2011 Annual Report - OTCIQ.com

Prepayments and accrued income
Line item used to account for aperiodic expenses and income.
Prepayments, which are recorded on the liability side of the
balance sheet, occur when payment is made before the balance-sheet
date, but the expense is after the balance-sheet
date. Accrued income, which is recorded on the liabilities
side of the balance sheet, occurs when payment is received
before the balance-sheet date, but the income is recorded
after the balance-sheet date.
Purchase price allocation
In a business combination accounted for as a purchase, the
values at which the acquired company’s assets and liabilities
are recorded in the acquiring company’s balance sheet.
Rating
Standardized performance categories for an issuer’s short-
and long-term debt instruments based on the probability of
interest payment and full repayment. Ratings provide investors
and creditors with the transparency they need to compare
the default risk of various financial investments.
Return on equity
The return earned on an equity investment (in this case,
E.ON stock), calculated after corporate taxes but before an
investor’s individual income taxes.
ROACE
Acronym for return on average capital employed. A key indicator
for monitoring the performance of E.ON’s business, ROACE
is the ratio between E.ON’s EBIT and average capital employed.
Average capital employed represents the interest-bearing
average capital tied up in the E.ON Group.
ROCE
Acronym for return on capital employed. ROCE is the ratio
between E.ON’s EBIT and capital employed. Capital employed
represents the interest-bearing capital tied up in the E.ON
Group.
Stock appreciation rights (“SAR”)
Virtual stock options in which compensation is in cash instead
of in stock. At E.ON, the exercise gain equals the difference
between the price of E.ON stock on the exercise date and at
the time the SAR were issued.
CEO Letter
E.ON Stock
Combined Group Management Report
Consolidated Financial Statements
Corporate Governance Report
Supervisory Board and Board of Management
Tables and Explanations
Syndicated line of credit
Credit facility extended by two or more banks that is good
for a stated period of time.
Tax shield
Deductions that reduce an enterprise’s tax burden. For example,
the interest on corporate debt is tax deductible. An enterprise
takes this into consideration when choosing between equity
and debt financing (see Cost of capital).
Underlying net income
An earnings figure after interest income, income taxes, and
minority interests that has been adjusted to exclude certain
extraordinary effects. The adjustments include effects from the
marking to market of derivatives, book gains and book losses
on disposals, restructuring expenses, and other non-operating
income and expenses of a non-recurring or rare nature (after
taxes and minority interests). Underlying net income also
excludes income/loss from discontinued operations, net.
Value added
Key measure of E.ON’s financial performance based on residual
wealth calculated by deducting the cost of capital (debt and
equity) from operating profit. It is equivalent to the return
spread (ROCE minus the cost of capital) multiplied by capital
employed, which represents the interest-bearing capital tied
up in the E.ON Group.
Value at risk (“VaR”)
Risk measure that indicates the potential loss that a portfolio
of investments will not exceed with a certain degree of probability
(for example, 99 percent) over a certain period of time
(for example, one day). Due to the correlation of individual
transactions, the risk faced by a portfolio is lower than the sum
of the risks of the individual investments it contains.
Working capital
The difference between a company’s current assets and
current liabilities.
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