2011 Annual Report - OTCIQ.com

94 Notes
(4) Acquisitions, Disposals and Discontinued
Operations
Disposal Groups and Assets Held for Sale in 2011
E.ON Bulgaria
In line with the strategy to divest €15 billion in assets by
the end of 2013, E.ON signed an agreement with the Czech
company ENERGO-PRO on the disposal of its wholly-owned
subsidiary E.ON Bulgaria in December 2011. The purchase price
of approximately €0.1 billion is subject to final purchase price
adjustments. The major asset items on the balance sheet were
property, plant and equipment (€0.2 billion) and current assets
(€0.1 billion). Provisions and liabilities amounted to €0.1 billion
in total. The agreement on the purchase price necessitated the
recognition in December of impairment charges on goodwill
and non-current assets totaling €0.1 billion. The transaction is
expected to close in the first half of 2012. The Bulgarian activities
are part of the “Other regional units” segment. These activities
are presented as a disposal group on grounds of materiality.
Central Networks
In line with the aforementioned divestment strategy, E.ON sold
its U.K. power distribution network operator to PPL Corporation
(“PPL”), Allentown, Pennsylvania, U.S., effective April 1, 2011.
The purchase price for the equity and for the assumption of
certain liabilities is approximately £4.1 billion (equivalent to
€4.6 billion as of April 1, 2011). In addition, provisions for pensions
of about £0.1 billion were also transferred. As negotiations
had already reached an advanced stage by March 1, 2011,
the activities had been presented as a disposal group as of
that date. Held in the United Kingdom regional unit, Central
Networks had net assets before consolidation effects of approximately
£2.0 billion (equivalent to €2.3 billion) as of April 1, 2011.
Its major balance sheet line items were non-current assets
(€5.0 billion), operating receivables (€0.4 billion), intragroup liabilities
(€1.2 billion) and financial liabilities to non-Group third
parties (€0.6 billion), as well as pension and other provisions
(€0.7 billion) and liabilities (€0.6 billion). The disposal gain
before foreign exchange translation differences amounts to
about £0.5 billion. OCI as of April 1, 2011, consisted primarily of
foreign exchange translation differences totaling -€0.2 billion;
the resulting gain on disposal thus amounted to €0.4 billion.
E.ON Rete
In mid-December 2010, the contractual agreements to sell all
of the shares of E.ON Rete S.r.l., Milan, Italy, the company operating
the Italian gas distribution network for the former Italy
market unit, to a consortium consisting of Italian investment
fund F2i SGR S.p.A. and AXA Private Equity at a sales price of
approximately €0.3 billion, were finalized. These activities have
been presented as a disposal group since December 31, 2010.
The major balance sheet line items were €0.1 billion and
€0.2 billion, respectively, in intangible assets and property, plant
and equipment, as well as €0.2 billion in liabilities. The transaction
closed at the beginning of April 2011 with a minor book
gain on the disposal.
Stadtwerke Duisburg/Stadtwerke Karlsruhe
Following the disposal of the Thüga group, the shareholdings
in Stadtwerke Karls ruhe GmbH (10 percent), Karlsruhe, Germany,
and in Stadtwerke Duisburg Aktiengesellschaft (20 percent),
Duisburg, Germany, both accounted for in the Gas global unit,
were classified as assets held for sale as of December 31, 2010.
The sales closed at the beginning of 2011 and in July 2011,
respectively.
HSE
Following the disposal of the Thüga group, a concrete stage
in negotiations on the disposal of the 40-percent shareholding
in HEAG Südhessische Energie AG, Darmstadt, Germany,
accounted for in the Gas global unit, was reached in the third
quarter of 2010. Accordingly, the ownership interest was
reclassified as an asset held for sale at the end of August 2010.
The carrying amount of the ownership interest is approximately
€0.3 billion. The contract for the sale was signed in February
2012. The transaction still requires the approval of various municipal
committees of the city of Darmstadt and is expected to
close in the first half of 2012.
BKW
Also in the context of portfolio streamlining, E.ON decided to dispose
of its approximately 21-percent shareholding in BKW FMB
Energie AG (“BKW”), Bern, Switzerland. The first stage of the
transaction was completed in July 2010, when BKW itself and
Groupe E SA, Fribourg, Switzerland, acquired a stake of approximately
14 percent. The remaining approximately 7 percent
of the shares have been reported as a financial asset since the
fourth quarter of 2011. The carrying amount is €0.1 billion.
Interest in OAO Gazprom
The portfolio streamlining efforts also included the disposal
in the fourth quarter of 2010 of most of E.ON’s interest in
OAO Gazprom (“Gazprom”), Moscow, Russian Federation, sold
to Russia’s state-owned Vnesheconombank (“VEB”), Moscow,