2011 Annual Report - OTCIQ.com

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118 Notes (23) Non-Controlling Interests Non-controlling interests by segment as of the dates indicated are shown in the table below. Non-Controlling Interests December 31 € in millions 2011 2010 Generation 303 384 Renewables 7 23 Gas 47 48 Trading – – Germany 2,221 2,223 Other EU Countries 535 517 Russia 764 738 Group Management/Consolidation -1 -1 Total 3,876 3,932 (24) Provisions for Pensions and Similar Obligations The retirement benefit obligations toward the employees of the E.ON Group, which amounted to €14.6 billion, were covered by plan assets having a fair value of €11.4 billion as of December 31, 2011. This corresponds to a funded status of 78 percent. The decrease in non-controlling interests in 2011 resulted primarily from sales at the Generation unit in the United Kingdom, which were partially offset by improved results in Russia. The table below illustrates the share of OCI that is attributable to non-controlling interests. Share of OCI Attributable to Non-Controlling Interests December 31 € in millions 2011 2010 Cash flow hedges 2 3 Available-for-sale securities 9 11 Currency translation adjustments Changes in actuarial gains/losses of defined benefit pension plans and -247 -229 similar obligations -11 13 Total -247 -202 In addition to the reported plan assets, Versorgungskasse Energie (“VKE”) administers another pension fund holding assets of €0.6 billion (2010: €0.6 billion) that do not constitute plan assets under IAS 19 but which nevertheless are for the most part intended for the coverage of employee retirement benefits at E.ON Group companies in Germany (see Note 31). In recent years, the funded status, measured as the difference between the defined benefit obligation and the fair value of plan assets, has changed as follows: Five-Year History of the Funded Status € in millions 2011 2010 December 31 2009 2008 2007 Defined benefit obligation 14,607 16,514 16,087 14,096 15,936 Fair value of plan assets -11,359 -13,263 -13,205 -11,034 -13,056 Funded status 3,248 3,251 2,882 3,062 2,880
Description of the Benefit Obligations In addition to their entitlements under government retirement systems and the income from private retirement planning, most E.ON Group employees are also covered by occupational retirement plans. Both defined benefit plans and defined contribution plans are in place at E.ON. The majority of the benefit obligations reported consists of obligations of E.ON Group companies in which the retirement pension is calculated either on the salaries earned during the most recent years of service (final-pay arrangements) or on a scale of fixed amounts. In order to avoid exposure to future risks from occupational retirement plans, newly designed pension plans were introduced at the major German and foreign E.ON Group companies beginning in 1998. Virtually all new hires at E.ON Group companies, particularly in Germany, the United Kingdom and Spain, are now covered by benefit plans whose future risks can be Foreign benefit obligations relate almost entirely to the benefit plans at E.ON Group companies in the United Kingdom (2011: €4,547 million; 2010: €6,867 million) and in Spain (2011: €415 million; 2010: €407 million). The portion of the entire benefit obligation allocated to post-employment health care benefits amounted to €15 million (2010: €15 million). The reduction in foreign benefit obligations is due primarily to the disposal in 2011 of Central Networks; the disposal is shown in the table under “Changes in scope of consolidation.” CEO Letter E.ON Stock Combined Group Management Report Consolidated Financial Statements Corporate Governance Report Supervisory Board and Board of Management Tables and Explanations calculated and controlled. In addition, the final-pay arrangements for existing employees at the Group’s German companies were largely converted into a newly designed benefit plan beginning in 2004. The provisions for pensions and similar obligations also include minor provisions for obligations from the assumption of costs for post-employment health care benefits, which are granted primarily at E.ON Group companies in Spain. In pure defined contribution plans, the Company discharges its obligations toward employees when it pays agreed contribution amounts into funds managed by external insurers or similar institutions. Changes in the Benefit Obligations The following table shows the changes in the present value of the defined benefit obligation for the periods indicated: Changes in the Defined Benefit Obligation 2011 2010 € in millions Total Domestic Foreign Total Domestic Foreign Defined benefit obligation as of January 1 16,514 9,058 7,456 16,087 8,285 7,802 Employer service cost 239 157 82 241 147 94 Interest cost 724 440 284 840 446 394 Changes in scope of consolidation -2,647 -18 -2,629 -913 1 -914 Past service cost 19 16 3 32 16 16 Actuarial gains (-)/losses 442 291 151 800 567 233 Exchange rate differences 66 – 66 205 – 205 Employee contributions 2 – 2 4 – 4 Pensions paid -749 -489 -260 -838 -474 -364 Settlements -1 – -1 – – – Other -2 – -2 56 70 -14 Defined benefit obligation as of December 31 14,607 9,455 5,152 16,514 9,058 7,456 Actuarial losses in 2011 are attributable in large part to the decrease in the discount rates used for the E.ON Group companies in Germany and in the United Kingdom. They were partly offset by a reduction in the salary increase rate affecting the German E.ON Group companies and by lower salary and pension increase rates determined for the E.ON Group companies in the United Kingdom. 119
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2011 Annual Report
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Contents 2 CEO Letter 4 E.ON Stock
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Europe’s energy markets are conso
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Dividend At the 2012 Annual Shareho
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Global Units We manage all our oper
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How will we achieve all this? The f
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Top performance requires efficient
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The Energy Roadmap 2050 adopts a sc
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Macroeconomic Environment In 2011,
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Energy Prices Four main factors dro
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Attributable Generating Capacity Th
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The Russia unit generated about 94
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Gas Sales On a consolidated basis,
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Sales Our sales rose by 22 percent
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Sales at the UK regional unit decli
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E.ON generates a significant portio
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Distribution Networks’ EBITDA dec
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and coal-fired power stations. Of t
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Analyzing Value Creation by Means o
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Cash Flow and Financial Position E.
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In addition to our DIP, we have a
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E.ON AG’s Earnings, Financial, an
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Employees HR Strategy The knowledge
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Workforce Figures At year-end 2011,
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Technology and Innovation In 2011,
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The ERC was founded in 2006. Its mi
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Risk Management and Insurance E.ON
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Strategic Risks Our business strate
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E.ON is building a hard-coal-fired
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waste.” The draft legislation men
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In 2012, Sweden will introduce a ne
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Due to lower commodity prices and u
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We anticipate Renewables’ earning
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Opportunities We conduct a bottom-u
Page 69 and 70: Audit Opinion According to § 322 A
Page 71 and 72: CEO Letter E.ON Stock Combined Grou
Page 75 and 76: Additional information on the State
Page 79 and 80: Business Combinations Business comb
Page 81 and 82: Newly created goodwill is allocated
Page 83 and 84: Subsequent costs arising, for examp
Page 85 and 86: Instruments commonly used are forei
Page 87 and 88: future exercise price. This amount
Page 89 and 90: Contingent liabilities are possible
Page 91 and 92: (2) New Standards and Interpretatio
Page 93 and 94: and joint operations. The provision
Page 95 and 96: The amended standard also contains
Page 97 and 98: Russian Federation. The proceeds fr
Page 99 and 100: The gains on the disposal of invest
Page 101 and 102: The decrease in tax expense by €3
Page 103 and 104: Of the deferred taxes reported, a t
Page 105 and 106: Stock Appreciation Rights of E.ON A
Page 107 and 108: The fees for financial statement au
Page 113 and 114: Of this total, an amount of €160
Page 115 and 116: (15) Companies Accounted for under
Page 117 and 118: The individual impaired receivables
Page 119: (20) Additional Paid-in Capital As
Page 123 and 124: Description of Plan Assets Defined
Page 125 and 126: Taking into account periodic additi
Page 127 and 128: (25) Miscellaneous Provisions The f
Page 129 and 130: Advance payments made to other wast
Page 131 and 132: At year-end 2011, the following EIF
Page 133 and 134: Construction grants of €2,857 mil
Page 135 and 136: In Sweden, owners of nuclear facili
Page 137 and 138: Competition in the gas market and i
Page 139 and 140: Pursuant to the information availab
Page 143 and 144: The fair value of shareholdings in
Page 145 and 146: The following two tables illustrate
Page 147 and 148: Risk Management Principles The pres
Page 149 and 150: A sensitivity analysis was performe
Page 151 and 152: Virtually all of the investments in
Page 153 and 154: Under IAS 24, compensation paid to
Page 155 and 156: Net book gains in 2011 decreased by
Page 159 and 160: (34) Compensation of Supervisory Bo
Page 161 and 162: Notes (36) List of Shareholdings Pu
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CEO Letter E.ON Stock Combined Grou
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In addition to the Company’s peri
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The Supervisory Board has establish
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and the Consolidated Financial Stat
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Compensation of the Members of the
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The Supervisory Board, at its discr
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the E.ON Group’s ROCE and prior-y
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Compensation of the Members of the
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The remaining other compensation of
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In addition, the Board of Managemen
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We examined the Board of Management
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Klaus Dieter Raschke Chairman of th
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At the Board of Management’s disc
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Further information about financial
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Assessment After companies have doc
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Glossary of Financial Terms Actuari
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Prepayments and accrued income Line
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Financial Calendar May 3, 2012 2012
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2011 Annual Report - OTCIQ.com

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