2011 Annual Report - OTCIQ.com

Competition in the gas market and increasing trading volumes
at virtual trading points and on gas exchanges could result
in considerable risks for gas quantities purchased under longterm
take-or-pay contracts. In addition, substantial price risks
result from the fact that gas procurement prices are predominantly
linked to the price of oil, whereas sales prices are
guided by wholesale prices. In general, contracts between producers
and importers are subject to periodic adjustments in
line with current market conditions. E. ON Ruhrgas conducts
intensive negotiations with producers. The negotiations with
Gazprom have been unsuccessful thus far, and E.ON Ruhrgas
has availed of its right under the existing contracts to initiate
arbitration proceedings against Gazprom.
(29) Supplemental Disclosures of Cash Flow
Information
Supplemental Disclosures of
Cash Flow Information
€ in millions
Non-cash investing and financing activities
2011 2010
Exchanges in corporate transactions
Funding of external fund assets for
pension obligations through transfer of
35 172
fixed-term deposits and securities 164 –
The total consideration received by E.ON in 2011 for the disposal
of consolidated equity interests and activities generated
cash inflows of €4,597 million (2010: €6,225 million). Cash
and cash equivalents divested in connection with the disposals
amounted to €25 million (2010: €461 million). The sale
of these activities led to reductions of €6,139 million (2010:
€9,397 million) in assets and €2,279 million (2010: €3,401 million)
in provisions and liabilities.
The purchase prices paid for subsidiaries totaled €16 million.
The acquisitions included cash in the amount of €4 million.
Aside from the cash there were no significant acquisitions of
assets, provisions or liabilities. No significant cash acquisitions
of consolidated equity investments and activities took place
in 2010.
Cash provided by operating activities of the E.ON Group was
38 percent lower in 2011 than in 2010. The decrease is primarily
due to cash effects associated with the reduction in EBITDA,
a negative non-recurring effect due to the supplemental funding
of pension plan assets, especially in the United Kingdom,
CEO Letter
E.ON Stock
Combined Group Management Report
Consolidated Financial Statements
Corporate Governance Report
Supervisory Board and Board of Management
Tables and Explanations
In September 2011, the European Commission conducted additional
inspections at several gas utilities in Central and Eastern
Europe, some of which are E. ON Group companies. The Commission
is investigating potential anticompetitive practices by
Gazprom, possibly acting in concert with other companies. The
Commission makes note that such inspections do not indicate
the existence of definitive proof of anticompetitive behavior.
Because litigation and claims are subject to numerous uncertainties,
their outcome cannot be ascertained; however, in the opinion
of management, any potential obligations arising from these
matters will not have a material adverse effect on the financial
condition, results of operations or cash flows of the Company.
higher interest payments and negative effects in working capital.
Working capital was diminished in particular by reduced
subsidies for new wind farms in the United States as a consequence
of fewer commissions, by portfolio effects and by
changes in working capital at the Trading and Gas global
units and in the regional businesses. The effects were partly
offset by lower tax payments.
Spending on intangible assets, on property, plant and equipment
and on equity investments was approximately 21 percent
lower than in the previous year. The amount of cash received
from the disposal of equity investments was about 39 percent
below the extremely high proceeds obtained in 2010. Cash
provided by investing activities in 2011 came primarily from the
disposal of Central Networks in the United Kingdom and from
the sale of the Gazprom shares. The commitments of funds for
securities, financial receivables and fixed-term deposits were
also substantially higher than in 2010. Aside from the dividend
payments, the cash flows from financing activities primarily
reflect the net repayment of borrowings.
Exploration activity resulted in operating cash flow of
-€5 million (2010: -€70 million) and in cash flow from investing
activities of -€50 million (2010: -€114 million).
135