||||||||||||||
Shares reacquired/sold | 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 | |||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2004 | 1,799 | 11,746 | 20,003 | (896 | ) | 2,178 | (1,090 | ) | — | 76 | (256 | ) | 33,560 | |||||||||||||||||||||||||||
Shares reacquired/sold | 3 | 3 | ||||||||||||||||||||||||||||||||||||||
Dividends paid | (1,549 | ) | (1,549 | ) | ||||||||||||||||||||||||||||||||||||
Net income | 7,407 | 7,407 | ||||||||||||||||||||||||||||||||||||||
Other comprehensive income | 620 | 4,698 | (312 | ) | 57 | 5,063 | ||||||||||||||||||||||||||||||||||
Total comprehensive income | 12,470 | |||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2005 | 1,799 | 11,749 | 25,861 | (276 | ) | 6,876 | (1,402 | ) | — | 133 | (256 | ) | 44,484 | |||||||||||||||||||||||||||
Shares reacquired/sold | 11 | 26 | 37 | |||||||||||||||||||||||||||||||||||||
Dividends paid | (4,614 | ) | (4,614 | ) | ||||||||||||||||||||||||||||||||||||
Net income | 5,057 | 5,057 | ||||||||||||||||||||||||||||||||||||||
Other comprehensive income | 167 | 3,139 | 346 | — | (221 | ) | 3,431 | |||||||||||||||||||||||||||||||||
Total comprehensive income | 8,488 | |||||||||||||||||||||||||||||||||||||||
SFAS 158 | 1,056 | (1,606 | ) | (550 | ) | |||||||||||||||||||||||||||||||||||
Balance as of December 31, 2006 | 1,799 | 11,760 | 26,304 | (109 | ) | 10,015 | — | (1,606 | ) | (88 | ) | (230 | ) | 47,845 | ||||||||||||||||||||||||||
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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 shareholdings in the downstream gas business. This market unit is led by E.ON Ruhrgas AG (“E.ON Ruhrgas”), 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. (“E.ON UK”), Coventry, U.K. | |
• | 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 integrated energy company E.ON Sverige AB (“E.ON Sverige”), Malmö, Sweden. | |
• | The U.S. Midwest market unit, led by E.ON U.S. LLC (“E.ON U.S.”), 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 generally fully consolidated. However, certain subsidiaries controlled by E.ON that are inconsequential, both individually and in the aggregate, are accounted for at cost with no subsequent adjustment, unless impaired. Financial Accounting Standards Board (“FASB”) Interpretation (“FIN”) No. 46 (revised December 2003), “Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51” (“FIN 46(R)”), 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 concerning 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 on 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. However, certain associated companies controlled by E.ON that are inconsequential, both individually and in the aggregate, are accounted for at cost with no subsequent adjustment, unless impaired. | |
• | All other share investments are accounted for under the cost method or, if marketable, at fair value. |
F-8
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€1, rate as of | €1, annual | |||||||||||||||||||||||
December 31, | average rate | |||||||||||||||||||||||
ISO Code | 2006 | 2005 | 2006 | 2005 | 2004 | |||||||||||||||||||
British pound | GBP | 0.67 | 0.69 | 0.68 | 0.68 | 0.69 | ||||||||||||||||||
Norwegian krone | NOK | 8.24 | 7.99 | 8.05 | 8.01 | 8.00 | ||||||||||||||||||
Swedish krona | SEK | 9.04 | 9.39 | 9.25 | 9.28 | 9.12 | ||||||||||||||||||
Hungarian forint | HUF | 251.77 | 252.87 | 264.26 | 248.05 | 251.68 | ||||||||||||||||||
U.S. dollar | USD | 1.32 | 1.18 | 1.26 | 1.24 | 1.13 |
(1) | The countries within the European Monetary Union in 2006 were Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, The Netherlands, Portugal and Spain. |
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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 the fair value of goodwill is less than its carrying value, the difference is recorded as an impairment. |
F-11
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Buildings | 10 to 50 years | |
Technical equipment, plant and machinery | 10 to 65 years | |
Other equipment, fixtures, furniture and office equipment | 3 to 25 years |
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Domestic | Foreign | Total | ||||||||||
Consolidated companies as of December 31, 2005 | 128 | 379 | 507 | |||||||||
Additions | 15 | 18 | 33 | |||||||||
Disposals/Mergers | 5 | 35 | 40 | |||||||||
Consolidated companies as of December 31, 2006 | 138 | 362 | 500 | |||||||||
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F-20
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€ in millions | 2006 | 2005 | 2004 | |||||||||
Sales | 131 | 258 | 253 | |||||||||
Gain on disposal, net | 11 | — | — | |||||||||
Other income/(expenses), net | (115 | ) | (202 | ) | (230 | ) | ||||||
Income from continuing operations before income taxes and minority interests | 27 | 56 | 23 | |||||||||
Income taxes | (7 | ) | (15 | ) | 2 | |||||||
Minority interests | (9 | ) | (17 | ) | (9 | ) | ||||||
Income from discontinued operations | 11 | 24 | 16 | |||||||||
€ in millions | 2006 | 2005 | 2004 | |||||||||
Sales | 227 | 214 | 195 | |||||||||
Other income/(expenses), net | (129 | ) | (466 | ) | (199 | ) | ||||||
Income from continuing operations before income taxes and minority interests | 98 | (252 | ) | (4 | ) | |||||||
Income taxes | (34 | ) | 90 | 2 | ||||||||
Income from discontinued operations | 64 | (162 | ) | (2 | ) | |||||||
December 31, | December 31, | |||||||
€ in millions | 2006 | 2005 | ||||||
Property, plant and equipment | 214 | 212 | ||||||
Other assets | 396 | 469 | ||||||
Total assets | 610 | 681 | ||||||
Total liabilities | 615 | 831 | ||||||
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F-23
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€ in millions | 2005 | 2004 | ||||||
Sales | 847 | 1,188 | ||||||
Gain on disposal, net | 606 | — | ||||||
Other income/(expenses), net | (803 | ) | (1,123 | ) | ||||
Income from continuing operations before income taxes and minority interests | 650 | 65 | ||||||
Income taxes | (21 | ) | (35 | ) | ||||
Minority interests | (1 | ) | (1 | ) | ||||
Income from discontinued operations | 628 | 29 | ||||||
€ in millions | 2005 | 2004 | ||||||
Sales | 453 | 978 | ||||||
Gain on disposal, net | 2,406 | — | ||||||
Other income/(expenses), net | (282 | ) | (595 | ) | ||||
Income from continuing operations before income taxes and minority interests | 2,577 | 383 | ||||||
Income taxes | (19 | ) | (64 | ) | ||||
Minority interests | — | (25 | ) | |||||
Income from discontinued operations | 2,558 | 294 | ||||||
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€ in millions | January 16, 2004 | |||
Goodwill | 473 | |||
Intangible assets | 10 | |||
Property, plant and equipment | 1,745 | |||
Financial assets | 34 | |||
Other assets | 217 | |||
Total assets | 2,479 | |||
Provisions | (178 | ) | ||
Liabilities | (2,246 | ) | ||
Total liabilities | (2,424 | ) | ||
Net assets | 55 | |||
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€ in millions | December 31, 2004 | |||
Fixed assets | 553 | |||
Other assets | — | |||
Total assets | 553 | |||
Total liabilities | (54 | ) | ||
Net assets | 499 | |||
€ in millions | 2006 | 2005 | 2004 | |||||||||
Gains from the disposal of investments, net | 579 | 34 | 397 | |||||||||
(Loss) Gain on derivative instruments, net | (2,748 | ) | 931 | 602 | ||||||||
Exchange rate differences | 44 | 138 | (309 | ) | ||||||||
SAB 51 Gain | 7 | 31 | — | |||||||||
Research and development costs | (27 | ) | (24 | ) | (19 | ) | ||||||
Miscellaneous | 1,297 | 564 | 707 | |||||||||
Total | (848 | ) | 1,674 | 1,378 | ||||||||
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€ in millions | 2006 | 2005 | 2004 | |||||||||
Income from companies in which share investments are held; thereof from affiliated companies: €35 (2005: €33; 2004: €32) | 223 | 203 | 185 | |||||||||
Income fromprofit-and-loss-pooling agreements; thereof from affiliated companies: €4 (2005: €3; 2004: €5) | 4 | 3 | 5 | |||||||||
Losses fromprofit-and-loss-pooling agreements; thereof from affiliated companies: €(8) (2005: €(1); 2004: €(8)) | (9 | ) | (3 | ) | (10 | ) | ||||||
Income from share investments | 218 | 203 | 180 | |||||||||
Income from other securities | 37 | 45 | 36 | |||||||||
Other interest and similar income; thereof from affiliated companies: €11 (2005: €6; 2004: €8) | 1,213 | 1,001 | 576 | |||||||||
Interest and similar expenses; | ||||||||||||
thereof from affiliated companies: €(3) (2005: €(8); 2004: (5)) | ||||||||||||
thereof SFAS 143 accretion expense: €(524) (2005: €(511); 2004: €(499)) | (1,937 | ) | (1,782 | ) | (1,675 | ) | ||||||
Interest and similar expenses (net) | (687 | ) | (736 | ) | (1,063 | ) | ||||||
Write-down of financial assets and share investments | (164 | ) | (74 | ) | (131 | ) | ||||||
Financial earnings, net | (633 | ) | (607 | ) | (1,014 | ) | ||||||
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€ in millions | 2006 | 2005 | 2004 | |||||||||
Current taxes | ||||||||||||
Domestic corporate income tax | (406 | ) | 1,081 | 952 | ||||||||
Domestic trade tax | 351 | 416 | 446 | |||||||||
Foreign income tax | 553 | 374 | 387 | |||||||||
Other income taxes | 5 | — | (1 | ) | ||||||||
Total | 503 | 1,871 | 1,784 | |||||||||
Deferred taxes | ||||||||||||
Domestic | (360 | ) | (4 | ) | 92 | |||||||
Foreign | (466 | ) | 394 | (24 | ) | |||||||
Total | (826 | ) | 390 | 68 | ||||||||
Income taxes | (323 | ) | 2,261 | 1,852 | ||||||||
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2006 | 2005 (1) | 2004 | ||||||||||||||||||||||
€ in millions | % | € in millions | % | € in millions | % | |||||||||||||||||||
Corporate income tax | 2,002 | 39.0 | 2,789 | 39.0 | 2,469 | 39.0 | ||||||||||||||||||
Credit for dividend distributions | (76 | ) | (1.5 | ) | — | — | — | — | ||||||||||||||||
Foreign tax rate differentials | (33 | ) | (0.6 | ) | (355 | ) | (5.0 | ) | (170 | ) | (2.7 | ) | ||||||||||||
Changes in valuation allowances | (41 | ) | (0.8 | ) | 109 | 1.5 | (202 | ) | (3.2 | ) | ||||||||||||||
Changes in tax rate/tax law | (21 | ) | (0.4 | ) | 4 | 0.1 | 149 | 2.4 | ||||||||||||||||
Tax effects on | ||||||||||||||||||||||||
Tax-free income | (634 | ) | (12.4 | ) | (315 | ) | (4.4 | ) | (501 | ) | (7.9 | ) | ||||||||||||
Equity accounting | (258 | ) | (5.0 | ) | (67 | ) | (0.9 | ) | (185 | ) | (2.9 | ) | ||||||||||||
Other (2) | (1,262 | ) | (24.6 | ) | 96 | 1.3 | 292 | 4.6 | ||||||||||||||||
Effective income taxes/tax rate | (323 | ) | (6.3 | ) | 2,261 | 31.6 | 1,852 | 29.3 | ||||||||||||||||
(1) | Prior-year values have been adjusted accordingly to reflect the combined rate of 39 percent |
(2) | thereof in 2006 income from capitalization of corporate tax credits: € 1,279 million |
€ in millions | 2006 | 2005 | 2004 | |||||||||
Viterra | 1 | 19 | 64 | |||||||||
Ruhrgas Industries | — | 21 | 35 | |||||||||
WKE | 34 | (90 | ) | (2 | ) | |||||||
E.ON Finland | 7 | 15 | (2 | ) | ||||||||
Income taxes from discontinued operations | 42 | (35 | ) | 95 | ||||||||
€ in millions | 2006 | 2005 | 2004 | |||||||||
Domestic | 3,664 | 3,526 | 3,553 | |||||||||
Foreign | 1,469 | 3,626 | 2,779 | |||||||||
Total | 5,133 | 7,152 | 6,332 | |||||||||
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December 31, | ||||||||
€ in millions | 2006 | 2005 | ||||||
Deferred tax assets | ||||||||
Intangible assets | 66 | 41 | ||||||
Property, plant and equipment | 549 | 624 | ||||||
Financial assets | 208 | 383 | ||||||
Inventories | 12 | 7 | ||||||
Receivables | 508 | 178 | ||||||
Provisions | 4,227 | 4,753 | ||||||
Liabilities | 2,315 | 2,421 | ||||||
Net operating loss carryforwards | 613 | 891 | ||||||
Tax credits | 38 | 33 | ||||||
Other | 190 | 269 | ||||||
Subtotal | 8,726 | 9,600 | ||||||
Valuation allowance | (434 | ) | (573 | ) | ||||
Total | 8,292 | 9,027 | ||||||
Deferred tax liabilities | ||||||||
Intangible assets | 1,140 | 1,030 | ||||||
Property, plant and equipment | 6,631 | 6,609 | ||||||
Financial assets | 2,510 | 2,312 | ||||||
Inventories | 122 | 94 | ||||||
Receivables | 1,851 | 2,401 | ||||||
Provisions | 443 | 1,167 | ||||||
Liabilities | 107 | 911 | ||||||
Other | 1,544 | 844 | ||||||
Total | 14,348 | 15,368 | ||||||
Net deferred tax assets/liabilities (−) | (6,056 | ) | (6,341 | ) | ||||
December 31, 2006 | December 31, 2005 | |||||||||||||||
€ in millions | current | non-current | current | non-current | ||||||||||||
Deferred tax assets | 358 | 1,933 | 383 | 2,269 | ||||||||||||
Valuation allowance | (11 | ) | (423 | ) | (10 | ) | (563 | ) | ||||||||
Net deferred tax assets | 347 | 1,510 | 373 | 1,706 | ||||||||||||
Deferred tax liabilities | (619 | ) | (7,294 | ) | (491 | ) | (7,929 | ) | ||||||||
Net deferred tax assets/liabilities (−) | (272 | ) | (5,784 | ) | (118 | ) | (6,223 | ) | ||||||||
F-30
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December 31, | ||||||||
€ in millions | 2006 | 2005 | ||||||
Domestic tax loss carryforwards | 2,016 | 2,907 | ||||||
Foreign tax loss carryforwards | 956 | 1,220 | ||||||
Total | 2,972 | 4,127 | ||||||
€ in millions | 2006 | 2005 | 2004 | |||||||||
Wages and salaries | 3,470 | 3,218 | 2,916 | |||||||||
Social security contributions | 579 | 549 | 500 | |||||||||
Pension costs and other employee benefits; thereof pension costs: €505 (2005: €415; 2004: €373) | 524 | 465 | 394 | |||||||||
Total | 4,573 | 4,232 | 3,810 | |||||||||
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7th tranche | 6th tranche | 5th tranche | 4th tranche | 3rd tranche | 2nd tranche | |||||||||||||||||||
Date of issuance | Jan. 3, 2005 | 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 | 7 years | ||||||||||||||||||
Blackout period | 2 years | 2 years | 2 years | 2 years | 2 years | 2 years | ||||||||||||||||||
Price at issuance (in €)* | 61.10 | 44.80 | 37.86 | 50.70 | 58.70 | 44.10 | ||||||||||||||||||
Level of the Dow Jones STOXX Utilities Index (Price EUR) at SAR issuance | 268.66 | 211.58 | 202.14 | 262.44 | 300.18 | 285.77 | ||||||||||||||||||
Number of participants in year of issuance | 357 | 357 | 344 | 186 | 231 | 155 | ||||||||||||||||||
Number of SAR issued (in millions) | 2.9 | 2.7 | 2.6 | 1.7 | 1.8 | 1.5 | ||||||||||||||||||
Exercise hurdle (minimum percentage by which exercise price exceeds the price at issuance) | 10 | 10 | 10 | 10 | 20 | 20 | ||||||||||||||||||
Exercise hurdle (minimum exercise pricein €)* | 67.21 | 49.28 | 41.65 | 55.77 | 70.44 | 52.92 | ||||||||||||||||||
Maximum exercise gain (in €) | 65.35 | 49.05 | — | — | — | — |
* | Adjusted for special dividend distribution |
F-32
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7th tranche | 6th tranche | 5th tranche | 4th tranche | 3rd tranche | ||||||||||||||||
E.ON AG share price on December 31, 2006 (in €) | 102.83 | 102.83 | 102.83 | 102.83 | 102.83 | |||||||||||||||
Level of the Dow Jones STOXX Utilities Index (Price EUR) on December 31, 2006 | 464.95 | 464.95 | 464.95 | 464.95 | 464.95 | |||||||||||||||
Intrinsic value as of December 31, 2006 (in €) | 41.73 | 49.05 | 64.97 | 52.13 | 44.13 | |||||||||||||||
Fair value as of December 31, 2006 (in €) | 41.87 | 47.38 | 61.43 | 48.52 | 43.72 | |||||||||||||||
Swap rate (in %) | 4.03 | 4.03 | 4.04 | 4.04 | 3.98 | |||||||||||||||
Volatility of the E.ON share (in %) | 25.81 | 26.22 | 26.29 | 25.46 | 22.57 | |||||||||||||||
Volatility of the Dow Jones STOXX Utilities Index (Price EUR) (in %) | 14.66 | 14.85 | 14.96 | 14.74 | 13.62 | |||||||||||||||
Correlation between the E.ON share price and the Dow Jones STOXX Utilities Index (Price EUR) | 0.6802 | 0.6896 | 0.7066 | 0.7382 | 0.7901 | |||||||||||||||
Most recent cash dividend paid on E.ON AG stock (in €) | 2.75 | 2.75 | 2.75 | 2.75 | 2.75 | |||||||||||||||
Dividend yield of the E.ON share (in %) | 2.67 | 2.67 | 2.67 | 2.67 | 2.67 | |||||||||||||||
Dividend yield of the Dow Jones STOXX Utilities Index (Price EUR) (in %) | 4.36 | 4.36 | 4.36 | 4.36 | 4.36 |
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7th tranche | 6th tranche | 5th tranche | 4th tranche | 3rd tranche | 2nd tranche | |||||||||||||||||||
SAR outstanding as of January 1, 2005 | — | 2,647,181 | 2,502,393 | 809,886 | 1,300,900 | 192,500 | ||||||||||||||||||
SAR granted in 2005 | 2,904,949 | 17,297 | — | — | — | — | ||||||||||||||||||
SAR exercised in 2005 | 7,521 | 55,983 | 1,860,682 | 503,477 | 983,650 | 161,000 | ||||||||||||||||||
SAR expired in 2005 | 12,000 | 20,000 | — | — | 7,000 | — | ||||||||||||||||||
Change in scope of consolidation in 2005 | — | (170,500 | ) | (28,000 | ) | (67,500 | ) | (151,500 | ) | (19,000 | ) | |||||||||||||
SAR outstanding as of December 31, 2005 | 2,885,428 | 2,417,995 | 613,711 | 238,909 | 158,750 | 12,500 | ||||||||||||||||||
SAR granted in 2006 | — | — | — | — | — | — | ||||||||||||||||||
SAR exercised in 2006 | 49,511 | 2,349,731 | 346,358 | 169,742 | 85,750 | 12,500 | ||||||||||||||||||
SAR expired in 2006 | 26,041 | 13,717 | 2,423 | — | — | — | ||||||||||||||||||
Change in scope of consolidation in 2006 | — | — | — | — | — | — | ||||||||||||||||||
SAR outstanding as of December 31, 2006 | 2,809,876 | 54,547 | 264,930 | 69,167 | 73,000 | — | ||||||||||||||||||
Gains on excercise in 2006 (in millions of €) | 2.0 | 106.8 | 16.9 | 5.7 | 2.3 | 0.7 | ||||||||||||||||||
Provision as of December 31, 2006 (in millions of €) | 117.6 | 2.6 | 16.3 | 3.4 | 3.2 | — | ||||||||||||||||||
Expense in 2006 (in millions of €) | 87.8 | 16.7 | 5.4 | 1.2 | 1.7 | 0.2 | ||||||||||||||||||
Average exercise gain per SAR (in €) | 40.31 | 45.45 | 48.84 | 33.24 | 27.27 | 54.66 |
1st tranche | ||||
Date of issuance | Jan. 2, 2006 | |||
Term | 3 years | |||
Target value at issuance (in €) | 79.22 | |||
Number of participants in year of issuance | 396 | |||
Number of Performance Rights issued | 458,641 | |||
Maximum cash amount (in €) | 237.66 |
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F-35
Table of Contents
1st tranche | ||||
E.ON AG share price on December 31, 2006 (in €) | 102,83 | |||
Level of the Dow Jones STOXX Utilities Index (Total Return EUR) on December 31, 2006 | 796.53 | |||
Intrinsic value as of December 31, 2006 (in €) | 42.00 | |||
Fair value as of December 31, 2006 (in €) | 58.54 | |||
Swap rate (in %) | 4.04 | |||
Volatility of the E.ON share (in %) | 19.65 | |||
Volatility of the Dow Jones STOXX Utilities Index (Total Return EUR) (in %) | 12.40 | |||
Correlation between the E.ON share price and the Dow Jones STOXX Utilities Index (Total Return EUR) | 0.8273 | |||
Most recent cash dividend paid on E.ON AG stock (in €) | 2.75 | |||
Dividend yield of the E.ON share (in %) | 2.67 |
1st tranche | ||||
Performance Rights granted in 2006 | 458,641 | |||
Settled Performance Rights in 2006 | 2,020 | |||
Performance Rights expired in 2006 | 2,020 | |||
Change in scope of consolidation in 2006 | — | |||
Performance Rights outstanding as of December 31, 2006 | 454,601 | |||
Cash amount paid in 2006 (in millions of €) | 0.1 | |||
Provision as of December 31, 2006 (in millions of €) | 8.9 | |||
Expense in 2006 (in millions of €) | 9.0 | |||
Average cash amount per Performance Right (in €) | 42.00 |
2006 | 2005 | |||||||
Central Europe | 44,148 | 42,835 | ||||||
Pan-European Gas | 12,653 | 11,025 | ||||||
U.K. | 14,599 | 12,106 | ||||||
Nordic | 5,697 | 5,381 | ||||||
U.S. Midwest | 2,919 | 3,007 | ||||||
Corporate Center | 437 | 434 | ||||||
Total | 80,453 | 74,788 | ||||||
F-36
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€ in millions | 2006 | 2005 | 2004 | |||||||||
Income/Loss from continuing operations | 4,930 | 4,355 | 4,011 | |||||||||
Income/Loss from discontinued operations | 127 | 3,059 | 328 | |||||||||
Income/Loss from cumulative effect of changes in accounting principles, net | — | (7 | ) | — | ||||||||
Net income | 5,057 | 7,407 | 4,339 | |||||||||
Weighted-average number of shares outstanding (in millions) | 659 | 659 | 657 | |||||||||
Earnings per share (in €) | ||||||||||||
from continuing operations | 7.48 | 6.61 | 6.11 | |||||||||
from discontinued operations | 0.19 | 4.64 | 0.50 | |||||||||
from cumulative effect of changes in accounting principles, net | 0.00 | (0.01 | ) | — | ||||||||
from net income | 7.67 | 11.24 | 6.61 | |||||||||
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Acquisition and production costs | ||||||||||||||||||||||||||||||||
Exchange | Change in | |||||||||||||||||||||||||||||||
January 1, | rate | scope of | December 31, | |||||||||||||||||||||||||||||
€ in millions | 2006 | differences | consolidation | Additions | Disposals | Transfers | Impairment | 2006 | ||||||||||||||||||||||||
Goodwill | 15,662 | (242 | ) | 73 | 52 | (12 | ) | (126 | ) | — | 15,407 | |||||||||||||||||||||
Intangible assets | 6,056 | 53 | (58 | ) | 145 | (98 | ) | (21 | ) | (45 | ) | 6,032 | ||||||||||||||||||||
Advance payments on intangible assets | 26 | — | — | 11 | — | (23 | ) | — | 14 | |||||||||||||||||||||||
Goodwill and intangible assets | 21,744 | (189 | ) | 15 | 208 | (110 | ) | (170 | ) | (45 | ) | 21,453 | ||||||||||||||||||||
Real estate and leasehold rights | 4,011 | 85 | (11 | ) | 55 | (48 | ) | (139 | ) | (5 | ) | 3,948 | ||||||||||||||||||||
Buildings | 7,761 | 7 | (59 | ) | 98 | (21 | ) | 274 | (25 | ) | 8,035 | |||||||||||||||||||||
Technical equipment, plant and machinery | 77,391 | 90 | 182 | 1,989 | (1,294 | ) | 885 | (379 | ) | 78,864 | ||||||||||||||||||||||
Other equipment, fixtures, furniture and office equipment | 3,348 | 26 | (78 | ) | 244 | (180 | ) | 7 | — | 3,367 | ||||||||||||||||||||||
Advance payments and construction in progress | 1,331 | (28 | ) | 42 | 1,800 | (32 | ) | (1,039 | ) | — | 2,074 | |||||||||||||||||||||
Property, plant and equipment | 93,842 | 180 | 76 | 4,186 | (1,575 | ) | (12 | ) | (409 | ) | 96,288 | |||||||||||||||||||||
Shares in unconsolidated affiliates | 676 | (2 | ) | (34 | ) | 263 | (144 | ) | (82 | ) | (12 | ) | 665 | |||||||||||||||||||
Shares in associated companies | 10,248 | 200 | (47 | ) | 1,216 | (3,247 | ) | 325 | (243 | ) | 8,452 | |||||||||||||||||||||
Other share investments | 2,230 | 3 | (62 | ) | 100 | (50 | ) | (246 | ) | (112 | ) | 1,863 | ||||||||||||||||||||
Non-current securities | 5,652 | 3 | (60 | ) | 3,070 | (1,527 | ) | (115 | ) | — | 7,023 | |||||||||||||||||||||
Financial assets | 18,806 | 204 | (203 | ) | 4,649 | (4,968 | ) | (118 | ) | (367 | ) | 18,003 | ||||||||||||||||||||
Total | 134,392 | 195 | (112 | ) | 9,043 | (6,653 | ) | (300 | ) | (821 | ) | 135,744 | ||||||||||||||||||||
Accumulated depreciation | Net book values | |||||||||||||||||||||||||||||||||||||||
Exchange | Change in | Fair value | ||||||||||||||||||||||||||||||||||||||
January 1, | rate | scope of | OCI | December 31, | December 31, | December 31, | ||||||||||||||||||||||||||||||||||
2006 | differences | consolidation | Additions | Disposals | Transfers | adjustments | 2006 | 2006 | 2005 | |||||||||||||||||||||||||||||||
Goodwill | 299 | (1) | (15 | ) | — | — | — | — | 283 | 15,124 | 15,363 | |||||||||||||||||||||||||||||
Intangible assets | 1,957 | 23 | (18 | ) | 374 | (39 | ) | — | — | 2,297 | 3,735 | 4,099 | ||||||||||||||||||||||||||||
Advance payments on intangible assets | — | — | — | — | — | — | — | — | 14 | 26 | ||||||||||||||||||||||||||||||
Goodwill and intangible assets | 2,256 | 22 | (33 | ) | 374 | (39 | ) | — | — | 2,580 | 18,873 | 19,488 | ||||||||||||||||||||||||||||
Real estate and leasehold rights | 303 | 1 | — | 12 | (1 | ) | (96 | ) | — | 219 | 3,729 | 3,708 | ||||||||||||||||||||||||||||
Buildings | 3,823 | 5 | (36 | ) | 222 | (2 | ) | 93 | — | 4,105 | 3,930 | 3,938 | ||||||||||||||||||||||||||||
Technical equipment, plant and machinery | 46,012 | 50 | (387 | ) | 2,121 | (905 | ) | (15 | ) | — | 46,876 | 31,988 | 31,379 | |||||||||||||||||||||||||||
Other equipment, fixtures, furniture and office equipment | 2,373 | 18 | (39 | ) | 201 | (174 | ) | (6 | ) | — | 2,373 | 994 | 975 | |||||||||||||||||||||||||||
Advance payments and construction in progress | 8 | — | — | — | (5 | ) | — | — | 3 | 2,071 | 1,323 | |||||||||||||||||||||||||||||
Property, plant and equipment | 52,519 | 74 | (462 | ) | 2,556 | (1,087 | ) | (24 | ) | — | 53,576 | 42,712 | 41,323 | |||||||||||||||||||||||||||
Shares in unconsolidated affiliates | 9 | — | (3 | ) | — | — | — | — | 6 | 659 | 667 | |||||||||||||||||||||||||||||
Shares in associated companies | 494 | (1 | ) | — | — | (1 | ) | 15 | (309 | ) | 198 | 8,254 | 9,754 | |||||||||||||||||||||||||||
Other share investments | (6,775 | ) | — | — | — | — | (31 | ) | (3,776 | ) | (10,582 | ) | 12,445 | 9,005 | ||||||||||||||||||||||||||
Non-current securities | (730 | ) | — | — | — | — | 703 | 106 | 79 | 6,944 | 6,382 | |||||||||||||||||||||||||||||
Financial assets | (7,002 | ) | (1 | ) | (3 | ) | — | (1 | ) | 687 | (3,979 | ) | (10,299 | ) | 28,302 | 25,808 | ||||||||||||||||||||||||
Total | 47,773 | 95 | (498 | ) | 2,930 | (1,127 | ) | 663 | (3,979 | ) | 45,857 | 89,887 | 86,619 | |||||||||||||||||||||||||||
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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, 2005 | 2,305 | 3,920 | 4,779 | 359 | 3,080 | 1 | 14,444 | 10 | 14,454 | |||||||||||||||||||||||||||
Goodwill additions/disposals | 115 | 481 | 21 | 7 | — | (1 | ) | 623 | — | 623 | ||||||||||||||||||||||||||
Other changes (1) | (1 | ) | (332 | ) | 155 | 2 | 472 | — | 296 | (10 | ) | 286 | ||||||||||||||||||||||||
Book value as of December 31, 2005 | 2,419 | 4,069 | 4,955 | 368 | 3,552 | — | 15,363 | — | 15,363 | |||||||||||||||||||||||||||
Goodwill additions/disposals | 65 | 142 | — | 3 | — | — | 210 | — | 210 | |||||||||||||||||||||||||||
Other changes (1) | (19 | ) | 53 | 1 | (73 | ) | (411 | ) | — | (449 | ) | — | (449 | ) | ||||||||||||||||||||||
Book value as of December 31, 2006 | 2,465 | 4,264 | 4,956 | 298 | 3,141 | — | 15,124 | — | 15,124 | |||||||||||||||||||||||||||
(1) | Other changes include transfers and exchange rate differences from the respective reporting year as well as reclassifications to discontinued operations (2006, Nordic segment: €(83) million; 2005, Pan-European Gas segment: €(326) million; other activities: €(10) million). |
F-39
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December 31, 2006 | December 31, 2005 | |||||||||||||||||||||||
Acquisition | Accumulated | Net book | Acquisition | Accumulated | Net book | |||||||||||||||||||
€ in millions | costs | amortization | value | costs | amortization | value | ||||||||||||||||||
Intangible assets subject to amortization | ||||||||||||||||||||||||
Marketing-related intangible assets | 186 | 176 | 10 | 223 | 123 | 100 | ||||||||||||||||||
thereof brand names | 186 | 176 | 10 | 223 | 123 | 100 | ||||||||||||||||||
Customer-related intangible assets | 2,457 | 962 | 1,495 | 2,419 | 765 | 1,654 | ||||||||||||||||||
thereof customer lists and customer relationships | 2,292 | 885 | 1,407 | 2,305 | 704 | 1,601 | ||||||||||||||||||
Contract-based intangible assets | 1,678 | 629 | 1,049 | 1,674 | 593 | 1,081 | ||||||||||||||||||
thereof concessions | 1,080 | 327 | 753 | 1,223 | 392 | 831 | ||||||||||||||||||
Technology-based intangible assets | 733 | 530 | 203 | 662 | 476 | 186 | ||||||||||||||||||
thereof computer software | 666 | 477 | 189 | 563 | 408 | 155 | ||||||||||||||||||
Intangible assets not subject to amortization | 992 | — | 992 | 1,104 | — | 1,104 | ||||||||||||||||||
thereof easements | 725 | — | 725 | 818 | — | 818 | ||||||||||||||||||
Total | 6,046 | 2,297 | 3,749 | 6,082 | 1,957 | 4,125 | ||||||||||||||||||
Weighted average | ||||||||
Acquisition costs | amortization period | |||||||
(€ in millions) | (in years) | |||||||
Intangible assets subject to amortization | ||||||||
Marketing-related intangible assets | — | |||||||
Customer-related intangible assets | 38 | 7 | ||||||
thereof customer lists and customer relationships | 29 | 4 | ||||||
Contract-based intangible assets | 31 | 10 | ||||||
Technology-based intangible assets | 102 | 3 | ||||||
thereof computer software | 92 | 3 | ||||||
Intangible assets not subject to amortization | 24 | |||||||
thereof licenses for exploration and production | 22 | |||||||
Total | 195 | |||||||
F-40
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€ in millions | ||||
2007 | 333 | |||
2008 | 292 | |||
2009 | 231 | |||
2010 | 168 | |||
2011 | 156 | |||
Total | 1,180 | |||
F-41
Table of Contents
E.ON’s | ||||||||||||||||
E.ON’s | E.ON’s | Accumulated | E.ON’s | |||||||||||||
Ownership | Total | depreciation & | Construction | |||||||||||||
interest | acquisition cost | amortization | work in progress | |||||||||||||
Name of plants by type | in % | (€ in millions) | (€ in millions) | (€ in millions) | ||||||||||||
Nuclear | ||||||||||||||||
Isar 2 | 75.00 | 1,968 | 1,842 | 7 | ||||||||||||
Gundremmingen B | 25.00 | 100 | 83 | — | ||||||||||||
Gundremmingen C | 25.00 | 112 | 95 | — | ||||||||||||
Lignite | ||||||||||||||||
Lippendorf S | 50.00 | 533 | 399 | — | ||||||||||||
Hard Coal | ||||||||||||||||
Bexbach 1 | 8.33 | 64 | 60 | — | ||||||||||||
Trimble County 1 (U.S.) | 75.00 | 459 | 176 | 7 | ||||||||||||
Trimble County 2 (U.S.) | 75.00 | — | — | 90 | ||||||||||||
Rostock | 50.38 | 317 | 292 | — | ||||||||||||
Hydroelectric/Wind | ||||||||||||||||
Nymølle Havspark/Rødsand (DK) | 20.00 | 44 | 7 | — | ||||||||||||
Nußdorf | 53.00 | 55 | 41 | — | ||||||||||||
Ering | 50.00 | 31 | 28 | — | ||||||||||||
Egglfing | 50.00 | 47 | 43 | — |
€ in millions | 2006 | thereof RAG | 2005 | thereof RAG | 2004 | thereof RAG | ||||||||||||||||||
Sales | 49,475 | 18,177 | 59,533 | 21,670 | 55,790 | 18,240 | ||||||||||||||||||
Net income | 3,763 | 726 | 1,782 | 91 | 2,415 | — | ||||||||||||||||||
E.ON’s share of net income/loss | 1,332 | 284 | 550 | 36 | 881 | — | ||||||||||||||||||
Other (1) | (496 | ) | (284 | ) | (117 | ) | (36 | ) | (233 | ) | — | |||||||||||||
Income from companies accounted for under the equity method | 836 | — | 433 | — | 648 | — | ||||||||||||||||||
(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. |
F-42
Table of Contents
December 31, | ||||||||
€ in millions | 2006 | 2005 | ||||||
Fixed assets | 43,469 | 47,547 | ||||||
Non-fixed assets and prepaid expenses | 27,348 | 32,165 | ||||||
Provisions | 24,333 | 28,611 | ||||||
Liabilities and deferred income | 26,863 | 30,307 | ||||||
Minority interests | 736 | 2,152 | ||||||
Net assets | 18,885 | 18,642 | ||||||
E.ON’s share in equity | 5,934 | 6,788 | ||||||
Other (1) | 2,033 | 2,901 | ||||||
Investment in companies accounted for under the equity method | 7,967 | 9,689 | ||||||
(1) | ‘Other’ primarily includes adjustments to conform to E.ON accounting policies, goodwill, fair value adjustments due to purchase price allocations, intercompany eliminations and impairments. |
F-43
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December 31, 2006 | December 31, 2005 | |||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||
Between 1 and 5 years | 2,962 | 2,941 | 25 | 4 | 2,472 | 2,490 | 5 | 23 | ||||||||||||||||||||||||
More than 5 years | 3,310 | 3,241 | 72 | 3 | 2,747 | 2,865 | 3 | 121 | ||||||||||||||||||||||||
Subtotal | 6,272 | 6,182 | 97 | 7 | 5,219 | 5,355 | 8 | 144 | ||||||||||||||||||||||||
Non-fixed-term securities | 2,600 | 13,207 | — | 10,607 | 2,624 | 10,032 | 1 | 7,409 | ||||||||||||||||||||||||
Total | 8,872 | 19,389 | 97 | 10,614 | 7,843 | 15,387 | 9 | 7,553 | ||||||||||||||||||||||||
December 31, 2006 | ||||||||||||||||||||||||
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 | ||||||||||||||||||||||||
Between 1 and 5 years | 2,265 | 25 | 3 | — | 2,268 | 25 | ||||||||||||||||||
More than 5 years | 2,499 | 72 | — | — | 2,499 | 72 | ||||||||||||||||||
Subtotal | 4,764 | 97 | 3 | — | 4,767 | 97 | ||||||||||||||||||
Non-fixed-term securities | — | — | 3 | — | 3 | — | ||||||||||||||||||
Total | 4,764 | 97 | 6 | — | 4,770 | 97 | ||||||||||||||||||
F-44
Table of Contents
December 31, | ||||||||
€ in millions | 2006 | 2005 | ||||||
Raw materials and supplies by segment | ||||||||
Central Europe | 1,165 | 904 | ||||||
Pan-European Gas | 25 | 28 | ||||||
U.K. | 646 | 326 | ||||||
Nordic | 257 | 223 | ||||||
U.S. Midwest | 189 | 237 | ||||||
Total | 2,282 | 1,718 | ||||||
Work in progress | 67 | 58 | ||||||
Finished products | 1 | 10 | ||||||
Goods purchased for resale | 1,640 | 671 | ||||||
Inventories | 3,990 | 2,457 | ||||||
F-45
Table of Contents
December 31, 2006 | December 31, 2005 | |||||||||||||||
With a | With a | With a | With a | |||||||||||||
remaining | remaining | remaining | remaining | |||||||||||||
term up to | term of more | term up to | term of more | |||||||||||||
€ in millions | 1 year | than 1 year | 1 year | than 1 year | ||||||||||||
Financial receivables from affiliated companies | 287 | 159 | 115 | 251 | ||||||||||||
Financial receivables from associated companies and other share investments | 164 | 435 | 87 | 452 | ||||||||||||
Other financial assets | 966 | 800 | 858 | 1,356 | ||||||||||||
Financial receivables and other financial assets | 1,417 | 1,394 | 1,060 | 2,059 | ||||||||||||
Trade receivables | 9,756 | — | 8,179 | 90 | ||||||||||||
Operating receivables from affiliated companies | 70 | — | 62 | — | ||||||||||||
Operating receivables from associated companies and other share investments | 970 | 6 | 748 | — | ||||||||||||
Reinsurance claim due from the mutual insurance fund Versorgungskasse Energie VVaG | — | — | 80 | 1,495 | ||||||||||||
U.S. regulatory assets | 47 | 232 | 52 | 69 | ||||||||||||
Other operating assets | 7,065 | 3,105 | 8,832 | 1,747 | ||||||||||||
Operating receivables and other operating assets | 17,908 | 3,343 | 17,953 | 3,401 | ||||||||||||
Prepaid expenses | 429 | 210 | 227 | 129 | ||||||||||||
Receivables, other assets and prepaid expenses | 19,754 | 4,947 | 19,240 | 5,589 | ||||||||||||
F-46
Table of Contents
€ in millions | 2006 | 2005 | ||||||
Balance as of January 1 | 550 | 456 | ||||||
Changes affecting income | 139 | 37 | ||||||
Changes not affecting income | (64 | ) | 57 | |||||
Balance as of December 31 | 625 | 550 | ||||||
December 31, | ||||||||
€ in millions | 2006 | 2005 | ||||||
Current securities with an original maturity greater than 3 months | 4,399 | 3,996 | ||||||
Fixed-term deposits with an original maturity greater than 3 months | 49 | 1,457 | ||||||
Current securities and fixed-term deposits | 4,448 | 5,453 | ||||||
December 31, 2006 | December 31, 2005 | |||||||||||||||||||||||||||||||
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 | 259 | 257 | 2 | — | 406 | 433 | 1 | 28 | ||||||||||||||||||||||||
Between 1 and 5 years | 10 | 10 | — | — | — | — | — | — | ||||||||||||||||||||||||
Subtotal | 269 | 267 | 2 | — | 406 | 433 | 1 | 28 | ||||||||||||||||||||||||
Non-fixed-term securities | 2,604 | 4,172 | 22 | 1,590 | 2,823 | 3,605 | 23 | 805 | ||||||||||||||||||||||||
Total | 2,873 | 4,439 | 24 | 1,590 | 3,229 | 4,038 | 24 | 833 | ||||||||||||||||||||||||
F-47
Table of Contents
December 31, 2006 | ||||||||||||||||||||||||
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 | 221 | 2 | — | — | 221 | 2 | ||||||||||||||||||
Between 1 and 5 years | 10 | — | — | — | 10 | — | ||||||||||||||||||
Subtotal | 231 | 2 | — | — | 231 | 2 | ||||||||||||||||||
Non-fixed-term securities | 137 | 22 | — | — | 137 | 22 | ||||||||||||||||||
Total | 368 | 24 | — | — | 368 | 24 | ||||||||||||||||||
F-48
Table of Contents
December 31, | ||||||||||||
€ in millions | 2006 | 2005 | 2004 | |||||||||
Legal reserves | 45 | 45 | 45 | |||||||||
Other retained earnings | 26,259 | 25,816 | 19,958 | |||||||||
Total | 26,304 | 25,861 | 20,003 | |||||||||
F-49
Table of Contents
December 31, 2006 | December 31, 2005 | December 31, 2004 | ||||||||||||||||||||||||||||||||||
Tax | Tax | Tax | ||||||||||||||||||||||||||||||||||
€ in millions | Before tax | effect | Net of tax | Before tax | effect | Net of tax | Before tax | effect | Net of tax | |||||||||||||||||||||||||||
Foreign currency translation adjustments | 55 | (20 | ) | 35 | 536 | 78 | 614 | 139 | (25 | ) | 114 | |||||||||||||||||||||||||
Reclassification adjustments affecting income | 132 | — | 132 | 6 | — | 6 | 11 | — | 11 | |||||||||||||||||||||||||||
Subtotal | 187 | (20 | ) | 167 | 542 | 78 | 620 | 150 | (25 | ) | 125 | |||||||||||||||||||||||||
Unrealized holding gains/(losses) fromavailable-for-sale securities | 4,161 | (642 | ) | 3,519 | 5,709 | (851 | ) | 4,858 | 1,349 | (243 | ) | 1,106 | ||||||||||||||||||||||||
Reclassification adjustments affecting income | (394 | ) | 14 | (380 | ) | (169 | ) | 9 | (160 | ) | (107 | ) | (5 | ) | (112 | ) | ||||||||||||||||||||
Subtotal | 3,767 | (628 | ) | 3,139 | 5,540 | (842 | ) | 4,698 | 1,242 | (248 | ) | 994 | ||||||||||||||||||||||||
Additional minimum pension liability | 922 | (576 | ) | 346 | (580 | ) | 268 | (312 | ) | (935 | ) | 337 | (598 | ) | ||||||||||||||||||||||
Cash flow hedges | (329 | ) | 108 | (221 | ) | 65 | (8 | ) | 57 | 89 | (33 | ) | 56 | |||||||||||||||||||||||
Total | 4,547 | (1,116 | ) | 3,431 | 5,567 | (504 | ) | 5,063 | 546 | 31 | 577 | |||||||||||||||||||||||||
December 31, | ||||||||
€ in millions | 2006 | 2005 | ||||||
Central Europe | 2,722 | 2,618 | ||||||
Pan-European Gas | 289 | 255 | ||||||
U.K. | 63 | 81 | ||||||
Nordic | 1,698 | 1,659 | ||||||
U.S. Midwest | 78 | 85 | ||||||
Corporate Center | 67 | 36 | ||||||
Total | 4,917 | 4,734 | ||||||
F-50
Table of Contents
December 31, 2006 | December 31, 2006 | |||||||||||||||
Before adjustment | After adjustment | |||||||||||||||
of minimum | of minimum | |||||||||||||||
liability and | Adjustment | liability and | ||||||||||||||
adoption of | of minimum | Adoption of | adoption of | |||||||||||||
€ in millions | SFAS 158 | liability | SFAS 158 | SFAS 158 | ||||||||||||
Intangible assets | 10 | — | (10 | ) | — | |||||||||||
Other operating assets | 405 | — | (403 | ) | 2 | |||||||||||
Provisions for pensions | 3,920 | (529 | ) | 494 | 3,885 | |||||||||||
Accumulated other comprehensive income | (1,402 | ) | 346 | (550 | ) | (1,606 | ) |
2006 | 2005 | |||||||||||||||||||||||
€ in millions | Total | Domestic | Foreign | Total | Domestic | Foreign | ||||||||||||||||||
Projected benefit obligation as of January 1 | 17,712 | 9,144 | 8,568 | 15,918 | 8,255 | 7,663 | ||||||||||||||||||
Employer service cost | 288 | 173 | 115 | 232 | 144 | 88 | ||||||||||||||||||
Interest cost | 767 | 361 | 406 | 777 | 372 | 405 | ||||||||||||||||||
Change in scope of consolidation | 1 | 8 | (7 | ) | (375 | ) | (197 | ) | (178 | ) | ||||||||||||||
Prior service cost | 9 | — | 9 | 32 | 15 | 17 | ||||||||||||||||||
Actuarial gains (−)/losses | (739 | ) | (433 | ) | (306 | ) | 1,618 | 958 | 660 | |||||||||||||||
Exchange rate differences | 51 | — | 51 | 352 | — | 352 | ||||||||||||||||||
Other | 5 | 3 | 2 | — | — | — | ||||||||||||||||||
Pensions paid | (847 | ) | (416 | ) | (431 | ) | (842 | ) | (403 | ) | (439 | ) | ||||||||||||
Projected benefit obligation as of December 31 | 17,247 | 8,840 | 8,407 | 17,712 | 9,144 | 8,568 | ||||||||||||||||||
F-51
Table of Contents
2006 | 2005 | |||||||||||||||||||||||
€ in millions | Total | Domestic | Foreign | Total | Domestic | Foreign | ||||||||||||||||||
Fair value of plan assets as of January 1 | 8,097 | 307 | 7,790 | 6,399 | 316 | 6,083 | ||||||||||||||||||
Actual return on plan assets | 489 | 80 | 409 | 1,198 | 15 | 1,183 | ||||||||||||||||||
Company contributions | 5,241 | 5,126 | 115 | 733 | — | 733 | ||||||||||||||||||
Employee contributions | 21 | — | 21 | 17 | — | 17 | ||||||||||||||||||
Change in scope of consolidation | (3 | ) | — | (3 | ) | (58 | ) | (11 | ) | (47 | ) | |||||||||||||
Exchange rate differences | 86 | — | 86 | 262 | — | 262 | ||||||||||||||||||
Pensions paid | (575 | ) | (146 | ) | (429 | ) | (451 | ) | (13 | ) | (438 | ) | ||||||||||||
Other | 8 | — | 8 | (3 | ) | — | (3 | ) | ||||||||||||||||
Fair value of plan assets as of December 31 | 13,364 | 5,367 | 7,997 | 8,097 | 307 | 7,790 | ||||||||||||||||||
Funded status | 3,883 | 3,473 | 410 | 9,615 | 8,837 | 778 | ||||||||||||||||||
F-52
Table of Contents
in % | ||||
Germany | 3.0 | |||
United Kingdom | 4.9 | |||
United States | 11.0 |
Target portfolio | December 31, 2006 | December 31, 2005 | ||||||||||||||||||||||
in % | Domestic | Foreign | Domestic | Foreign | Domestic | Foreign | ||||||||||||||||||
Equity securities | 11 | 23 | 1 | 29 | 13 | 46 | ||||||||||||||||||
Debt securities | 69 | 68 | 3 | 63 | 76 | 47 | ||||||||||||||||||
Real estate | 10 | 9 | 4 | 5 | 3 | 5 | ||||||||||||||||||
Fixed-term deposits | — | — | 91 | — | — | 2 | ||||||||||||||||||
Other | 10 | — | 1 | 3 | 8 | — |
December 31, | ||||||||
€ in millions | 2006 | 2005 | ||||||
Funded status (represents in 2006 net amount recognized) | 3,883 | 9,615 | ||||||
Unrecognized actuarial loss | — | (3,192 | ) | |||||
Unrecognized prior service cost | — | (27 | ) | |||||
Net amount recognized | 3,883 | 6,396 | ||||||
December 31, | ||||||||
€ in millions | 2006 | 2005 | ||||||
Provisions for pensions | 3,885 | 8,720 | ||||||
thereof current | 116 | 430 | ||||||
thereof non-current | 3,769 | 8,290 | ||||||
Intangible assets | — | (29 | ) | |||||
Accumulated other comprehensive income | — | (1,986 | ) | |||||
Other operating assets | (2 | ) | (309 | ) | ||||
Net amount recognized | 3,883 | 6,396 | ||||||
F-53
Table of Contents
€ in millions | 2006 | 2005 | 2004 | |||||||||
Employer service cost | 268 | 214 | 189 | |||||||||
Interest cost | 767 | 777 | 783 | |||||||||
Expected return on plan assets | (536 | ) | (448 | ) | (422 | ) | ||||||
Prior service cost | 16 | 33 | 25 | |||||||||
Net amortization of actuarial gains (−)/losses | 125 | 85 | 40 | |||||||||
Total | 640 | 661 | 615 | |||||||||
€ in millions | ||||
2007 | 883 | |||
2008 | 909 | |||
2009 | 938 | |||
2010 | 958 | |||
2011 | 985 | |||
2012-2016 | 5,117 | |||
Total | 9,790 | |||
F-54
Table of Contents
December 31, 2006 | December 31, 2005 | |||||||||||||||||||||||||||||||
United | United | United | United | |||||||||||||||||||||||||||||
Germany | Kingdom | States | Germany | Kingdom | States | |||||||||||||||||||||||||||
CTA | CTA | |||||||||||||||||||||||||||||||
in % | plans | Other | plans | Other | ||||||||||||||||||||||||||||
Discount rate | 4.50 | 4.50 | 5.10 | 5.95 | — | 4.00 | 4.80 | 5.50 | ||||||||||||||||||||||||
Salary increase rate | 2.75 | 2.75 | 4.00 | 5.25 | — | 2.75 | 4.00 | 5.25 | ||||||||||||||||||||||||
Expected return on plan assets | 4.90 | 4.50 | 5.90 | 8.25 | — | 4.00 | 5.50 | 8.25 | ||||||||||||||||||||||||
Pension increase rate | 1.50 | 1.50 | 3.00 | — | — | 1.50 | 2.80 | — |
• | retirement costs shown insub-items 1ab) and 1ba) for decommissioning of nuclear power plants in Germany in the amount of €8,515 million (2005: €8,400 million) and in Sweden in the amount of €473 million (2005: €403 million), | |
• | reclamation measures reported undersub-item 8) related to the sites of non-nuclear power plants, including removal of electricity transmission and distribution equipment in the amount of €390 million (2005: €388 million), and | |
• | reclamation at gas storage facilities in the amount of €157 million (2005: €90 million) and at opencast mining facilities in the amount of €59 million (2005: €61 million) as well as the decommissioning of oil and gas field infrastructure in the amount of €354 million (2005: €319 million). These obligations are also reported undersub-item 8). |
€ in millions | 2006 | 2005 | ||||||
Balance as of January 1 | 9,661 | 9,348 | ||||||
Liabilities incurred in the current period | 68 | 37 | ||||||
Liabilities settled in the current period | (161 | ) | (181 | ) | ||||
Changes in scope of consolidation | 24 | 33 | ||||||
Accretion | 524 | 511 | ||||||
Revision in estimated cash flows | (187 | ) | (126 | ) | ||||
Other changes | 19 | 39 | ||||||
Balance as of December 31 | 9,948 | 9,661 | ||||||
F-55
Table of Contents
December 31, 2006 | December 31, 2005 | |||||||||||||||
€ in millions | current | non-current | current | non-current | ||||||||||||
Provisions for nuclear waste management (1) | 375 | 13,271 | 431 | 12,931 | ||||||||||||
Disposal of nuclear fuel rods | 202 | 4,883 | 279 | 4,724 | ||||||||||||
Asset retirement obligation (SFAS 143) | 165 | 8,823 | 143 | 8,660 | ||||||||||||
Waste disposal | 8 | 459 | 9 | 416 | ||||||||||||
less advance payments | — | (894 | ) | — | (869 | ) | ||||||||||
Provisions for taxes (2) | 1,721 | 2,330 | 1,948 | 1,052 | ||||||||||||
Provisions for personnel costs (3) | 726 | 637 | 729 | 811 | ||||||||||||
Provisions for supplier-related contracts (4) | 2,802 | 268 | 1,949 | 201 | ||||||||||||
Provisions for customer-related contracts (5) | 229 | 43 | 254 | 52 | ||||||||||||
U.S. regulatory liabilities (6) | 27 | 467 | — | 505 | ||||||||||||
Provisions for environmental remediation (7) | 14 | 516 | 16 | 293 | ||||||||||||
Provisions for environmental improvements, including land reclamation (8) | 310 | 1,462 | 47 | 1,678 | ||||||||||||
Miscellaneous (9) | 1,598 | 1,412 | 656 | 1,589 | ||||||||||||
Total | 7,802 | 20,406 | 6,030 | 19,112 | ||||||||||||
F-56
Table of Contents
• | the costs of fuel reprocessing and | |
• | the costs of outbound transportation and the intermediate storage of nuclear waste. |
• | contractual costs for procuring intermediate containers and intermediateon-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. |
F-57
Table of Contents
F-58
Table of Contents
December 31, 2006 | December 31, 2005 | |||||||||||||||
€ in millions | current | non-current | current | non-current | ||||||||||||
Financial liabilities | 3,440 | 9,959 | 3,807 | 10,555 | ||||||||||||
Operating liabilities | 14,287 | 4,927 | 13,302 | 5,750 | ||||||||||||
Deferred income | 317 | 919 | 202 | 615 | ||||||||||||
Total | 18,044 | 15,805 | 17,311 | 16,920 | ||||||||||||
December 31, 2006 | December 31, 2005 | |||||||||||||||||||||||||||||||||||||||
With a remaining term | Average | With a remaining term | Average | |||||||||||||||||||||||||||||||||||||
of | interest rate | of | interest rate | |||||||||||||||||||||||||||||||||||||
up to | 1 to | over | up to 1 Year | up to | 1 to | over | up to 1 Year | |||||||||||||||||||||||||||||||||
€ in millions | Total | 1 Year | 5 Years | 5 Years | (in %) | Total | 1 Year | 5 Years | 5 Years | (in %) | ||||||||||||||||||||||||||||||
Bonds (including Medium Term Note programs) | 9,003 | 540 | 5,005 | 3,458 | 6,1 | 9,538 | 732 | 5,195 | 3,611 | 5,7 | ||||||||||||||||||||||||||||||
Commercial paper | 366 | 366 | — | — | 3,9 | — | — | — | — | — | ||||||||||||||||||||||||||||||
Bank loans/Liabilities to banks | 1,237 | 353 | 691 | 193 | 4,6 | 1,530 | 424 | 729 | 377 | 5,0 | ||||||||||||||||||||||||||||||
Bills payable | 35 | 33 | 2 | — | 4,8 | 42 | — | 42 | — | — | ||||||||||||||||||||||||||||||
Other financial liabilities | 751 | 177 | 144 | 430 | 4,7 | 1,306 | 742 | 165 | 399 | 2,7 | ||||||||||||||||||||||||||||||
Financial liabilities to banks and third parties | 11,392 | 1,469 | 5,842 | 4,081 | 12,416 | 1,898 | 6,131 | 4,387 | ||||||||||||||||||||||||||||||||
Financial liabilities to affiliated companies | 154 | 147 | 1 | 6 | 4.3 | 134 | 128 | — | 6 | 3.1 | ||||||||||||||||||||||||||||||
Financial liabilities to associated companies and other share investments | 1,853 | 1,824 | 12 | 17 | 5.0 | 1,812 | 1,781 | 12 | 19 | 4.4 | ||||||||||||||||||||||||||||||
Financial liabilities to group companies | 2,007 | 1,971 | 13 | 23 | 1,946 | 1,909 | 12 | 25 | ||||||||||||||||||||||||||||||||
Financial liabilities | 13,399 | 3,440 | 5,855 | 4,104 | 14,362 | 3,807 | 6,143 | 4,412 | ||||||||||||||||||||||||||||||||
Accounts payable | 5,305 | 5,305 | — | — | 5,288 | 5,272 | 16 | — | ||||||||||||||||||||||||||||||||
Operating liabilities to affiliated companies | 123 | 75 | 3 | 45 | 105 | 59 | 3 | 43 | ||||||||||||||||||||||||||||||||
Operating liabilities to associated companies and other share investments | 222 | 201 | 13 | 8 | 188 | 98 | 70 | 20 | ||||||||||||||||||||||||||||||||
Capital expenditure grants | 267 | 23 | 83 | 161 | 270 | 19 | 96 | 155 | ||||||||||||||||||||||||||||||||
Construction grants from energy consumers | 3,471 | 361 | 1,279 | 1,831 | 3,674 | 420 | 736 | 2,518 | ||||||||||||||||||||||||||||||||
Advance payments | 409 | 400 | 1 | 8 | 488 | 488 | — | — | ||||||||||||||||||||||||||||||||
Other operating liabilities | 9,417 | 7,922 | 1,256 | 239 | 9,039 | 6,946 | 668 | 1,425 | ||||||||||||||||||||||||||||||||
thereof taxes | 871 | 871 | 614 | 614 | ||||||||||||||||||||||||||||||||||||
thereof social security contributions | 108 | 108 | 63 | 63 | ||||||||||||||||||||||||||||||||||||
Operating liabilities | 19,214 | 14,287 | 2,635 | 2,292 | 19,052 | 13,302 | 1,589 | 4,161 | ||||||||||||||||||||||||||||||||
Liabilities | 32,613 | 17,727 | 8,490 | 6,396 | 33,414 | 17,109 | 7,732 | 8,573 | ||||||||||||||||||||||||||||||||
F-59
Table of Contents
• | €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 | |
• | GBP 500 million or €746 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 €1.455 billion issued by E.ON International Finance with a coupon of 6.375 percent and a maturity in June 2032 |
F-60
Table of Contents
F-61
Table of Contents
• | GBP 250 million or €373 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 €12 million was held by external investors | |
• | GBP 150 million or €224 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, of which GBP 0.4 million or approximately €0.6 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 €311 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 €131 million was held by external investors |
F-62
Table of Contents
Repayment | Repayment | Repayment | Repayment | Repayment | Repayment | |||||||||||||||||||||||
€ in millions | in 2007 | in 2008 | in 2009 | in 2010 | in 2011 | after 2011 | Total | |||||||||||||||||||||
Bonds (including MTN programs) | 540 | 184 | 4,512 | 307 | 2 | 3,458 | 9,003 | |||||||||||||||||||||
Commercial paper | 366 | — | — | — | — | — | 366 | |||||||||||||||||||||
Bank loans/Liabilities due to banks | 353 | 80 | 62 | 45 | 504 | 193 | 1,237 | |||||||||||||||||||||
Bills payable | 33 | 2 | — | — | — | — | 35 | |||||||||||||||||||||
Other financial liabilities | 177 | 100 | 22 | 12 | 10 | 430 | 751 | |||||||||||||||||||||
Financial liabilities to banks and third parties | 1,469 | 366 | 4,596 | 364 | 516 | 4,081 | 11,392 | |||||||||||||||||||||
Used credit lines | 125 | — | — | — | — | 1 | 126 | |||||||||||||||||||||
Unused credit lines | 5,964 | 1 | 1 | 153 | 4,848 | 2 | 10,969 | |||||||||||||||||||||
Used and unused credit lines (1) | 6,089 | 1 | 1 | 153 | 4,848 | 3 | 11,095 | |||||||||||||||||||||
(1) | Amount does not include the €37.1 billion syndicated term and guarantee facility agreement, which is described onpage F-61. |
F-63
Table of Contents
December 31, 2006 | ||||||||||||||||||||
€ in millions | 0 - 3% | 3.1 - 7% | 7.1 - 10% | more than 10% | Total | |||||||||||||||
Bonds (including MTN programs) | — | 8,869 | 134 | — | 9,003 | |||||||||||||||
Commercial paper | 132 | 234 | — | — | 366 | |||||||||||||||
Bank loans/Liabilities due to banks | 149 | 1,087 | 1 | — | 1,237 | |||||||||||||||
Bills payable | — | 35 | — | — | 35 | |||||||||||||||
Other financial liabilities | 138 | 584 | 14 | 15 | 751 | |||||||||||||||
Financial liabilities to banks and third parties | 419 | 10,809 | 149 | 15 | 11,392 | |||||||||||||||
December 31, | ||||||||
€ in millions | 2006 | 2005 | ||||||
Bank loans collateralized by mortgages on real estate | 94 | 141 | ||||||
Other collateralized bank loans | 37 | 51 | ||||||
Uncollateralized bank loans, drawings on credit lines, current loans | 1,106 | 1,338 | ||||||
Total | 1,237 | 1,530 | ||||||
F-64
Table of Contents
F-65
Table of Contents
F-66
Table of Contents
€ in millions | Total | Less than 1 Year | 1 to 3 Years | 3 to 5 Years | After 5 Years | |||||||||||||||
Long-term purchase commitments/obligations | ||||||||||||||||||||
Fossil fuel purchase obligations | ||||||||||||||||||||
Natural gas | 221,358 | 21,309 | 37,383 | 38,883 | 123,783 | |||||||||||||||
Oil | 75 | 10 | 27 | 25 | 13 | |||||||||||||||
Coal | 3,280 | 1,203 | 1,378 | 687 | 12 | |||||||||||||||
Lignite and other fossil fuels | 1,089 | 33 | 66 | 66 | 924 | |||||||||||||||
Subtotal, fossil fuels | 225,802 | 22,555 | 38,854 | 39,661 | 124,732 | |||||||||||||||
Electricity purchase obligations | 7,915 | 3,209 | 2,137 | 661 | 1,908 | |||||||||||||||
Other purchase obligations | 2,462 | 485 | 439 | 254 | 1,284 | |||||||||||||||
Subtotal, long-term purchase commitments/obligations | 236,179 | 26,249 | 41,430 | 40,576 | 127,924 | |||||||||||||||
Other purchase commitments/obligations | ||||||||||||||||||||
Major repairs | 82 | 64 | 18 | — | — | |||||||||||||||
Environmental protection measures | — | — | — | — | — | |||||||||||||||
Other (e.g., capital expenditure commitments) | 5,182 | 2,160 | 2,127 | 638 | 257 | |||||||||||||||
Subtotal | 5,264 | 2,224 | 2,145 | 638 | 257 | |||||||||||||||
Other financial obligations | 3,631 | 2,477 | 991 | 1 | 162 | |||||||||||||||
Loan commitments | 257 | 249 | 1 | 4 | 3 | |||||||||||||||
Total | 245,331 | 31,199 | 44,567 | 41,219 | 128,346 | |||||||||||||||
€ in millions | ||||
2007 | 205 | |||
2008 | 142 | |||
2009 | 89 | |||
2010 | 84 | |||
2011 | 63 | |||
Thereafter | 237 | |||
Total | 820 | |||
F-67
Table of Contents
€ in millions | 2006 | 2005 | 2004 | |||||||||
Cash paid during the year for | ||||||||||||
Interest, net of amounts capitalized | 1,029 | 965 | 1,100 | |||||||||
Income taxes, net of refunds | 837 | 1,052 | 1,352 | |||||||||
Non-cash investing and financing activities | ||||||||||||
Exchanges and contributions of assets as part of acquisitions | 138 | 171 | — | |||||||||
Funding of external fund assets for pension obligations through transfer of fixed-term deposits and securities | 5,126 | — | — | |||||||||
Loan notes issued in lieu of cash purchase price payments for E.ON Ruhrgas U.K. North Sea | — | 595 | — | |||||||||
Increase of stakes in subsidiaries in exchange for distribution of E.ON AG shares to minority shareholders | — | 35 | 182 |
F-68
Table of Contents
F-69
Table of Contents
• | 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. |
F-70
Table of Contents
• | 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 forwards 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. | |
• | Certain long-term energy contracts are valued by the use of valuation models that use internal data. |
F-71
Table of Contents
Total Volume of Foreign Currency, Interest Rate and | Total volume of derivative financial instruments | |||||||||||||||
Equity-Based Derivatives | December 31, 2006 | December 31, 2005 | ||||||||||||||
Remaining maturities | Nominal | Fair | Nominal | Fair | ||||||||||||
€ in millions | value | value | value | value | ||||||||||||
FX forward transactions | ||||||||||||||||
Buy | 4,532.7 | (27.1 | ) | 4,091.3 | 79.2 | |||||||||||
Sell | 6,982.4 | 19.4 | 8,331.2 | (81.7 | ) | |||||||||||
FX currency options | ||||||||||||||||
Buy | 7.4 | 0.1 | 227.7 | 32.8 | ||||||||||||
Sell | — | — | 139.6 | (39.0 | ) | |||||||||||
Subtotal | 11,522.5 | (7.6 | ) | 12,789.8 | (8.7 | ) | ||||||||||
Cross-currency swaps | ||||||||||||||||
up to 1 year | 1,457.8 | 9.7 | 1,734.7 | 34.7 | ||||||||||||
1 year to 5 years | 10,812.9 | (22.8 | ) | 8,163.2 | 57.8 | |||||||||||
more than 5 years | 6,228.6 | 20.5 | 6,358.4 | 66.6 | ||||||||||||
Cross-currency interest rate swaps | ||||||||||||||||
up to 1 year | — | — | 125.0 | 13.1 | ||||||||||||
1 year to 5 years | 321.9 | (17.0 | ) | 316.4 | 5.0 | |||||||||||
more than 5 years | — | — | — | — | ||||||||||||
Subtotal | 18,821.2 | (9.6 | ) | 16,697.7 | 177.2 | |||||||||||
Interest rate swaps | ||||||||||||||||
Fixed-rate payer | ||||||||||||||||
up to 1 year | 150.9 | 0.8 | 612.2 | (11.8 | ) | |||||||||||
1 year to 5 years | 1,221.8 | (3.1 | ) | 1,294.9 | (44.1 | ) | ||||||||||
more than 5 years | 919.8 | (14.1 | ) | 1,033.5 | (18.0 | ) | ||||||||||
Fixed-rate receiver | ||||||||||||||||
up to 1 year | 55.1 | — | — | — | ||||||||||||
1 year to 5 years | 5,263.9 | (75.5 | ) | 5,364.4 | 64.3 | |||||||||||
more than 5 years | 759.3 | (14.3 | ) | 1,196.4 | (20.7 | ) | ||||||||||
Subtotal | 8,370.8 | (106.2 | ) | 9,501.4 | (30.3 | ) | ||||||||||
Other derivatives | 636.7 | 31.0 | — | — | ||||||||||||
Subtotal | 636.7 | 31.0 | — | — | ||||||||||||
Total | 39,351.2 | (92.4 | ) | 38,988.9 | 138.2 | |||||||||||
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Total Volume of Electricity, Gas, Coal, Oil and | Thereof Trading | |||||||||||||||||||||||
Emissions-Related Financial Derivatives | December 31, 2006 | December 31, 2006 | December 31, 2005 | |||||||||||||||||||||
Remaining maturities | Nominal | Fair | Nominal | Fair | Nominal | Fair | ||||||||||||||||||
€ in millions &nbsp; | value | value | value | value | value | value | ||||||||||||||||||
Electricity forwards | ||||||||||||||||||||||||
up to 1 year | 15,336.4 | (401.5 | ) | 12,961.9 | 0.1 | 15,379.4 | 24.0 | |||||||||||||||||
1 year to 3 years | 6,334.4 | (401.9 | ) | 4,743.5 | (34.5 | ) | 4,722.5 | (116.1 | ) | |||||||||||||||
4 years to 5 years | 675.6 | (36.0 | ) | 85.1 | 0.3 | 54.4 | (5.0 | ) | ||||||||||||||||
more than 5 years | 6,703.3 | (14.6 | ) | — | — | 9.6 | 0.8 | |||||||||||||||||
Subtotal | 29,049.7 | (854.0 | ) | 17,790.5 | (34.1 | ) | 20,165.9 | (96.3 | ) | |||||||||||||||
Exchange-traded electricity forwards | ||||||||||||||||||||||||
up to 1 year | 4,965.9 | (244.5 | ) | 3,464.2 | (102.4 | ) | 3,316.7 | (103.6 | ) | |||||||||||||||
1 year to 3 years | 3,028.9 | (28.4 | ) | 1,725.0 | 16.1 | 1,621.4 | (18.1 | ) | ||||||||||||||||
4 years to 5 years | 94.7 | (2.1 | ) | 51.7 | (0.9 | ) | 17.6 | (1.4 | ) | |||||||||||||||
more than 5 years | — | — | — | — | 1.9 | 0.1 | ||||||||||||||||||
Subtotal | 8,089.5 | (275.0 | ) | 5,240.9 | (87.2 | ) | 4,957.6 | (123.0 | ) | |||||||||||||||
Electricity swaps | ||||||||||||||||||||||||
up to 1 year | 15.1 | 0.5 | — | — | 88.3 | (21.6 | ) | |||||||||||||||||
1 year to 3 years | — | — | — | — | — | — | ||||||||||||||||||
4 years to 5 years | — | — | — | — | — | — | ||||||||||||||||||
more than 5 years | — | — | — | — | — | — | ||||||||||||||||||
Subtotal | 15.1 | 0.5 | — | — | 88.3 | (21.6 | ) | |||||||||||||||||
Exchange-traded electricity options | ||||||||||||||||||||||||
up to 1 year | 0.2 | (0.3 | ) | 0.2 | (0.3 | ) | 12.1 | (0.7 | ) | |||||||||||||||
1 year to 3 years | 0.1 | 0.5 | 0.1 | 0.5 | 71.7 | (0.2 | ) | |||||||||||||||||
4 years to 5 years | — | — | — | — | — | — | ||||||||||||||||||
more than 5 years | — | — | — | — | — | — | ||||||||||||||||||
Subtotal | 0.3 | 0.2 | 0.3 | 0.2 | 83.8 | (0.9 | ) | |||||||||||||||||
Coal forwards and swaps | ||||||||||||||||||||||||
up to 1 year | 938.5 | 22.4 | 474.4 | 1.5 | 839.4 | (46.0 | ) | |||||||||||||||||
1 year to 3 years | 316.6 | 6.5 | 141.8 | (0.6 | ) | 439.9 | (3.0 | ) | ||||||||||||||||
4 years to 5 years | 33.8 | 0.8 | 15.6 | (0.2 | ) | 31.9 | (1.4 | ) | ||||||||||||||||
more than 5 years | 31.3 | (0.5 | ) | 31.3 | (0.5 | ) | — | — | ||||||||||||||||
Subtotal | 1,320.2 | 29.2 | 663.1 | 0.2 | 1,311.2 | (50.4 | ) | |||||||||||||||||
Exchange-traded coal forwards | ||||||||||||||||||||||||
up to 1 year | 26.7 | (1.5 | ) | — | — | — | — | |||||||||||||||||
1 year to 3 years | 32.2 | 0.4 | — | — | — | — | ||||||||||||||||||
4 years to 5 years | — | — | — | — | — | — | ||||||||||||||||||
more than 5 years | — | — | — | — | — | — | ||||||||||||||||||
Subtotal | 58.9 | (1.1 | ) | — | — | — | — | |||||||||||||||||
Oil derivatives | ||||||||||||||||||||||||
up to 1 year | 1,036.7 | (24.4 | ) | 277.2 | 0.1 | 845.0 | 106.1 | |||||||||||||||||
1 year to 3 years | 176.7 | (6.2 | ) | 53.3 | 0.2 | 341.7 | 59.1 | |||||||||||||||||
4 years to 5 years | — | — | — | — | — | — | ||||||||||||||||||
more than 5 years | — | — | — | — | — | — | ||||||||||||||||||
Subtotal | 1,213.4 | (30.6 | ) | 330.5 | 0.3 | 1,186.7 | 165.2 | |||||||||||||||||
Carryover | 39,747.1 | (1,130.8 | ) | 24,025.3 | (120.6 | ) | 27,793.5 | (127.0 | ) | |||||||||||||||
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Total Volume of Electricity, Gas, Coal, Oil and | Thereof Trading | |||||||||||||||||||||||
Emissions-Related Financial Derivatives | December 31, 2006 | December 31, 2006 | December 31, 2005 | |||||||||||||||||||||
Remaining maturities | Nominal | Fair | Nominal | Fair | Nominal | Fair | ||||||||||||||||||
€ in millions &nbsp; | value | value | value | value | value | value | ||||||||||||||||||
Carryover | 39,747.1 | (1,130.8 | ) | 24,025.3 | (120.6 | ) | 27,793.5 | (127.0 | ) | |||||||||||||||
Gas forwards | ||||||||||||||||||||||||
up to 1 year | 8,571.6 | (474.2 | ) | 2,953.8 | 23.5 | 4,628.7 | 380.8 | |||||||||||||||||
1 year to 3 years | 5,861.0 | 85.6 | 1,215.9 | 20.3 | 4,226.9 | 541.4 | ||||||||||||||||||
4 years to 5 years | 887.9 | 91.6 | 37.3 | (0.2 | ) | 763.7 | 27.4 | |||||||||||||||||
more than 5 years | 476.2 | 40.0 | — | — | 92.6 | (17.7 | ) | |||||||||||||||||
Subtotal | 15,796.7 | (257.0 | ) | 4,207.0 | 43.6 | 9,711.9 | 931.9 | |||||||||||||||||
Gas swaps | ||||||||||||||||||||||||
up to 1 year | 142.7 | (16.8 | ) | — | — | 1,987.3 | 277.4 | |||||||||||||||||
1 year to 3 years | 9.5 | (0.6 | ) | — | — | 1,645.0 | 306.8 | |||||||||||||||||
4 years to 5 years | 1.2 | — | — | — | 737.0 | 86.9 | ||||||||||||||||||
more than 5 years | — | — | — | — | 1,892.3 | 7.9 | ||||||||||||||||||
Subtotal | 153.4 | (17.4 | ) | — | — | 6,261.6 | 679.0 | |||||||||||||||||
Gas options | ||||||||||||||||||||||||
up to 1 year | 5.3 | 2.8 | — | — | 43.3 | (16.7 | ) | |||||||||||||||||
1 year to 3 years | — | — | — | — | — | — | ||||||||||||||||||
4 years to 5 years | — | — | — | — | — | — | ||||||||||||||||||
more than 5 years | — | — | — | — | — | — | ||||||||||||||||||
Subtotal | 5.3 | 2.8 | — | — | 43.3 | (16.7 | ) | |||||||||||||||||
Emissions-related derivatives | ||||||||||||||||||||||||
up to 1 year | 284.8 | 2.3 | 264.2 | 6.5 | 98.4 | 4.9 | ||||||||||||||||||
1 year to 3 years | 176.2 | 0.5 | 172.0 | 0.3 | 24.3 | 1.6 | ||||||||||||||||||
4 years to 5 years | — | — | — | — | — | — | ||||||||||||||||||
more than 5 years | — | — | — | — | — | — | ||||||||||||||||||
Subtotal | 461.0 | 2.8 | 436.2 | 6.8 | 122.7 | 6.5 | ||||||||||||||||||
Exchange-traded emissions-related derivatives | ||||||||||||||||||||||||
up to 1 year | 20.0 | 4.1 | 13.7 | 0.3 | 11.4 | 0.3 | ||||||||||||||||||
1 year to 3 years | 13.9 | (0.3 | ) | 12.6 | (0.3 | ) | 5.6 | 0.3 | ||||||||||||||||
4 years to 5 years | — | — | — | — | — | — | ||||||||||||||||||
more than 5 years | — | — | — | — | — | — | ||||||||||||||||||
Subtotal | 33.9 | 3.8 | 26.3 | — | 17.0 | 0.6 | ||||||||||||||||||
Total | 56,197.4 | (1,395.8 | ) | 28,694.8 | (70.2 | ) | 43,950.0 | 1,474.3 | ||||||||||||||||
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December 31, 2006 | ||||||||||||||||||||||||||||||||
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 | 34,301.2 | 1,910.2 | 13,508.4 | 918.1 | 14,971.5 | 608.8 | 5,821.3 | 383.3 | ||||||||||||||||||||||||
AA− and A1 or A+ and Aa3 through A− and A3 | 22,051.6 | 1,359.9 | 9,062.5 | 873.9 | 11,085.7 | 436.0 | 1,903.4 | 50.0 | ||||||||||||||||||||||||
A− and Baa1 or BBB+ and A3 through BBB− or Baa3 | 3,511.6 | 279.8 | 2,181.4 | 218.1 | 1,084.5 | 61.7 | 245.7 | — | ||||||||||||||||||||||||
BBB− and Ba1 or BB+ and Baa3 through BB− and Ba3 | 2,005.1 | 148.9 | 1,179.2 | 106.3 | 817.6 | 42.6 | 8.3 | — | ||||||||||||||||||||||||
Other (1) | 25,481.4 | 395.9 | 11,124.3 | 200.3 | 6,332.5 | 93.2 | 8,024.6 | 102.4 | ||||||||||||||||||||||||
Total | 87,350.9 | 4,094.7 | 37,055.8 | 2,316.7 | 34,291.8 | 1,242.3 | 16,003.3 | 535.7 | ||||||||||||||||||||||||
(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, 2006 | December 31, 2005 | |||||||||||||||
€ in millions | Book value | Fair value | Book value | Fair value | ||||||||||||
Assets | ||||||||||||||||
At-cost investments | 1,450 | 1,848 | 1,503 | 1,880 | ||||||||||||
Marketable investments | 11,941 | 11,941 | 8,243 | 8,243 | ||||||||||||
Securities | 11,383 | 11,383 | 10,420 | 10,420 | ||||||||||||
Financial receivables and other financial assets | 2,811 | 2,676 | 3,119 | 3,131 | ||||||||||||
Cash and deposits at banking institutions | 1,748 | 1,748 | 5,859 | 5,859 | ||||||||||||
Total | 29,333 | 29,596 | 29,144 | 29,533 | ||||||||||||
Liabilities | ||||||||||||||||
Financial liabilities | 13,399 | 13,099 | 14,362 | 15,421 | ||||||||||||
€ in millions | 2006 | 2005 | ||||||
Income | 7,467 | 5,408 | ||||||
Expenses | 3,804 | 2,913 | ||||||
Receivables | 1,892 | 2,263 | ||||||
Liabilities | 2,440 | 2,161 |
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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. It operates through the integrated energy company E.ON Sverige AB, Malmö, Sweden, primarily in Sweden. | |
• | The U.S. Midwest market unit, led by E.ON U.S. LLC, Louisville, Kentucky, U.S., is primarily active in the regulated energy market in the U.S. state of Kentucky. | |
• | The Corporate Center contains those interests managed directly by E.ON AG that have not been allocated to any of the other segments, E.ON AG itself, and consolidation effects at the Group level. |
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€ in millions | 2006 | 2005 | 2004 | |||||||||
Adjusted EBIT | 8,150 | 7,293 | 6,747 | |||||||||
Adjusted interest income (net) | (1,081 | ) | (1,027 | ) | (1,032 | ) | ||||||
Net book gains | 1,205 | 491 | 589 | |||||||||
Cost-management and restructuring expenses | — | (29 | ) | (100 | ) | |||||||
Other non-operating earnings | (3,141 | ) | 424 | 128 | ||||||||
Income/(Loss) from continuing operations before income taxes and minority interests | 5,133 | 7,152 | 6,332 | |||||||||
Income taxes | 323 | (2,261 | ) | (1,852 | ) | |||||||
Minority interests | (526 | ) | (536 | ) | (469 | ) | ||||||
Income/(Loss) from continuing operations | 4,930 | 4,355 | 4,011 | |||||||||
Income/(Loss) from discontinued operations, net | 127 | 3,059 | 328 | |||||||||
Cumulative effect of changes in accounting principles, net | — | (7 | ) | — | ||||||||
Net income | 5,057 | 7,407 | 4,339 | |||||||||
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Central Europe | Pan-European Gas | U.K. | Nordic | |||||||||||||||||||||||||||||||||||||||||||||
€ in millions | 2006 | 2005 | 2004 | 2006 | 2005 | 2004 | 2006 | 2005 | 2004 | 2006 | 2005 (1) | 2004 (1) | ||||||||||||||||||||||||||||||||||||
External sales | 27,694 | 24,047 | 20,540 | 22,594 | 16,835 | 12,671 | 12,406 | 10,102 | 8,480 | 3,118 | 3,111 | 3,028 | ||||||||||||||||||||||||||||||||||||
Intersegment sales | 686 | 248 | 212 | 2,393 | 1,079 | 556 | 163 | 74 | 10 | 86 | 102 | 66 | ||||||||||||||||||||||||||||||||||||
Total sales | 28,380 | 24,295 | 20,752 | 24,987 | 17,914 | 13,227 | 12,569 | 10,176 | 8,490 | 3,204 | 3,213 | 3,094 | ||||||||||||||||||||||||||||||||||||
Depreciation and amortization | (1,297 | ) | (1,298 | ) | (1,121 | ) | (491 | ) | (387 | ) | (334 | ) | (561 | ) | (586 | ) | (575 | ) | (373 | ) | (341 | ) | (383 | ) | ||||||||||||||||||||||||
Impairments (3) | (19 | ) | (56 | ) | (185 | ) | (242 | ) | (16 | ) | (94 | ) | — | (1 | ) | — | — | (8 | ) | — | ||||||||||||||||||||||||||||
Adjusted EBIT | 4,168 | 3,930 | 3,602 | 2,106 | 1,536 | 1,344 | 1,229 | 963 | 1,017 | 619 | 766 | 661 | ||||||||||||||||||||||||||||||||||||
Thereof: earnings from companies accounted for at equity (4) | 335 | 189 | 143 | 557 | 509 | 419 | 6 | 17 | 43 | 1 | 9 | 10 | ||||||||||||||||||||||||||||||||||||
Intangible assets and property, plant and equipment | 1,883 | 1,519 | 1,388 | 374 | 263 | 105 | 860 | 565 | 511 | 581 | 373 | 312 | ||||||||||||||||||||||||||||||||||||
Share investments | 533 | 462 | 885 | 506 | 260 | 505 | 3 | 361 | (8 | ) | 50 | 21 | 354 | |||||||||||||||||||||||||||||||||||
Investments (5) | 2,416 | 1,981 | 2,273 | 880 | 523 | 610 | 863 | 926 | 503 | 631 | 394 | 666 | ||||||||||||||||||||||||||||||||||||
Total assets | 60,202 | 60,531 | 55,537 | 36,538 | 30,746 | 22,720 | 19,571 | 19,177 | 14,986 | 12,386 | 11,193 | 11,289 | ||||||||||||||||||||||||||||||||||||
�� |
U.S. Midwest | Corporate Center | Core Energy Business | Other Activities (2) | |||||||||||||||||||||||||||||||||||||||||||||
€ in millions | 2006 | 2005 | 2004 | 2006 | 2005 | 2004 | 2006 | 2005 (1) | 2004 (1) | 2006 | 2005 | 2004 | ||||||||||||||||||||||||||||||||||||
External sales | 1,947 | 2,045 | 1,718 | — | 1 | 52 | 67,759 | 56,141 | 46,489 | — | — | — | ||||||||||||||||||||||||||||||||||||
Intersegment sales | — | — | — | (3,328 | ) | (1,503 | ) | (844 | ) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Total sales | 1,947 | 2,045 | 1,718 | (3,328 | ) | (1,502 | ) | (792 | ) | 67,759 | 56,141 | 46,489 | — | — | — | |||||||||||||||||||||||||||||||||
Depreciation and amortization | (193 | ) | (195 | ) | (185 | ) | (15 | ) | (13 | ) | (22 | ) | (2,930 | ) | (2,820 | ) | (2,620 | ) | — | — | — | |||||||||||||||||||||||||||
Impairments (3) | (6 | ) | — | — | (6 | ) | — | (18 | ) | (273 | ) | (81 | ) | — | — | — | — | |||||||||||||||||||||||||||||||
Adjusted EBIT | 391 | 365 | 354 | (416 | ) | (399 | ) | (338 | ) | 8,097 | 7,161 | 6,640 | 53 | 132 | 107 | |||||||||||||||||||||||||||||||||
Thereof: earnings from companies accounted for at equity (4) | 21 | 17 | 17 | (16 | ) | 9 | (42 | ) | 904 | 750 | 590 | 53 | 132 | 107 | ||||||||||||||||||||||||||||||||||
Intangible assets and property, plant and equipment | 398 | 227 | 247 | (13 | ) | 9 | 11 | 4,083 | 2,956 | 2,574 | — | — | — | |||||||||||||||||||||||||||||||||||
Share investments | — | — | — | (14 | ) | (119 | ) | 467 | 1,078 | 985 | 2,203 | — | — | — | ||||||||||||||||||||||||||||||||||
Investments (5) | 398 | 227 | 247 | (27 | ) | (110 | ) | 478 | 5,161 | 3,941 | 4,777 | — | — | — | ||||||||||||||||||||||||||||||||||
Total assets | 8,591 | 9,296 | 7,643 | (10,056 | ) | (4,381 | ) | (5,794 | ) | 127,232 | 126,562 | 106,381 | — | — | 7,681 | |||||||||||||||||||||||||||||||||
E.ON Group | ||||||||||||
€ in millions | 2006 | 2005 (1) | 2004 (1) | |||||||||
External sales | 67,759 | 56,141 | 46,489 | |||||||||
Intersegment sales | — | — | — | |||||||||
Total sales | 67,759 | 56,141 | 46,489 | |||||||||
Depreciation and amortization | (2,930 | ) | (2,820 | ) | (2,620 | ) | ||||||
Impairments (3) | (273 | ) | (81 | ) | — | |||||||
Adjusted EBIT | 8,150 | 7,293 | 6,747 | |||||||||
Thereof: earnings from companies accounted for at equity (4) | 957 | 882 | 697 | |||||||||
Intangible assets and property, plant and equipment | 4,083 | 2,956 | 2,574 | |||||||||
Share investments | 1,078 | 985 | 2,203 | |||||||||
Investments (5) | 5,161 | 3,941 | 4,777 | |||||||||
Total assets | 127,232 | 126,562 | 114,062 | |||||||||
(1) | Adjusted for discontinued operations, except for total assets. |
(2) | Included among the other activities was the 42.9 percent interest in Degussa accounted for at equity until its disposal in July 2006. |
(3) | In 2006 and 2005, the impairment charges recognized in adjusted EBIT differed from the impairment charges recorded in accordance with U.S. GAAP. In 2006, non-operating earnings can be traced to regulatory impairments on property, plant and equipment and on shareholdings at the Central Europe and Pan-European Gas market units. In addition, impairments have again been recorded in the area of generation, specifically |
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cogeneration facilities at the U.K. market unit. Additional impairments concern intangible assets and property, plant and equipment at the Pan-European Gas, U.K. and Nordic market units. In 2005, the difference was the result of impairments recorded in the area of generation, specifically cogeneration facilities at the U.K. market unit. |
(4) | In 2006 and 2005, the earnings contributing to adjusted EBIT from companies accounted for under the equity method differed from the at-equity results recorded in accordance with U.S. GAAP. In 2006, this was the result of impairment charges included in non-operating earnings. The impairments related to property, plant and equipment and to shareholdings at the Central Europe and Pan-European Gas market units. In 2005, the impairments related to the Fine Chemicals division of Degussa and to deferred tax assets of an at-equity company in the Corporate Center. |
(5) | Excluding other financial assets |
€ in millions | 2006 | 2005 | 2004 | |||||||||
Interest and similar expenses (net) as shown in Note 6 | (687 | ) | (736 | ) | (1,063 | ) | ||||||
(+) Non-operating interest income (net) (1) | (5 | ) | (39 | ) | 151 | |||||||
(−) Interest portion of long-term provisions | 389 | 252 | 120 | |||||||||
Adjusted interest income (net) | (1,081 | ) | (1,027 | ) | (1,032 | ) | ||||||
(1) | This figure is calculated by adding interest expenses and subtracting interest income. In 2005, non-operating interest income primarily related to an eliminated provision for interest that had been recognized in previous years. |
Europe (Eurozone | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Germany | excluding Germany) | Europe (other) | United States | Other | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
€ in millions | 2006 | 2005 | 2004 | 2006 | 2005 | 2004 | 2006 | 2005 | 2004 | 2006 | 2005 | 2004 | 2006 | 2005 | 2004 | 2006 | 2005 | 2004 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
External sales | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
by location of customer | 38,043 | 33,557 | 28,621 | 3,796 | 2,772 | 1,926 | 23,389 | 17,743 | 14,110 | 1,901 | 1,990 | 1,770 | 630 | 79 | 62 | 67,759 | 56,141 | 46,489 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
by location of company | 42,129 | 36,635 | 30,028 | 2,053 | 1,218 | 1,209 | 21,630 | 16,243 | 13,482 | 1,897 | 1,980 | 1,711 | 50 | 65 | 59 | 67,759 | 56,141 | 46,489 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, plant and equipment | 18,674 | 19,010 | 23,171 | 1,104 | 1,339 | 1,283 | 18,965 | 16,819 | 15,327 | 3,896 | 4,072 | 3,693 | 73 | 83 | 89 | 42,712 | 41,323 | 43,563 |
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By: | /s/ Dr. Marcus Schenck |
Chief Financial Officer