2011 Annual Report - OTCIQ.com

Sales at the UK regional unit declined by €178 million. The
decline in sales resulting from the disposal of the regulated
business (Central Networks) was partially offset by higher
sales in the retail business.
The Sweden regional unit’s sales decreased by €313 million,
despite positive currency-translation effects of €155 million.
The decline was mainly due to lower retail sales which reflect
a decline in spot prices from the high level seen in the first
half of 2010.
Sales in Czechia rose by €427 million, primarily because of
higher compensation payments for the preferential dispatch
of renewable-source electricity in the distribution network.
Sales at the Hungary regional unit were slightly below the
prior-year level because of lower sales in the regulated business
and lower sales prices.
Sales at the remaining reporting units rose by €526 million, in
particular because of positive margin and price effects in
France, the Netherlands, Spain, and Romania. The acquisition
of new customers in the Netherlands was another positive
factor. Sales in Italy declined on lower sales volume.
Russia
An increase in generating capacity along with higher power
prices enabled Russia to grow its sales by 29 percent, from
€1,252 million in 2010 to €1,615 million in 2011. In local currency,
sales were up by 31 percent, from RUB 50,344 million to
RUB 66,039 million.
Other Significant Line Items from the Consolidated
Statements of Income
Own work capitalized of €519 million was 12 percent below
the prior-year level (€588 million) and consisted chiefly of
engineering services performed in our network business in
conjunction with new-build projects.
CEO Letter
E.ON Stock
Combined Group Management Report
Consolidated Financial Statements
Corporate Governance Report
Supervisory Board and Board of Management
Tables and Explanations
Other operating income declined by 14 percent to €13,785 million
(prior year: €15,961 million). Higher income from exchangerate
differences of €6,027 million (€5,177 million) was more
than offset by significantly lower income from derivative financial
instruments of €4,559 million (€6,046 million). In derivative
financial instruments, there were significant effects from
commodity derivatives in 2011. These principally affected our
positions in natural gas, oil, and emission allowances. Gains
on the disposal of securities, fixed assets, and shareholdings
amounted to €1,548 million (€3,478 million). In 2011, these gains
are primarily attributable to the sale of additional Gazprom
stock and our U.K. power distribution network. In the prior year,
they were attributable to the disposal of power capacity and
our ultrahigh-voltage transmission system (transpower) in line
with our commitment to the European Commission and to
the sale of Gazprom stock. Miscellaneous other operating
income consisted primarily of reductions to valuation allowances
and provisions as well as compensation payments
received for damages.
Costs of materials rose by €24,252 million to €97,827 million
(€73,575 million), primarily due to an increase in trading
volume compared with the prior year, higher costs stemming
from the amendment of Germany’s Nuclear Energy Act which
calls for the early, unplanned shutdown of nuclear power plants
(“NPPs”) in Germany (around €1.5 billion), and higher procurement
costs.
Personnel costs rose by €666 million to €5,947 million
(€5,281 million), chiefly because of restructuring expenditures
in conjunction with the E.ON 2.0 project.
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