2011 Annual Report - OTCIQ.com

Cash Flow and Financial Position
E.ON presents its financial condition using, among other
financial measures, cash provided by operating activities of
continuing operations and economic net debt.
At €6.6 billion, our cash provided by operating activities of
continuing operations was considerably below the prior-year
figure of €10.6 billion. The main reasons for the decline were
cash-effective items in conjunction with the decrease in EBITDA,
a non-recurring adverse effect relating to the refunding of
pension assets in the United Kingdom, and negative workingcapital
effects. The main negative factors for the latter item
were lower subsidy payments for new wind farms in the United
States, portfolio effects, higher interest payments, and changes
in working capital at Trading and Gas and at certain regional
units. Lower tax payments had a positive effect.
Cash provided by investing activities of continuing operations
amounted to about -€3.1 billion in 2011 (prior year: €1.1 billion).
Investment expenditures on property, plant, and equipment
were lower, as were the proceeds from the sale of equity interests.
In addition, significantly more cash was invested in securities
and fixed-term deposits than in the prior year.
Cash provided by financing activities of continuing operations
of -€5.8 billion (prior year: -€9.9 billion) primarily reflects
the net repayment of financial liabilities and E.ON’s again high
dividend payment.
Compared with the figure recorded at December 31, 2010
(-€37,701 million), our economic net debt improved by €1,316 million
to -€36,385 million. The main reasons for the improvement
were the sale of Central Networks and the sale of the
second tranche of Gazprom stock. Along with these disposal
proceeds, our cash provided by operating activities exceeded
our investments in property, plant, and equipment. E.ON AG’s
dividend payout had an adverse effect on our economic net
debt. The increase in provisions for nuclear waste management
was due in part to the amendment of Germany’s Nuclear
Energy Act.
CEO Letter
E.ON Stock
Combined Group Management Report
Consolidated Financial Statements
Corporate Governance Report
Supervisory Board and Board of Management
Tables and Explanations
The calculation of economic net debt includes the fair value
(net) of currency derivatives used for financing transactions
(but excluding transactions relating to our operating business
and asset management) in order to also reflect the foreigncurrency
effects of financial transactions which, for accounting
reasons, would not be included in the components of net
financial position.
Economic Net Debt
€ in millions
December 31
2011 2010
Liquid funds 7,020 8,273
Non-current securities
Total liquid funds and non-current
4,904 3,903
securities 11,924 12,176
Financial liabilities to banks and third
parties
Financial liabilities resulting from
interests in associated companies and
-28,490 -31,799
other shareholdings -1,424 -692
Total financial liabilities -29,914 -32,491
Net financial position -17,990 -20,315
Fair value (net) of currency derivatives
used for financing transactions1 524 334
Provisions for pensions -3,245 -3,250
Asset-retirement obligations
Less prepayments to Swedish nuclear
-17,269 -15,968
fund 1,595 1,498
Economic net debt -36,385 -37,701
EBITDA2 9,293 13,346
Debt factor 3.9 2.8
1 Does not include transactions relating to our operating business or asset
management.
2 Adjusted for extraordinary effects.
Our debt factor was 3.9 at year-end 2011 (prior year: 2.8).
However, this was predominantly attributable to largely noncash-effective,
non-recurring items resulting from Germany’s
accelerated phaseout of nuclear energy. Adjusted for these
effects, our debt factor was 3.4.
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